Understand how holiday car hire and collision excess insurance works
Unfortunately, your own car insurance is unlikely to cover you for a rental car on your next holiday break.
If you are planning to hire a nippy convertible for two or a practical family MPV when you jet off on your next holiday, how about having the peace of mind that you are covered for potential damages AND don't end up potentially paying more for your car hire excess insurance than the rental itself. That could happen if you don't do a little homework on how car hire excess insurance works.
Which is why we have written this summary guide for you.
In this article:
- Does your own car insurance cover rental cars
- Car hire insurance explained
- Should you buy hire car insurance from your rental company
- Getting your car hire insurance when you land in Europe
- Where can you compare the best car hire excess insurance options
Does your own car insurance cover rental cars
Generally, no. Your own car insurance will only cover the car listed in your policy. An by the way, it's always a good idea to get in touch with your car insurer before you head off on holiday, being across to Europe or elsewhere, to check a few key points that could become real sore points later on. Rental cars come with their own insurance. However, the amount of excess can be really high (often as much or more than the cost of hiring the car itself).
CAR INSURANCE: How to claim for an accident in Europe?
Car hire insurance explained
What's included in your car hire insurance?
- Car rental companies operating in Europe include motor insurance cover for third party liability in the rental price.
- Under the terms of the rental agreement you are potentially liable for loss of, or damage to, the rental vehicle until you return it.
- To protect against this potential cost, basic cover (known as collision and loss damage waivers) is normally included in the rental price to reduce the amount for which the consumer is responsible (in the event of damage to, or theft of the vehicle).
- You will still be liable to pay the ‘excess’ - or first part of the cost, which can be for a significant amount (for example up to £1,000).
- Car rental firms generally offer consumers optional protection products at an additional cost, to further reduce your liability.These include excess reduction waivers, which reduce the consumer’s residual liability (the excess) in the event of damage or theft.
- As an alternative to the excess reduction waivers sold by car rental companies, you can purchase excess reimbursement insurance (ERI) products from specialist third-party companies.
- How is it different? For a start it could be much cheaper. But under this arrangement, beware that you must pay the excess to the rental company (in the event of damage or loss) and then lodge a claim with the insurer (who will refund you the money if the claim is upheld).
JARGON BUSTER: A waiver is a contractual term by which the rental company waives its rights to claim compensation from the consumer for loss of, or damage to, the rented vehicle while it is in the consumer’s possession.
What's not included in your rental car insurance
Car hire insurance generally includes Collision Damage Waiver and third Party Liability insurance. It will not include the excess you have to pay in case of damage. It might not include incidents like the loss of the car keys or any damage to the tyres
Standard hire car insurance can actually be pretty poor in terms of what it actually covers you for. It's always best to read the terms and conditions of your contract before you complete the hire purchase - and ideally before you travel so you have time to research and compare other car hire excess insurance options.
How car hire excess insurance suppliers stack up against each other
We have checked 14 car hire excess insurance specialists and 5 of the biggest car rental companies in the UK to see how they fare on pricing *:
(*(All prices show - where applicable - Europe single trip (Europe annual cover) / WorldWide single trip (WorldWide annual) / USA+Canada single trip (USA+Canada annual). Prices are based on car drivers aged between 21-75 ; a hire car 9 or less seats, no older than 10 year old, for 2 weeks hire from 15/07/2018 to 31/07/2018 or 16/07/2018 to 1st/08/2018. Car rental for a mid size car with pick up and drop off in either Brighton or Bristol and car remaining in the UK. All information is correct to the best of our knowledge at the time we published this article. We can't accept any liability for possible errors or subsequent changes in pricing or terms and conditions.)
CAR RENTAL COMPANIES:
Cost - £343.92 (including damage collision waiver with £0 excess applicable, road side assistance, misfuelling, locked keys, lost keys, damage to windscreen, tyres, and personal accident cover)
Cost - £352.74 (including damage collision waiver with £0 excess applicable, road side assistance, misfuelling, locked keys, lost keys, damage to windscreen, tyres, and personal accident cover)
Excess waiver insurance and other extra can only be bought at the counter when you pick up your car.
Cost - £383.81 (including damage collision waiver with £0 excess applicable, road side assistance, misfuelling, locked keys, lost keys, damage to windscreen, tyres, and personal accident cover)
Cost - £312.00 (including damage collision waiver with £0 excess applicable, road side assistance, misfuelling, locked keys, lost keys, damage to windscreen, tyres BUT EXCLUDES personal accident cover)
We've looked at 14 car hire excess insurance specialist companies to see how they fare:
SPECIALISTS CAR HIRE EXCESS INSURANCE COMPANIES
Cost - £48.36 (£39.99) / £64.74 (£59.99) / £101.86 (£94.99)
£47.84 (£42.99) /£54.99 (£54.99) /£109.99 9£109.99)
£50.90 (£40.71)/ £71.27 (£50.90) /£72.27 (£61.90)
£38.24 (£39.99) /£57.00 (£59.99)/ n/a
£59.40 (£40.00) /£67.78 (£49.99)/ n/a
£42.16 (£41.83) /£54.50 (£51.17)/ £100.30 (£73.29)
£49.31 (339.98) / £62.83 (£49.99) / n/a
£31.84 (£37.9) /£47.84 (£46.99) / £71.84 (£84.99)
£34.50 (£41.00) /£40.50 (£51.00)/ n.a
£37.65 (£66.25) / n/a / n/a
£39.45 (£39.45) /£47.02 (£47.02) /£70.54 (£70.54)
£54.23 (£58.20) /£83.18 (£78.83) /n/a
£38.92 (£43.46) /£56.57 (£74.93)/ n/a
£36.09 (£40.95) /£52.46 (£62.94)/ n/a
More information
Find out more about what each of the specialist hire car excess companies we have reviewed include in their policy, and the limit of the claims you can submit here:
Cover details - car hire excess companies reviewed by ClaimScore
Should you buy rental car insurance from your hire car company
There are a lot of horror stories about rental car firms selling car hire insurance at the time you come to pick up the car at a hugely inflated cost - often coming to the same amount or more as the cost of hiring a car for your holiday. Of course if you do buy your car hire insurance from your rental company, it might make your life easier in case of an accident: Your excess will be covered and you won't have to advance the money for the excess. If you buy car hire excess insurance from a specialist insurance supplier separately, you're likely to pay a lot less. But you'll need to pay the excess in the first place, in case of a collision. You'll then have to liaise with your insurance provider to recover that excess amount. It can take a lot of paperwork and time. That's what most people will put in the balance before making a decision.
Getting your car hire insurance when you land in Europe
If you just pick a hire desk at random when you land in France, Italy or Spain, you won’t know if you're getting a good deal. After waiting in line for an hour, you’re unlikely to be in the mood to read the terms and conditions carefully before taking the keys. Might be worth planning ahead. The AA has great advice on how to plan your trip ahead and avoid a potentially bad surprise at the counter.
Where can you compare the best car hire excess insurance options
You can use a service like Money Supermarket to compare what different options insurance companies can offer you in terms of hire car excess cover. Depending on where you're going, how long for, and what car make and model you are thinking of renting.
If you have had dealings with a car hire firm about an insurance claim, how did it go? Pop a comment below to let us know, or if you have any questions you'd like to ask us around car hire and car hire excess claims.
1 Comment
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anonymous said 4 years ago
Well written article!
Great article, would you consider adding our website to the list of comparisons? We cover the clients personal motor car and hire car for one fixed annual fee. https://goodbyeexcess.com/motor-and-hire-car-excess-insurance/