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Car Rental Excess insurance


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An Overview
How does it work?
Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW)
Excess Insurance
Supplementary Liability Insurance (SLI)
Fly Drive and Fully Inclusive Packages
Lock Out Cover
Road Rage or Carjacking Cover
Hotel and Travel cover
Key Replacement
Baggage and Personal Accident cover
Cancellation Insurance
Excess Insurance for Car Club Members
Van hire excess insurance
Age of policyholders and drivers
Country restrictions
Restrictions that may apply if renting in your home country
Frequently Asked Questions

Collision Damage Waiver
Collision Damage Waiver Insurance
Theft Protection

An overview

When you rent a car you become responsible for returning that car in the same state it was when you left the rental station. And as far as the car hire company is concerned its you they will look to whether the damage is your fault, another drivers fault or a hit and run!

Car insurance is available to cover drivers against any potential losses – and as most countries insist on such cover being arranged rental companies will include either minimum levels of cover in a rental agreement, or offer it as a stand alone product at the time of rental. However this insurance almost always includes a high excess (in the US it's called a ‘deductable’) to encourage the renter to take good care of the vehicle whilst it’s being rented.

To renters though this can be very risky – not only are they driving a strange vehicle, probably on unfamiliar roads, maybe on the opposite side of the road – but the insurance excess is probably much higher than they would choose at home. It will almost certainly be £500 and can often be over £1000!

So a new insurance product was developed – hire car excess insurance. This insurance was initially offered only through the rental companies, but as people started realising the high cost of these in-house products they started looking elsewhere and firstly one, and now a number of companies offer this cover.

This means that if such a policy is held a policyholder is in a position to turn down the optional insurance offered at the car rental station, and almost certainly make a huge saving over the prices quoted at the car rental counter.

It should be remembered though that the car rental company does not have a relationship with these insurance companies, and if an claim occurs the rental company are likely to charge the cost of any repairs, or the full excess (whichever is lower) to your credit card bill. You then make a claim on the excess hire insurance company to be reimbursed.

What do all the initials mean? CDW / SLI / SCDW / LDW are all terms used to describe different types of car hire insurance, so we detail the abbreviations you are likely to come across

Excess Insurance

Although CDW / LDW is generally provided automatically in Europe, Australia, New Zealand, Africa and most areas in the Middle and Far East the standard cover offered by hire companies tends to leave a significant excess. For example for a Fiat 500 rented through Avis in Milan in March 2010 the excess in case of theft is €1700, and for collision damage is €850.

This excess can be insured, again directly with the hire company, or through insurers such as those we feature. It can cost 5 or more times as much to use the hire company’s products rather than those you can buy online. Again the cover offered by the hire companies frequently still does not cover parts of the car such as tyres, roof, and windscreen.

The cover offered online will normally cover the excess up to a set figure (typically between £2000 and £3500), and will normally offer to cover the total vehicle.

Supplementary Liability Insurance (SLI)

This insurance covers you for claims made by third parties for either physical damage to their property (say their car) or injuries they sustain.

In Europe, Australia, New Zealand, Africa and most parts of the Middle and Far East this is normally included within the minimum insurance that has to be taken from your hire company. In the US and Canada either the car should be rented on an ‘inclusive’ basis or the insurance has to be bought separately, either from car rental counters or possibly from one of the online insurers we feature. In particular insurance4carhire, questor, Essential Travel, Atlas Direct, icarhireinsurance and intasure offer cover SLI for those looking to visit the US, Canada, the Caribbean, South America or other territories where SLI is not covered automatically.

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moneymaxim always recommend you take independent financial advice before acting on any article. Any views expressed are those of the editorial team at the time of going to press, and should not be considered as either recommendation or specific advice. Readers should be aware that no warranty is given that the details are correct and are recommended to read any policy documents carefully before entering into any contract.