What Is Supplementary Liability Insurance (SLI) and When Do You Need It?

Liability insurance is equivalent to what we would call third party insurance in the UK but, unlike the UK, in other countries it can be limited.

Third-party liability insurance can cover claims made by other people for:

• Damage to their vehicle or property

• Injury to themselves or other road users

• Legal costs associated with the claim

If you are hiring a car within Europe, you are likely to find that third party insurance is included in your rental cover as, due to an EU directive, it is compulsory. However, there are other parts of the world - such as the USA and Canada - where it is more common to find that liability insurance or third party cover is either not included at all, or is at a lower level than you would prefer. This is where Supplementary Liability Insurance (SLI) can play a vital role.

What Is Supplementary Liability Insurance?

Supplementary Liability Insurance, often shortened to SLI, is a form of insurance that increases the amount of third-party liability cover available to you when driving a rental vehicle.

SLI is designed to supplement the liability insurance already provided by the rental company. Policies will only work if you have some level of liability insurance included in your hire (also known as primary liability insurance).

SLI through MoneyMaxim can increase your liability protection to up to US$1 million, providing significantly greater financial protection in the event of an accident that results in significant damage.

Why Is SLI Important?

If you are responsible for an accident, the cost of injuries, vehicle repairs, property damage and legal claims can quickly become substantial.

While many rental companies include some level of liability protection, the amount provided varies significantly by country and state. In some locations, particularly parts of the United States, the minimum liability cover included with a rental vehicle may be surprisingly low.

For example, legal minimum liability limits in some US states can be less than US$15,000. Although this may satisfy local legal requirements, it may be insufficient if you are involved in a serious accident that results in extensive property damage or injuries.

Without additional protection, you could potentially be held personally responsible for amounts exceeding the rental company's liability limits.

Where Is SLI Most Commonly Needed?

SLI is particularly popular among visitors hiring cars in the United States. Although rental companies generally provide some form of liability cover, the level may only meet state minimum requirements.

As with the USA, liability limits can vary between provinces and some travellers prefer the reassurance of enhanced protection through SLI.

Several Caribbean destinations provide relatively limited liability cover as part of the standard rental package, making SLI a valuable addition for many holidaymakers.

For this reason, many travellers choose to purchase SLI to increase their total liability protection to a more comfortable level.

Why Primary Liability Cover Matters

One of the most important points about SLI is that it is supplementary.

This means it assumes that some level of primary liability insurance is already in place through the rental company.

The rental company's insurance would normally cover the first portion of any claim, while the SLI policy would provide additional protection above that amount.

For example:

• Rental company liability cover: US$25,000

• SLI protection: up to US$1 million

If a claim totals US$100,000, the rental company's cover would typically respond first, with the supplementary policy covering the remainder within its terms and limits.

Before relying on SLI, always confirm that your rental company provides the required primary liability insurance.

If no primary liability cover exists, some SLI policies may offer reduced protection or no cover at all. Travellers should check the rental agreement carefully and, if necessary, purchase primary liability insurance directly from the rental company.

Why buy your SLI policy through MoneyMaxim?

When you run a quote through MoneyMaxim you will usually be offered a choice of different providers so you can choose a policy that best meets your needs.

The reason these policies can be relatively affordable is that they generally only become involved when claims exceed the level of cover already provided by the rental company. Most smaller claims are dealt with by the primary insurer.

As a result, travellers can obtain substantially higher liability protection at a relatively modest cost.

For travellers hiring cars in destinations such as the USA, Canada and the Caribbean, where liability cover may be limited, SLI can provide valuable peace of mind by increasing protection to as much as US$1 million.

Before travelling, check exactly what liability cover is included with your rental vehicle and consider whether additional SLI protection is appropriate for your destination and circumstances.