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Car Hire Excess Insurance: How do Rental Excess Policies Work?

General car rental insurance may come with high excesses & exclusions that may not give full cover. Car hire excess insurance may be worth considering.

How does your car hire excess insurance work?

Those planning on hiring a car, especially on European holidays, may have some insurance needs that will not be met by a rental firm's policy. They may also be left seriously out of pocket in the event of an accident or damage to the vehicle. Car hire excess insurance may help cut costs and boost cover to save money if a claim needs to be made. Read also: Auto Insurance Attorney Representation.

What is Car Hire Excess Insurance?

Hire car excess policies are designed to pay for claims excesses, taking payment liability away from the individual. Like most other types of insurance, vehicle rental policies usually come with an excess clause. This is set as a flat sum.

If the individual needs to make a claim, then they will need to pay for this out of their own pocket. The rest of the claim is then met by the insurer subject to policy conditions. An excess insurance policy allows them to claim back their own costs.

Why is Car Hire Excess Insurance Worth Considering?

The excess given with many car hire insurance policies may a lot higher than the norm with some products setting excesses of £500-1,000+. If there is an accident or damage to the vehicle then the individual that is responsible for renting it may find themselves with a hefty bill to pay. Car hire excess insurance may help cover these costs.

Many of these policies also offer other options that may be useful such as insurance against damage to windscreens, windows, roofs, undercarriages and tyres. Although these are commonly damaged areas, many standard car hire insurance products will not cover this damage at all. This could, once again, see a car hire excess policy save some money.

Where to Buy Hire Car Excess Insurance?

Some consumers will buy a hire car excess policy before they go on holiday/make their trip. Others will wait until they actually pick up their hire car and will buy it from the rental company. Buying from a car rental firm will generally work out to be much more expensive than buying from a specialist insurer. A recent research report estimates that UK consumers waste £800 million on car hire excess insurance every year by not buying in advance.

What to Look for in a Car Hire Excess Insurance Policy?

Generally, excess insurance policies work on a reimbursement basis. Individuals may, therefore, need to be prepared and able to pay any excesses according to the terms of their rental company in the event of an accident/damage. They can then put in a claim to their excess insurer to get their money back.

Things to consider when buying this kind of policy include:

  • What is (and isn't) covered and how much excess protection is given under the policy.
  • What kind of cover is on offer (i.e. daily or annual).
  • What conditions are set on claims (i.e. maximum claim amounts, numbers of claims in a given period).
  • How many times a vehicle can be hired and how long it can be rented for.
  • Whether any additional benefits are offered (i.e. damage to certain areas of the vehicle, lost key and additional insurance options).
  • How many drivers can be named on the policy and whether age limits are imposed.
  • Which types of vehicles can and can't be be covered. Read also: Rhode Island Auto Insurance Tips.

Shopping around for car hire excess insurance is worth doing. Costs vary in this sector and consumers may be able to save some money by comparing quotes before choosing an insurer. Bear in mind that it is also possible to buy similar excess reimbursement policies to protect other kinds of insurance (i.e. home, health, pet and car policies) which may suit those looking to save money on future claims.


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