This is because the type of cover that protects you against having to pay for damage to your rental (collision damage waiver or ‘CDW’) generally carries an excess. The excess, the amount you agree to pay towards any claim, can vary.  In the UK, for example, it ranges between £500 and £1600. In other countries it may be more, particularly in places like the USA where CDW cover which can also known as loss damage waiver, may be very limited indeed.

With a car rental excess insurance policy, it is possible to remove or at least reduce the amounts you could be expected to pay towards a claim. This type of insurance can also be known as excess cover, or Super CDW.

However, the car rental insurance supplied by the car hire companies will generally exclude certain parts of the car from cover. These areas typically are the windscreen and other windows, the tyres, and the under body of the car.  So even if you top-up your basic cover with an excess policy bought from the car hire companies, you may find that these parts of the car are still not covered and that it would still be your responsibility to pay for the repair.

With car rental excess insurance from an insurance specialist however you not only likely to find that these ‘exclusions’ are included as standard but also that there are a number of other additional cover features including:

• broken or lost key replacement;

• cover for baggage stolen from the car;

• personal accident cover;

• recompense if you find that you have to cut your rental short due to illness.

You may also have the option of buying car rental excess insurance on a daily or an annual basis.

Daily cover operates pretty much like the cover you could buy from the car hire company. It is only valid for the number of days specified and this generally corresponds to the actual rental itself.

An annual excess insurance policy on the other hand, can cover all of your rentals over a period of a year subject of course to some terms and conditions relating to the types of vehicle that can be rented. This type of policy does not cover commercial vehicles, motorcycles, motor homes, sports, vintage models or very high value cars.

If you are a regular renter or know that you will have to rent a car on a number of occasions over the next 12-month period, then you can do a simple calculation (total number of rental days multiplied by the standard daily rate) to see for yourself the potential benefits of this type of excess insurance policy.

If you do opt for car rental excess insurance from a specialist, then you may find that should you damage your car, the rental company will probably charge your share of the repair costs to your credit card. You would then simply just have to claim on your policy for reimbursement.

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Collision damage waiver cover will generally carry an excess and may often also exclude certain parts of the car like the windows, the tyres and the under body from cover. This means that if one of these parts is damaged, it would be your responsibility to fund the repairs.

The excess is a mechanism used by insurance providers to help keep premium costs down. If you agree to share the risk and pay part of any claim they can offer lower premiums. Car hire excess is no different.

The excess you may be required to pay can be a fairly substantial amount. In the UK for example it can range from £500 to £1600 so it is not surprising that some people prefer to take out additional car hire excess cover to insure themselves against this risk.

Excess cover bought from the car hire companies may be relatively expensive and may still leave you liable to pay for any damage done to those ‘excluded’ parts of the car. This is typically not the case with car hire excess cover bought online from car hire specialist insurance providers.

Not only do their products typically tend to be cheaper but they also may include cover for the windows, tyres etc in their cover.

The excess insurance provided by the specialists can generally be bought on a daily or an annual basis. Daily cover is normally priced as a cost per day for each day of your rental. Annual cover is similar to any other form of annual insurance policy. It is held by you as the policy-older and will allow you to rent a car on a number of occasions during the period of its validity.

If you rent a car regularly, an annual policy may be a very economical way of providing yourself with car hire excess cover

There may be some terms and conditions regarding the types of vehicle that can be hired. For most rentals though this should pose no problems since it tends to be the more exotic types of car such as sports or vintage models, motor homes, motorbikes or commercial vehicles that are not covered.

Car hire excess insurance from the specialists can typically also provide you with a number of additional features including:

• cover if your baggage is stolen from a locked boot;

• lost or broken key replacement;

• personal accident cover;

• help if you are locked out of the car;

• benefit if your rental has to be cut short due to illness.

You typically can’t always buy annual cover from the car hire companies. It is available only from specialist insurance providers. Getting an online quote may be the first step towards some real car hire excess cover savings.

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The excess on you car hire insurance represents the maximum amount of money that you could be charged following an accident to the hire car that needed to be repaired or even its loss or theft. Depending on the primary insurance in place, this could represent a substantial sum of money.

You can insure yourself against having to pay this excess by taking out daily car hire excess cover to reduce or remove this risk. Excess cover sold by the car hire companies may often be expensive and looking for a cheaper alternative may be a sensible option.

How does it work?

You may at first find the idea of renting a car from one company and buying insurance from another a bit strange. It actually works quite simply.

The first thing that you have to do is to buy your policy in advance of your rental. The daily car hire excess cover will only come into effect on the day and for the number of days that you specify.

When the car hire company offer to sell you ‘top-up’ insurance to cover the excess, you simply tell them that you’re already covered.

From the car hire company’s point of view, you are still responsible for the excess and if you have an accident and there is a repair bill, they will simply charge your portion of this to your credit card.

All you then have to do is claim on your excess insurance policy for reimbursement.

What else do you get for your money?

Unlike daily car hire excess cover supplied by the car hire company, many online products may also offer additional features.

Traditional collision damage waiver (CDW) cover, which is the main form of cover for the car itself, tends to exclude certain parts of the car from cover. If these parts are damaged (typically the tyres, glass and under body) they are in effect uninsured and it is your responsibility to pay any repair costs. Excess cover from an online supplier often includes cover for these parts as standard.

Other typical features include:

• Personal life cover;

• Replacement of broken or lost keys;

• Baggage stolen from the car provided it was locked in the boot;

• Recompense if you have to cut your rental short.

How can I find out more about it?

The sites that supply car hire excess cover will typically also publish their policy documents in easy to understand language. Browsing through these may answer many of your questions.

You could use their online quote facilities to find out exactly just how much it would cost you. Remember that things like the length of the rental, the people who will be driving the car, which country the rental is for, may all affect the price, so it may be useful to have this information to hand if you are looking for a fairly precise figure.

So if you like the idea of saving some money on daily car hire excess cover and of benefiting from some of the additional features on offer, why not have a look online at what’s available? You may be pleasantly surprised.

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In the case of a rented car, it may be advisable to have two types of insurance. Collision damage waiver (CDW) to cover damage to the car itself and Third Party insurance, which covers damage or injury that you may do to someone else while responsible for the hire car. Your rental agreement may include these basic forms of cover.

If you just jump in and drive off though, you may be in for an unpleasant surprise if you then have an accident. This is because typically the standard cover, as supplied by the car rental companies, will not be at a level to free you of all responsibility for paying damages or repair costs. So, damage the car and you could find yourself being presented with a hefty bill for repairs.

The amount you would be expected to pay would typically correspond to the excess that existed on the CDW policy. This varies according to the company you rent from and the country you rent in and may be between £500 and £1600.

This is where car hire excess insurance comes in. It is an additional insurance policy, which would refund you for any excess charges levied by the car rental company.

If you purchase this insurance from the car hire company, that’s probably all it would do but if you have a look at the specialist providers of rental car insurance operating on the Internet, you may be able to find car hire excess insurance that may typically offer a number of very useful additional features.

These could include;

• replacement of lost of broken keys;

• theft to, or damage of, baggage left in the vehicle;

• personal injury cover;

• cover for parts of the car often excluded by many standard CDW policies – such as the glass and tyres.

Car hire excess insurance bought from car hire specialist insurance providers can also be bought as an annual policy rather than for a specific number of days based on the duration of your rental. What this means is that your annual policy could cover you each time you rent a car in the course of the 12-month period.

Policies of this type generally have restrictions on the types of vehicle that can be covered. Very high value cars for example are not covered and neither are sports or vintage models. You may also find that motor homes, motorcycles, trailers, caravans and trucks or commercial vehicles are similarly excluded.

Arriving to pick up your hire car with your own car hire excess insurance policy may not only save you time at the hire desk but also provide much wider cover and at a cheaper price.

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What’s included?

Many car hire companies will rent a car to you with insurance in place that meets the minimum requirements of the country you intend to drive in.

Different countries have different minimum standards, so when you pick up the keys you may have all that is legally required to drive in that country.

What you may not have though is protection against having to pay for repairs or replacement of things that are not covered by your standard insurance and this is why you may need to consider daily car hire excess insurance.

CDW or LDW rarely provides 100% cover for two basic reasons.

The first is that CDW generally carries an excess. This represents the amount of money that you would be responsible for paying towards bills relating to damage or theft of the rental car. Daily car hire excess insurance may therefore be needed to provide cover in the event that you are asked to pay the excess.

Excess amounts vary from company to company and country to country but they tend to be between £500 and £1600.

The second reason is that most policies of this type typically exclude certain parts of the car from their cover. This means that if they get damaged, you are responsible for paying for the repairs. Typically these parts are the under body, tyres and glass.

Driving in the USA

The position in the USA is slightly different to that in the UK and Europe when it comes to car rental insurance. Typically when you rent a car in the US, there may be little or no insurance included in the price at all. Without any additional or top-up insurance, you may then be responsible for most if not all costs relating to the car damage or loss. This could in theory be anything up to the value of the car itself.

Daily car hire excess cover

Car hire companies recognise that many people may find the risks associated with having to pay the excess to be unacceptable. They therefore offer daily car hire excess insurance to their customers. You are not under any obligation to buy this cover from them though and you may find if you do so, you have not only paid too much but also missed out on some additional features which may be included at no extra cost in the products on offer from some alternative providers.

These additional features may include things like;

• cover for excluded items;
• replacement of lost or damaged keys;
• compensation if you have to cut your rental short due to illness etc

Taking some time to understand what daily car hire excess insurance is, why you may need it and where best to buy it, may be time well spent.

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