Savvy consumers could save money by purchasing their car hire insurance from a third party, rather than directly from the car hire company
Understanding the ins and outs of rental vehicle insurance can be tricky, especially if you’re hiring a vehicle for the first time. Andrew Segal from iCarhireinsurance.com tackles some of the myths associated with the process to help clarify things for you:
1 . You can only purchase insurance through the rental company –
This may have been true in the past but today the consumer has the choice of pre-purchasing insurance through independent brokers who are able to offer a much better deal than the rental company themselves. This is a rapidly growing market and can offer big savings.
2. Insurance NOT purchased through the rental company isn’t valid –
This is often a message sent out by the rental companies in order to get you to purchase your insurance through them. They claim independent insurance does not cover their vehicles, however it is the policyholder and NOT the vehicle itself which is covered meaning it makes no difference which company you’re renting from.
3. The rental companies’ excess insurance product is my best option –
In order to reduce your excess or eliminate it completely, the rental company will offer you their excess insurance product (normally at the rental desk as you’re about to collect your vehicle). This can cost as much as THREE TIMES the price of purchasing through an independent broker who specializes in this area, so you could be a lot better off buying your excess insurance in advance.
4. All parts of my rental vehicle are covered should any damage occur –
More often than not the excess insurance sold by the rental companies will NOT cover damage to the tyres, windscreen and undercarriage of your vehicle, which are the most vulnerable parts. Instead they will offer you an additional product (and therefore, charge) to have these parts covered. Independent brokers generally offer this cover as standard.
5. The cost of excess insurance varies depend on which vehicle you hire –
Purchasing excess insurance through an independent broker covers your rental vehicle no matter what the size without any price variations (there may be different price categories for vans, campervans, etc.). So whether you need a two-seater or an SUV, the cost will be the same.
Having purchased this type of insurance myself with friends for a trip to Malta where we needed two vehicles I was told I would have to buy the car hire company’s insurance as they didn’t recognise my insurance, even though it was underwritten by a well-known global insurer.
I put this concern to Andrew who responded by stating: ‘Some car rental companies would prefer you to buy their own policy to remove the excess or CDW/LDW they offer you when you hire a vehicle from them and may try to undermine your confidence in our policy at the rental desk.
‘If they try to tell you that your policy is “invalid” or that they “don’t recognise” it and that you should buy theirs its worth remembering that:
• Our policy is independent from any car hire company and our promise to reimburse you for any excess or CDW/LDW claim is not affected by who you hire your vehicle from or what they tell you.
• Our policy is underwritten by one of the highest quality insurance companies whose policies are consistently rated 5 stars by the leading insurance rating company Defaqto®.
• Both Halo and your insurer are based in the UK so you are protected by the stringent rules and regulations that apply to insurance businesses here and we are easy to contact locally.
• Most overseas vehicle hire companies offer excess or CDW/LDW policies from insurers who don’t operate in the UK and some car hire companies don’t offer independent insurance protection at all.
Andrew continued: ‘however, you will require a credit card with a sufficient limit*. When you use our policy and refuse the rental company’s excess waiver, they will usually require your credit card details when you collect the vehicle. This allows the rental company to hold a deposit on your card up to the value of the excess notified on your rental agreement and it allows the rental company to charge this money to your card in the event that the car is damaged during the course of your rental.
‘This is quite normal and is safe for you to do firstly because our policy is designed to reimburse you for any amount they take in relation to your excess or CDW/LDW with them and secondly if your card is misused it will usually be protected under Section 75 of the Consumer Credit Act 1974, which makes your credit card company jointly responsible for any amount charged to your card when it should not have been. If you do not have sufficient credit, or plan to use a debit card, most car rental companies will not release the rental car unless you purchase their optional Excess Waiver product to eliminate the potential excess. Sometimes, the Excess Waiver is referred to as SCDW, Top-up, Super Cover, the list goes on.
Andrew concluded: ‘In order to avoid the above, make sure you use a credit card with sufficient room so it does not become an issue while you are abroad. If damage is incurred you remain responsible to the car rental company for that damage until it is paid for. There is no contractual link between the car hire company and the insurer, so if damage has been incurred, you need to seek reimbursement from the insurance company for what you have had to pay the rental car company.’
*It is advised when searching for car hire quotes to also ask what the deposit will be if using your own car insurance. This can vary dramatically between hire car companies and depending on the currency can be between £500 – £2,500. This will be taken at the point of collecting your vehicle, so you must have enough balance on your card or you will be left with only two options – pay for insurance again at a much higher rate or be refused a hire car.