How car hire insurance works

When you hire a car, the price can be made up of a few different things:.

  1. The cost of hiring the car itself

  2. Any extras you ask for (or incur) - Like satnav hire, child car seats, additional drivers, or bringing the car back with an empty fuel tank.

  3. The cost of insuring the hire car itself – This is always included in the cost of the car hire, and covers you if the car is stolen, damaged, destroyed by fire, or even written off in an accident. This includes a collision damage waiver, so you don't pay for repairing or replacing certain things, although what each company covers will differ.

    However – and this is important – when you hire a car in Europe*, there's an excess to pay on that insurance, which is the sum YOU pay before the insurance kicks in. This excess is often £1,000, but it can be £3,000 for SUVs or premium cars. Often, that amount is hidden away in the small print and you don't know how much it is, and there's no option to vary the excess amount. The car hire company may take that money from your card immediately (refunding it later if not required), or block the amount on your credit card. This gives them control over how much they release to you later, and it means you'll have less spending power on your credit card during your trip. Worse, if they take the money but refund it later, you could lose £30 or more simply because of currency fluctuations between the two dates!

  4. Optional extra insurance – You have the option of taking out additional cover, often called car hire excess insurance or excess reimbursement insurance (see the next section below for more about this). This will reimburse you for any excess you have to pay if there's an incident, and covers other costs which aren't covered by the actual car insurance. You don't need this for car hire in the USA*. What's covered on these extra policies can vary, but it's things like:
    • The car hire excess (the part of any claim YOU have to pay, ie usually between £1,000 and £3,000)
    • Liability insurance – this covers YOU if people are injured or killed as a result of an incident you're responsible for, or if their property (car, house, personal possessions, etc) are damaged
    • Lost or stolen keys
    • Misfuelling costs – the costs of putting things right if you put the wrong type of fuel in the car
    • Flat batteries
    • Damage to interior items like satnav, dashcam or child seats
    • Damage to external items like the roof, underbody, windows and mirrors, roof/rear racks, wheels, rims, tyres, etc
    • Third-party damage
    • Towing and other recovery charges
    • Accident administration fees.

Buying car hire excess insurance

Car hire companies like to ask you to buy this additional insurance when you collect the car. But buying insurance from the car hire company can be very problematic. Here's why:

  • The cost of this insurance is often higher – The cost can be several times greater than cover bought elsewhere, like from us.
  • You may feel pressured to buy this on the day you collect – This means you won't have time to read the small print, compare cheaper options, or even fully understand what you're signing up for. There will probably be an impatient queue behind you, and perhaps impatient family with you, and you just want to get into the car and start your trip.
  • You may have already bought cover – Even if you already have the same kind of cover from another provider, like us, you may find the rental agent suggesting you buy their own policy. Again, in the stress of the moment, and with possible language barriers, customers often cave in and buy a second (expensive) policy they just don't need.
  • You may be in another country – Different languages, time zones and ways of working mean that if you buy this additional cover outside of your own country, there may be great difficulties and delays dealing with any claims.
  • It may be bundled in with a 'security deposit' – it can be really confusing because some companies just have an excess, some have a security deposit, and some combine both, and it can be hard to tell what's what.

What we do

  • We tell you very clearly, right up-front, what the excess is on each car which appears on our website, and whether that amount will be blocked on your card. We also let you vary the amount of the excess
  • We can offer competitive car hire excess cover when you book your car, so you DON'T need to buy any further cover when you collect it. This is the ‘Essential Cover' you'll usually see in the insurance section of our booking process (although it doesn't appear in some bookings due to certain restrictions). This cover is provided by a reputable insurance broker – underwritten at Lloyd's and regulated by the FCA – and it takes account of the value of the excess on that particular car, so you'll always have enough cover.
  • You can cancel our Essential cover right up until you get the keys for your hire car. So even if you arrive and decide to take out the car hire company's excess insurance policy, we'll refund our Essential Cover policy with no quibbles. So you won't pay for two policies.
  • We can almost always provide the car hire company's own excess insurance; in other words, the identical policy, from the identical provider, at the time of booking your car hire. This is the ‘Premium cover' you'll see in the insurance section of our booking process. The advantage is that we can provide it in advance, and often at a lower price than at the car rental desk. So you have plenty of time to see what's covered, weigh up your options and compare prices, instead of feeling pressured at the counter.

Find out about Essentials, the car hire excess cover we offer

*There's no excess on car rentals in the USA. So for car hire in America we offer another policy, which is very similar but it doesn't need to include the excess reimbursement.

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