Have you ever turned up at the hire car depot to pick your hire car for a week of adventuring when suddenly you are told that the price is not what it said online? Turns you need to pay a daily fee for excess insurance because if not there is every chance a meteorite might hit the car and you will be liable for the damage! OK, I’m exaggerating, but they definitely put the fear into you that unless you take out hire car excess insurance the chances are you will end up paying a fortune when everything goes wrong.
Well, what if I were to tell you there is a cheaper way to protect yourself?
What do I know about car hire?
I started my career with a car rental firm. In fact, I was their top Hire Car Excess Insurance Protection seller. So good in fact that I got promoted not once but three times in the short space of 2 years! It is therefore fair to say that I do know more than a little bit about excess insurance and why it is important that you understand the implications if you do or don’t opt to take it out.
What is Car Hire Excess Insurance?
When you rent a car in Europe, Collision Damage Waver (CDW) will usually be included. This means you are insured should something happen. However, just like with your own car insurance there will be an excess. The value of the excess will vary by company. For example, with my current hire car it is €1,100. So if anything happens to that car whilst I am in charge of it, I will be liable for up to a maximum of €1,100.
One of the things that is important to understand is that you are liable whether it is your fault or not. If the car returns in a different state to that in which you picked it up in (according to the paperwork), then you will need to cover the cost of the repair up to the excess amount. From experience in the industry, the majority of damage caused to rental cars happens when you aren’t even near the car! You leave it parked up in the supermarket, and someone bashes the trolly against it, or someone scrapes along the bumper when trying to get out of a tight space, or you pick up a chip to the windscreen, or drive over a nail and get a flat tyre.
If there is damage on that car that neither you nor the rental employee pick up when checking the car over, you will also be liable for it. It is rare that they will do this on purpose, but once you drive out, if it wasn’t marked on the paperwork, you are liable!
But why do I pay even if it is not my fault?
Again, it follows the exact same logic as the insurance on your own car. If someone else is at fault, and you have the evidence, then a back and forth ensues until the insurance companies finally agree on what to do. Sometimes the at-fault party concedes quickly and takes care of it all. But if there is ever a chance that they won’t need to pay up, then they will battle it out.
This is the same with car hire firms. They can never be sure if the at-faulty party will pay, so they will take your excess until it is resolved. If it does resolve in your favour, then they will return the money (sometimes minus an admin fee), but this could take ages (and I mean months!).
What about if the damage isn’t expensive to repair?
Maybe you got a flat and have returned the car on the spare. They are taking your £1,000 deposit when you know a new tyre only costs £200 at most. You are wishing you’d just taken it down the garage yourself!
Most rental companies will always take the full amount, and once repaired will refund you the difference (minus perhaps an admin fee). Why? Well, sometimes there is more damage than meets the eye. Perhaps you have managed to damage the alloy or the suspension (example if you got the flat by hitting a pothole) that will not be visible until inspected. Believe me, people do not drive car hires with the greatest of respect! The companies need to protect themselves by making sure they can cover whatever they may uncover.
But it’s not just the cost. It is also the time it takes to get it sorted. They’d likely see to a flat tyre immediately so you won’t be left waiting long, but a scuff may take much longer since they may not be able to book it in immediately if demand for the vehicle is high. You might be waiting a long time to see the difference between the repair cost and your excess returned!
Research carefully as to the reputation of the company
The company I worked for, Enterprise-Rent-A-Car, was very honest when it came to repair bills, never charging more than it warranted. However, there are other companies that we suspected of making money from repairs. In fact, I once interviewed someone working at a different hire car firm who said they were paid a bonus for spotting damage, even if that damage was already known! There have also been quite a few news stories about rental firms really inflating the cost of repairs so I would recommend to always be prepared to potentially lose that excess if you chose not to protect it!
What about cosmetic damage?
Most rental companies won’t repair cosmetic damage such as pin dents that occur when someone opens the door on to you. In fact, judging by the state of most rental cars not much gets repaired at all! All damage however devalues the cost of the vehicle and therefore the rental company may choose to charge you for that damage. Some may have flat fees published, others may make them up. Some may not charge at all. Make sure you know what their stance is as small damage is often not marked on the contract.
I advocate always taking a video highlighting every blemish, big or small, whilst still in the airport car park. That way you have a location and time stamp as well as evidence of what was and wasn’t on the car at the time of picking it up. Make sure you check tyres, tyre thread, damage on alloys, pin dents on doors as well as scuffs on door edges. Take a good look at the windscreen as well the roof! And always check there is a spare tyre or repair kit in the boot! Not only because you may need it, but because you could be charged if it isn’t there when you return the car! The same goes for any other safety requirements that they might provide such as hi-viz vests or triangles. In France for example, it is compulsory to have them in the car.
Does this mean I should take out Car Hire Excess Insurance?
My recommendation is to always have your car hire excess protected unless you are comfortable gambling a significant amount of money. Protecting yourself though doesn’t mean buying the excess protection that the hire company sells. That tends to cost around £15 a day or £150 a week which can soon add up if on a longer trip. There are third party companies that offer hire car excess insurance at much more affordable rates.
I use Insurance4CarHire which costs £46 for the year and includes unlimited rentals in Europe and with up to 7 additional drivers so long as I am the named driver on the rental. As someone who rents regularly, I find this works out the cheapest and I still have peace of mind knowing that I won’t be liable for anything.
One thing that is important to note however, is that you will still need to pay the rental company the excess should anything happen, and then claim it back from whichever 3rd party insurance firm you chose to use. This is a very important note as it means you do need to have the excess amount available and be able to live without it for a couple of weeks until the payment comes through from the insurance company. If this would really stretch you then I recommend taking out the excess offered by the car rental company.
- Car Hire Excess insurance is not the rental company trying to cheat you, it is no different to the excess on your own car insurance
- You will be liable for any damage that happens whilst the car is in your care whether it is your fault or not
- Most companies will take the total value of the excess and hold it until the repair has been completed and they know the actual cost – be aware this can take a long time and some companies allegedly inflate the repair cost prices
- I would always recommend taking out excess insurance unless you love to gamble with large sums of money and trust all other drivers on the road!
- It is much cheaper to use a third party car hire excess company than to buy it directly from the rental company
Please note that the above is only my opinion and does not serve as legal or financial advice. I recommend you do your own additional research.
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