• Michael Christensen

Car Rentals // Avoid Common Mistakes

Updated: Jan 4

Insurance works differently for when you are buying a car and when you are renting it. Most counties' insurance policy covers the basic package of three types. However, the types of cover might vary. Through this article, you will attain knowledge about car rental insurance.

All rental cars need to have three basic covers - theft cover, damage cover, and third-party cover. Renowned exceptions to this case are Mexico and Chile since theft and damage covers are not required in those countries. However, all European countries cover these aspects.

An important thing to remember about car rental insurance covers is that this only a waiver. This means that the company does not ensure damages but only waives its liability to pay for damages.

Collision Damage Waiver

In case your rental car's bodywork gets damaged, a collision damage waiver will cover it for you. All you have to pay in that case is the 'excess' or the 'deductible' amount.

Some parts of the bodywork, such as the windows and the wheels or the interior, are not covered by the waiver. Therefore, if the car sustains damage on any of these parts, you will have to pay full price.

While renting the car, you will have to sign a rental agreement. If you have not done so or gone against the agreement, you will not receive the insurance benefits. Most country's rental agreements state that you will not be protected under this insurance if the car sustains damage while it is illegally parked or if you are speeding or driving under the influence.

In case you see the term 'Loss Damage Waiver' and get confused, it is a combination of Theft Protection and Collision Damage Waiver.

Theft Protection

In case your rental car gets stolen, you will be protected under Theft Protection of the insurance policy. In such a situation, all you might have to pay is the Theft Protection Policy's excess.

Things such as the car getting stolen due to the keys left in the ignition are not covered in rental agreements. You will also not receive protection if the car is stolen from a country that is not covered in the agreement.

Third-Party Liability

In case you hurt someone with your rental car, Third-Party Liability will cover a lot of the costs. Every rental agreement policy has different maximum amounts for the money that can be accessed to pay for this kind of an issue.

Rental agreements do not cover things such as damaging someone's property on an unmarked road. You will have to go through the paperwork thoroughly to know exactly what protection you will be receiving.

Can Credit Card Insurance be Used to Cover for a Hired Car?

Yes, a maximum of US credit cards offers the option of car hire insurance. However, you must make sure to check with the credit card company about what all is covered in a rental car cover and what all countries the insurance is valid in.

In case you are not aware of the credit card policy validity for your rental car, you must confirm the same from the rental company itself.

How Much Does Loss Damage Waiver Cost at the Counter?

Loss Damage Waiter and Third-party Liability will not cost you anything extra in European countries. This is because these covers are included in your rental cost.

If you're hiring outside of Europe or don't belong to any European country, you will have to buy these covers. Purchasing them from the rental companies can cost you anywhere between £15 and £60 per day.

The cost will vary according to the rental company you are hiring from, your hire's duration, and the type of rental that you require.

What Additional Insurance or Covers Can be Bought?

Before you think of buying additional covers, it is best to read your hire's terms and conditions to know what all is already covered. You can ensure your car more comprehensively by buying additional covers.

You can buy these covers online while booking the car or even when you pick up the rental. In any case, the counter staff will offer you extra insurance covers when you go to pick up the car.

Most of these covers either reduce the excess amount that will have to be paid or cover for unprotected bodywork parts.

What Extra Insurance Covers are Offered at the Rental Counter?

Whether you are planning to get extra covers or not, the counter staff will indeed offer you some additional covers. These covers are a part of their own 'packages.' The most common types of insurance covers provided at the rental counter are as following.

Super Collision Damage Waiver (SCDW)

If you are skeptical about the Collision Damage Waiver's rental agreements, you can opt for Super Collision Damage Waiver. This covers all the uninsured bodyworks parts such as wheels, windows, and interior. It also offers 'zero excess' policies that do not require you to pay any excess whatsoever.

Personal Accident Insurance (PAI)

This is one of the common insurance covers that are bought in Canada and the USA. It covers the hospital fees if one of many passengers inside the rental cars is injured due to an accident. You will have to read the agreement and see how much amount is likely to be covered under this insurance.

Uninsured Motorist Protection (UMP)

This is another insurance cover that is very popular in Canada and the USA. In case you are driving in a rental car and get involved in an accident with someone who is not adequately insured, the cover will help you manage the finances. You might not have to pay for any injuries or damages, depending on the agreement.

Supplemental Liability Insurance (SLI)

This is an offer that is generally only offered in the USA and Canada. Since Third-Part Liability cover does not cover significant expenses, you can buy this insurance to boost the maximum annual money that that coverage will pay out.

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