Everything about car insurance is usually a little complicated to understand. Therefore, here we offer a simple and understandable guide that will make you not miss it.
The first thing you have to know is that the rental cars do not have insurance as they have private cars, but coverage and the conditions are usually somewhat different from what you might be used to.
The conditions of the coverage depend on each supplier, even if they have the same name, and they have to be specified in the terms and conditions that you sign when you pick up the car.
The insurance excess is the maximum amount of money you will have to pay in case the rental car is damaged for any reason: damage, accident, theft …
To give you an idea, the amount of the excess -which has to be detailed in the terms and conditions- can vary from a few hundred to a few thousand dollars. The amount of excess is usually based on the different categories of rental cars. Some companies, especially LowCost, may withhold this money on your credit card when you sign the rental agreement.
When you return the car, the company checks that there is no damage and everything is as you signed the contract. If everything is correct, they will not charge you anything. If there is a problem, the company will charge you the corresponding part of the amount of the excess, but never more. Unless it is proven that there has been negligence on your part. In that case, the coverage and the excess cease to be valid and you will have to assume all the expenses.
The same happens if the company has withheld your money on the credit card. If there is no problem, they will unlock the held deposit and they will not charge you anything. Depending on the company, this could take from ten days to a month, because they usually wait a reasonable time in case of a fine or a defect. Keep in mind that while the money is being held, the rental company will not take it out of your account but, having it blocked, you will not be able to use it either.
The deposit is a hold applied by companies to cover their backs in case they have to charge you for fines or penalties. And each company decides whether to retain it or not.
What if I do not want to be held back? You have to know that companies can apply two types of withholdings, which look the same but are not. On the one hand, there is the excess, associated with the coverage, and on the other the deposit.
In order to distinguish the two terms correctly, we invite you to read our article on the subject: What is the difference between insurance excess and deposit or deposit when renting a car?
To avoid the excess you can buy the premium insurance at the car rental counter. The price is higher, but the coverage will take care of all the damages and you will retain less money on your card.
So, am I interested in the excess? How does this work? Let’s see a real case. You want to rent a small car in Dublin for three days. The “Comprehensive insurance coverage with excess” costs you about €70, with an excess of €267. The ” Comprehensive insurance coverage without an excess” costs you around € 90. To save, you decide to take the “excess” option. If you did not have any problems (cross your fingers) you would save € 20. But let’s say you have a small shock that causes damages for a value of € 250. Well, you have to pay € 250 for the repair. You save € 20 at the beginning, but in the end, you pay € 250. Does it make up for it?
You can assess it based on your claim history: if you have more than one part per year in your regular insurance, the excess is usually not profitable. And remember that, statistically, your accident rate increases with a rental car.
What kind of coverages are in Car Rental Insurances?
Compulsory and third-party liability insurance, TPL
TPL, or “Third-Party Liability”. All rental cars are required by law to include the compulsory insurance of the automobile and supplementary insurance of civil liability for damages and losses to third parties arising from the use and circulation of the vehicle.
It is the known insurance ” TPL ” and is already included in the car rental contract. It covers the responsibility of the driver in the damages that it may cause to the properties of others, but not to the rental vehicle. It also includes injuries that the driver, you, originates from other people, inside or outside the rental vehicle.
By signing the car rental contract, you are also signing, and mandatory, this insurance.
The obligatory insurance of the automobile and the supplementary of civil responsibility are obligatory and are included in the rental contract.
Partial Collision Coverage, CDW
Partial Collision Coverage is also known by its English acronym CDW or “Collision Damage Waiver”. It is an optional coverage that covers the damage to the rental vehicle. Most companies, but not all, include it in the car rental price, in addition to other compulsory insurance.
It comes associated with excess and, therefore, in case of accident or damage to the rental vehicle, the most you would have to pay would be the amount of the excess. As a general rule, the CDW does not cover damage to tires, tires, underbody, windows, locks, breakage or loss of keys or remote controls, upholstery, clutch, towing charges or Damage caused by refueling the wrong fuel. Anyway, we remind you that each company defines what CDW coverage includes or does not include. You will have to review the terms and conditions of your contract.
The CDW is an optional coverage that covers damage to the vehicle. It is usually included in the contract but each company defines what it includes.
Super Partial Collision Coverage, with or without an excess
SCDW or “Super Collision Damage Waiver”, or the name that has occurred to the company. It’s like the CDW, but with vitamins. The equivalent of our beloved insurance at all risk. You can reduce or eliminate the excess.
It usually includes things that the CDW does not include, such as damage to windows, tires, and bass. As always, you will have to read the terms and conditions to check what is included and what is not included because it changes with each company.
Remember that if you hire the SCDW without an excess, whatever happens, the insurance covers everything and you will not have to pay anything. If the company allows you, by contracting this coverage you could pay with a debit card. And vice versa, if you want to pay by debit card you are obliged to contract the “coverage without deductible”.
The SCDW is an optional coverage similar to full-risk insurance. It may be associated, or not, with an excess.
Protection against theft, TP
Also called anti-theft coverage or TP or “Theft Protection”. This coverage covers the loss of the car when it has been stolen or attempted to steal.
In most cases, this coverage does not fully cover the value of the car and is associated with excess. Therefore, in case you are robbed, or try to steal, the vehicle, the most you would have to pay would be the amount of the excess. In addition, anti-theft coverage does not cover personal effects either. However, some travel, home or credit card insurance could take care of these unforeseen events.
Be careful, because, in case of negligence on your part, the company could demand the full value of the vehicle.
The TP is additional coverage that covers the loss of the car when it has been stolen or attempted to steal. It comes associated with excess.
Personal accident insurance, PAI
PAI, or “Personal Accident Insurance”. You can also call it “occupant insurance”. It is additional coverage that covers the damage or death of the occupants, which is not usually covered by other coverages. This coverage can also cover the theft of personal items that are inside the trunk.
Some travel, home or credit card insurance could take care of these problems.
The PAI is an optional coverage that covers the occupants.
Extended assistance coverage on the highway, RSN
This additional coverage covers roadside assistance but does not cover the problem or breakdown. It is very useful if you have a problem with the car.
RSN is an optional coverage that covers roadside assistance.
What do we recommend?
First of all, remember that all car rental companies are obliged to include in their contract compulsory insurance and third-party liability. Most, but not all, companies also include the CDW. It’s something.
All car rental companies are obliged to include compulsory and third-party liability insurance in their contracts.
If you ask us, we recommend that, without a doubt, you also hire coverage without excess. Why? Because no matter how good a driver you are, you are renting a car that you do not know. The dimensions are different, as is the maneuverability and reaction of the car. In addition, you will drive through unknown routes, and this adds an uncertainty factor that will make your driving not so safe.
We recommend you hire your car in a car rental comparison website like CarRentals.Deals and buy coverage without excess in the counter when picking up your car.
Do you have it clearer now? Well here goes our last advice:
Always remember that these covers, and the excess, lose their validity if you cause the damage intentionally, due to negligence (driving in a forbidden or reckless manner) or if you drive under the influence of drugs or alcohol … And you will have to pay the full amount of damages!
The coverages and the excess lose validity if you cause the damages intentionally or through negligence, and you will have to pay the full amount of the damages.