What is car hire excess insurance and why should I buy one

What is car hire excess insurance?

While renting a car, you no doubt have had to read and sign a multitude of forms.  Don’t be pressured by the long queue behind you and quickly sign everything.  One form that is quite important is an optional insurance policy known as car hire excess insurance (also referred to as excess insurance or excess waiver insurance).  But what does this terminology actually mean?  In simple layman’s terms, it means that in the event that your rent-a-car is stolen or damaged, an insurance policy protects you from any extra charges you may undergo while the vehicle is in your care.  The excess, also known as the deductible, is the amount of money you will have to pay the rental company.

Should I consider buying one?

Even though you may be a competent driver, it is hard to guarantee that nothing will go wrong.  God forbid that you should be involved in an accident.  It’s not just your driving that you have to worry about.   Many times, it is not even your fault.  Your vehicle may be damaged while it was unattended.  A classic example is someone hitting your car while backing out of a parking spot.  It is fairly common for cars to sustain low-level damage.  It may seem as if the damage is nominal and won’t cost much but inflated rental charges can sometimes really put you off track.

How does it work?

Your hire car comes with a standard insurance, usually known as Collision Damage Waiver.  In the event that your car is stolen or damaged, you are liable to pay an excess before the rental agency can cover the cost of repair or replacement of your vehicle.  You may end up paying a hefty sum.  By purchasing car hire excess insurance, you are covered for a much larger amount.  Many people find that having this policy reduces the stress of unforeseeable events on trips.

What are my options?

Car hire excess insurance is optional.  You may decide that you do not need one, especially because of the added expense.  The rates vary depending upon the age of the driver and the area where you are traveling.  For others who do not want to take the risk, they can either buy this policy from the rental company or from an independent source.  It may be wiser and cheaper to buy this insurance policy before traveling.  The excess waiver offered at the rental agency is typically more expensive than stand-alone alternatives.  Keep in mind that independent policies work on a reimbursement basis.  So when there is damage to the car, you will have to pay the rental company the excess fee stated in the agreement. With proper documentation, such as pictures and paperwork, you can then claim the excess amount from your insurance company. 

So the next time you travel, consider having an insurance policy in your pocket.  It will save time and money when you rent a car.

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