Car Hire Knowhow

What's the best way to insure your rental car?

What's the best way to insure your rental car?

Normally, rental cars come with three basic types of cover: damage cover (technically called Collision Damage Waiver), theft cover (Theft Protection) and third-party cover (Third-Party Liability). When you book a car, these will come as standard in your deal. The three basic types of cover come with an excess (the first part of the bill, which you will have to pay). The damage cover, called Collision Damage Waiver, only covers the car's bodywork. The engine and windows, for example, are not covered. You can buy insurance to cover your excess and/or extend what the standard cover protects.

Here are the four main options you have for insuring your rental car:

Insure online when you book

When you book your car through a comparison site or a broker, you can easily compare rental companies, different cars and different prices in one go. And you can buy additional insurance to top up what your deal comes with.

Pros

  • The price is often lower than cover available direct from the rental company.
  • You can arrange your whole rental from home in your own time, and compare prices.
  • If you rent a car abroad, you don't have to worry about language issues as you'll claim when you're back home.

You have a separate company to discuss your claim with. For example, if the rental company charges you for something you don't agree with, your insurance company may help you fight the charge.

Cons 

  • The price is often higher than insurance bought from a stand-alone insurer.
  • If the car gets damaged, you'll have to pay the rental company first then claim it back.
  • This type of insurance won't reduce the excess nor your deposit you'll pay when you pick up the car (although it does insure both).

Protect your rental directly with the rental company

If you book your car directly with the rental company online, you can buy cover for it at the same time. Or you can buy their cover when you arrive at the rental counter. (Often this is not technically insurance – it's a waiver, which means the company waives its right to make you pay for damage.)

Pros

  • If anything happens to the car, you wouldn't have to pay first and then claim it back. The rental company would also be your insurer. If you meet the terms of the insurance, you will not be out of pocket while waiting for a claim.
  • Often, this type of cover or insurance will reduce your security deposit and your insurance excess. In some instances, it may reduce them to zero.

Cons

  • This cover is often more expensive than when you buy it from a comparison site or a third-party insurer.
  • If the rental company charges you for something you don't agree with, there's no separate insurance company to assist you in fighting those charges.
  • Often this cover is a type of Super Collision Damage Waiver, which is not technically insurance, so it is not regulated. 

Insure your car through a third-party insurer

You can choose to buy insurance from a third-party insurance company. There are several options online specially designed for car hire. This is often sold as 'excess protection insurance'.

Pros

  • The price for excess protection insurance is often lower than additional cover from a comparison site or direct from the rental company.
  • You can buy it from home, and you may have the option of buying annual cover.
  • If you rent a car abroad, you don't have to worry about language issues as you'll claim when you're back home.
  • If the rental company charges you for something you don't agree with, the company you bought your insurance from can help you fight that charge.

Cons

  • If the car gets damaged, you'll have to pay the rental company first then claim it back.
  • This type of insurance won't reduce the excess nor your deposit you'll pay when you pick up the car (although it does insure both).

Don't buy any additional insurance at all

You can just stick to the basic cover that comes with your deal. 

Pros

  • There's no additional cost. You would just pay for your rental and nothing else on top for additional insurance.

Cons

  • Your excess won't be protected nor reduced. So if the rental car is damaged while you have it, you'll be responsible for the full excess and you will lose your deposit.
  • The basic package covers bodywork only. So if (for example) the engine, undercarriage, windows or wheels are damaged, you'll have to pay the FULL COST of any repairs. To find out more, see Which parts of a hire car does Collision Damage Waiver cover?
  • If the rental company charges you for something you don't agree with, there's no separate insurance company to assist you in fighting those charges.

Insurance checklist

To help you choose a good comprehensive insurance policy for your rental, here are a few questions to think about:

1) Does it cover damage to the engine, tyres, wheels, roof, undercarriage, windows and mirrors?
2) Does it cover towing costs and roadside assistance?
3) Does it cover your luggage and other personal items
4) Does it cover you if you lose the keys?
5) Does it cover rental company admin fees?
6) And is it actually regulated insurance?

Choosing the right rental car insurance for you

Here are the options so you can easily compare. 

Option Price Excess protected? Deposit and excess reduced? Pay first, then claim money back? Separate insurer to assist?
Insure online when you book More expensive than third-party, cheaper than directly from rental company Yes No Yes Yes
Insure directly with the rental company Usually the most expensive option Yes Usually yes No No
Insure your car through a third-party insurer Usually the cheapest option for additional insurance Yes No Yes Yes
Don’t buy any additional insurance at all Cheapest (no additional cost) No No No No