How Does Insurance Work When Renting a Car?
Renting a car can be simple, but figuring out the right insurance can sometimes feel overwhelming. From Collision Damage Waivers (CDW) to liability insurance, knowing what you’re covered for is essential. This guide will break down everything you need to know about motor insurance when renting a car in the UK, so you can hit the road with confidence.
Key Rental Car Insurance Terms
Let’s break down the key types of coverage you might encounter when renting a car:
- Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW): Covers damage to the rental car, usually excluding certain parts like windows or tyres. Theft protection is sometimes included.
- Liability Insurance: Protects you against damages or injuries caused to other people or their property while driving the rental car.
- Personal Accident Insurance (PAI): Covers medical expenses for you and your passengers if injured in an accident.
- Personal Effects Coverage (PEC): Protects your belongings if they are stolen from the rental car.
- Excess Insurance: Lowers the amount you pay out of pocket in case of damage or theft.
It’s key to make sure you check with your insurer as to what cover you have as each insurer is different and will have different coverage.
Optional Extra Coverage
Many rental companies offer additional insurance to help you reduce your liability and cover areas that standard coverage doesn’t protect:
- Excess Reduction or Super CDW: This optional coverage can significantly reduce or eliminate the high excess associated with CDW, which can sometimes be as high as £1,000+.
- Personal Accident Insurance (PAI): Covers medical expenses for the driver and passengers in the event of an accident.
- Personal Effects Insurance: Protects your belongings if they are stolen from the vehicle.
If you want to avoid high excess fees but don’t want to pay the rental company’s extra fees, third-party providers also offer car hire excess insurance, which can be a more affordable alternative.
Money-Saving Tips for Your Rental Car Insurance
While understanding your insurance options is essential, there are also ways to save on your insurance costs when renting a car:
- Compare Insurance Deals: Don’t just accept the insurance offered by the rental company. Compare quotes from third-party providers or use comparison websites to find the best deal on car hire excess insurance.
- Know What Insurance You Need: If your personal motor insurance or credit card already covers aspects like Collision Damage Waiver (CDW) or theft, you don’t need to pay for additional policies. Understanding your existing coverage can help you avoid unnecessary charges.
- Check Age Restrictions: Being under 25 or over 70 can result in higher insurance premiums. Some rental companies charge extra to cover these age groups, so it’s wise to review these details before booking.
- Mileage Limits: While mileage doesn’t directly impact your insurance premium, exceeding a rental’s mileage limit can lead to additional fees. Some rentals have a cap on daily or weekly miles, and you’ll be charged for every extra mile. If you plan to drive long distances, consider renting a car with unlimited mileage to avoid these charges.
Do You Need Rental Car Insurance?
Wondering if you really need to pay extra for rental car insurance? It depends on whether your motor insurance or credit card provides coverage. Let’s break it down:
Personal Motor Insurance
If you already have motor insurance, it may extend to rental vehicles. However, double-check your policy to ensure you’re covered for rental car damage, theft, and liability. Keep in mind the deductible limits, as you might still face out-of-pocket costs.
Credit Card Rental Car Insurance
Many major credit cards offer some level of rental car insurance when you use the card to pay for the rental. This coverage is usually secondary, meaning it kicks in after your motor insurance has been used. Make sure to verify the details with your card provider, especially if you’re traveling abroad.
Be aware that some rental companies may not accept personal motor insurance or credit card coverage if it doesn’t meet their requirements, such as covering third-party liability or loss of use.
Understanding Excess Insurance
Excess insurance is an optional coverage that helps reduce out-of-pocket costs if something happens to the rental vehicle. Rental companies often charge high excess fees—sometimes over £1,000—for minor damages. With excess insurance, you can significantly reduce or eliminate these fees, providing peace of mind.
Should You Purchase Insurance from the Rental Company?
If your motor insurance or credit card doesn’t cover rental cars, purchasing insurance from the rental company is an option. However, it’s often more expensive than standalone policies. Rental companies typically offer Collision Damage Waiver (CDW), liability insurance, and Personal Accident Insurance (PAI), which provide comprehensive protection during your rental.
Be aware that some rental companies may not accept your personal motor insurance or credit card coverage if it doesn’t meet their requirements, such as covering third-party liability or loss of use. This is especially common when renting abroad or when renting high-end or exotic vehicles. In these cases, the rental company may require you to purchase their own insurance options to ensure adequate coverage.
For short-term rentals, explore our car rental options, which include insurance as standard. Alternatively, for longer-term flexibility, see our car subscription plans, where you can choose a plan with or without insurance, depending on your needs.
Frequently Asked Questions About Rental Car Insurance
Do I Need Rental Car Insurance if I Have Personal Motor Insurance?
Your personal motor insurance may cover rental cars, but it’s essential to check your policy details. You might still be liable for out-of-pocket expenses depending on your coverage limits and deductibles.
Does My Credit Card Provide Rental Car Insurance?
Many credit cards offer rental car insurance as a secondary coverage. However, always verify the specific details with your card issuer to ensure that you’re fully covered.
What is Excess Insurance and Do I Need It?
Excess insurance helps lower or eliminate the costs you’ll pay if the rental car is damaged or stolen. It’s especially useful when renting abroad, where excess fees can be very high.
What Insurance Should I Get When Renting a Car Abroad?
Most personal motor insurance policies don’t cover rentals abroad. If you’re traveling, consider purchasing international rental car insurance from a third-party provider or the rental company.
Can I Rely on Just My Credit Card Insurance?
Credit card insurance usually covers damage or theft of the rental vehicle but may not include liability or personal accident insurance. It’s important to review your card’s policy to understand what’s covered.