Navigating the Car Rental Insurance Maze

Navigating the Car Rental Insurance Maze

When you hire any type of vehicle, the company that hires it to you expects to get it back in the same condition that it left the yard in. If that vehicle is damaged, whether it’s your fault or another driver’s, then the car rental company is going to look to you to pay for the damages. Basic insurance is included in the hiring of all vehicles, whether it’s a cheap car hire business, or a major corporation.

As the hirer, you will be expected to meet any form of excess, and this is usually quite high unless you opt for an enhanced insurance package which adds more to the cost of hiring the vehicle. It’s also worth checking if your regular car insurance policy covers you when driving a hire car.

The basics

When you hire a car there is almost always some form of insurance included in the initial cost of renting the vehicle. What many people fail to realise is that it comes with a high excess – usually in the thousands of dollars – which the hirer will be required to pay in the event of any damage. Sometimes an enhanced insurance policy is already factored into the initial quote though, making the hiring of the car more expensive. It pays to read the fine print before committing, because this extra insurance can be declined, resulting in a cheaper price for the car.

car rental

Extra insurance

What many car hire companies offer you when picking up the vehicle is an enhanced insurance policy that in essence reduces the excess you have to pay in the event of any claims. There are often different levels of insurance as well that will affect the excess and overall cost of hiring the car, along with the situations it covers you in. Obviously if you waive any of this extra insurance then the cost of hiring the car is going to be cheaper. But if you damage the car then you can be left with a big hole in your wallet. Another insurance you may come across is personal insurance, which covers any items stolen from the vehicle.

Do I really need the extra insurance?

That is really a question that only you can answer. If you have had a few bingles in your time then perhaps some form of extra insurance would be worthwhile. Extra insurance while driving in another country should also be considered, especially if there are unfamiliar conditions such as driving on the opposite side of the road.

In most cases, particularly if you are hiring a car in Australia, people decline the extra insurance as it does keep the cost down – the extra insurance is usually calculated per day. The hire car company may also make some form of extra insurance compulsory in certain conditions, such as travelling off the beaten track or in snow conditions using chains.

Read the fine print

As with any contract, it pays to ready the fine print to see exactly what you are covered for. Car hire companies are likely to differ with the premiums, excess payments and what is included in any policy, so shopping around is always a good idea to help you get the best price and the conditions that suit your situation.

What to do if you are in a crash

If you do find yourself in an accident, contact your hire car company immediately. They will inform you what to do next and advise on the best course of action. Most car rental firms include a form of roadside assistance in the cost of hiring a vehicle so you may be required to call them also.

As long as you do your research and always read the fine print before signing on the dotted line, you should never have any problems hiring a vehicle, whether you are here, or overseas.

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