Does My Car Insurance Cover Me When I Hire a Car?
A few years ago, cover to drive other cars was a standard feature of most comprehensive car insurance policies. If, for example, you borrowed your neighbour’s car when your vehicle was in the garage, you would more than likely be covered by your own insurance. But rising claims costs have prompted many insurers to cut back on cover, and insurance to drive other cars is now the exception rather than the rule.
What comprehensive car insurance covers
Standard motor insurance usually covers only the car listed on the policy. So, if you buy cover for your Ford Focus, don’t assume you are insured if you take your friend’s BMW for a spin.
Some policies still automatically include cover to drive other cars, but it is likely to be limited. For example, your comprehensive policy will almost certainly cover you only for third party when you are behind the wheel of another vehicle. Cover to drive other cars also rarely extends abroad and hire cars are almost always excluded, whether you’re at home or overseas.
What you’re automatically covered for when you hire a car
Hire car cover varies by country and rental company. If you’re living in Europe, most car rental agreements include cover for damage, theft and third-party liability, so you don’t necessarily have to buy extra insurance when you hire a car. But the details of any cover/insurance vary according to the make and model of the hire car and the car rental company. To protect yourself from any nasty surprises, it’s always worth reading the terms and conditions so you’re clear on what’s included – and also clear on what’s not included and how limited the cover is.
Damage cover
Damage cover is usually known as Collision Damage Waiver (CDW). It means you have to pay only the ‘excess’ if there is any damage to certain parts of the hire car. It’s not technically insurance: the car rental firm simply waives its right to ask you to pay. But the excess works in exactly the same way as an insurance excess, although it is often higher. If, for example, the excess was £800 (about €900), you would have to pay the first £800 (about €900) of any damage repair bill.
What Collision Damage Waiver doesn’t cover
It’s worth remembering that Collision Damage Waiver does not normally cover damage to all parts of the car. The windscreen, roof and undercarriage are often excluded. If the windscreen was damaged, you would therefore be responsible for the whole repair bill, not just the excess.
You would also have to stump up the full cost if you damaged the car while in breach of the rental agreement, or indeed the law. So, if you pranged the car while driving over the speed limit, you would not be covered by Collision Damage Waiver. Most rental agreements do not include any damage done to the car if you fill up with the wrong fuel, so it’s worth being 100% clear which one your rental car takes.
Theft Protection and Third Party Liability
Theft Protection is a standard feature of most rental agreements and covers the driver in case the hire car is stolen. Again, an excess applies and you also have to abide by the law and the rental agreement.
The jargon can be confusing – and to make it even more baffling, some rental agreements refer to Loss Damage Waiver, which is a combination of Collision Damage Waiver and Theft Protection.
Third party liability is a legal requirement and covers you for any damage or injury to another person or their property. It is the equivalent to third party insurance in the UK and does not include death or injury to the driver of the rental car. It also doesn’t cover damages to the rental car, as that’s covered by the Collision Damage Waiver.
Buying ‘comprehensive’ hire car cover
You can choose to boost the level of standard cover so it is roughly the equivalent of a comprehensive insurance policy – for a fee. You can do this when you book the car, before you travel, or from the rental company when you arrive at the rental counter to pick up the car.
At the rental counter you might also be offered personal effects insurance, which covers your personal belongings in the car. Personal accident insurance is another common addition to standard car rental cover. It insures the driver in case of personal injury.
Before you buy any extras, it’s worth checking whether your home contents or travel insurance covers your personal belongings outside the home. Travel insurance policies also usually include cover in case of injury while you are on holiday.
Protecting your excess
You might also be offered Super Collision Damage Waiver, or Damage Excess Waiver, which reduces the excess to zero, or a very small amount. The costs and terms vary, so it’s worth checking out exactly what you will get for your money.
You can also buy car hire excess insurance independently, before you pick up the hire car. It is often cheaper and it might also include any damage to the windscreen, tyres, roof and undercarriage. However, it’s worth bearing in mind that if you buy a standalone policy, you will have to pay the excess to the car rental firm and then claim it back from the insurer.
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