.png){kind=spacer}
When travelling in a rental vehicle, it's important that you have proper cover when things go wrong. However, trying to understand what kind of insurance you actually need to buy can be perplexing.
In this guide, we'll explore whether you really need car rental insurance coverage and how to find the best cover for you.
Key takeaways
- Rental companies typically must automatically include a minimum level of third party liability coverage to cover damage done to other people and property.
- They must also include Collision Damage Waivers. You can build on this coverage with third party providers like RentalCover which includes car rental excess insurance, cover for items your rental company may exclude and more.
- Going above and beyond the legal minimum helps to ensure that you're financially covered if things go wrong while renting a vehicle.
- They must also include Collision Damage Waivers. You can build on this coverage with third party providers like RentalCover which includes car rental excess insurance, cover for items your rental company may exclude and more.
Is rental car insurance necessary when hiring a vehicle?
Yes, some level of rental car insurance is necessary when hiring a vehicle. However, outside of Canada and the United States, this cover is generally automatically supplied by your rental company and factored into the cost of your cover.
Here's how it breaks down:
- Third party liability insurance: You must have a minimum level of third party liability insurance which provides cover for damage done to other people and property. Outside of Canada and the United States, this cover is generally provided by your rental company. However, this can differ from one country to another.
- Collision Damage Waivers (CDWs): Collision Damage Waivers are policies transferring the liability for damage of a rental vehicle from you to the rental car company, at a cost. Like third party insurance, this cover is generally automatically factored into the cost of your rental vehicle.
Other cover: To travel with peace of mind, you might want to purchase additional cover. Some car rental companies offer policies known as Super Collision Damage Waivers. However, alternative providers RentalCover offer more comprehensive cover that's also 50% cheaper than the rental companies†. This car rental excess insurance is extremely valuable, helping you avoid large out-of-pocket costs on your next trip.
Does my personal auto insurance policy cover rental vehicles?
In some cases, a comprehensive personal car insurance policy may offer some level of cover for rental vehicles. Check your own policy and get in touch with your insurer if you aren't sure.
Keep in mind that any cover you do have may have coverage limits that are too low to offer true protection when renting a vehicle.
Does my credit card provide rental car insurance?
Rental car insurance is a common benefit of many different credit cards. If you're unsure, you can often find information online or by contacting your credit card supplier directly.
Credit card insurance is usually secondary coverage. This means you generally must file a claim with a “primary insurer” when an incident occurs. (Your primary insurer is often your personal car insurance.)
Then, you can file a claim with your credit card provider to receive further cover. In contrast, RentalCover works directly with car rental companies to settle claims, with 98% of claims paid out within 3 days.
What are the benefits of hire car insurance?
Comprehensive hire car insurance policies offered by providers like RentalCover mean you get to enjoy the following benefits:
- No excess: With our car rental excess insurance, there's nothing for you to pay in the event of a claim. We also cover fees relating to towing and loss of use.
- Cover for a wide range of incidents: If your car hire insurance doesn't exceed the minimum legal standards, you may not be covered for a wide range of things that can go wrong on your travels. With more comprehensive cover, you can travel with true peace of mind, knowing you're covered for keys, underbody damage and more.
- Multiple drivers: Our policies cover all listed drivers on your rental agreement at no extra cost, so you don't need to stress about who's behind the wheel.
What does hire car insurance typically exclude?
If you rely on cover provided by rental companies and credit cards, you might find yourself facing a lengthy list of exclusions, such as:
- Multiple vehicle accidents.
- Fire and theft.
- Vandalism.
- Towing.
- Lockouts.
- Keys.
- Windscreens.
- Headlights.
- Tires.
- Underbody damage.
If you choose a RentalCover policy, you'll be covered for all of these incidents.
Cover your rental vehicle with RentalCover
Say "no" to hard sells at the rental desk when you choose a RentalCover policy. Our coverage is 50% cheaper than what the rental companies offer while also being more comprehensive†.
We allow you to travel with more peace of mind knowing there's nothing for you to pay in the event of an incident. Get your instant quote today and see how we can elevate your next hire car experience.
Hear from our rental car insurance expert
When you hire a car, it's generally worth going beyond the basic insurance included with your rental and getting additional cover.
For example, getting a policy with RentalCover means you can enjoy more comprehensive cover while paying less than what rental companies charge. You can travel in comfort, knowing you won't face a massive excess if things go wrong
Frequently asked questions
Do I need rental car excess insurance?
Rental car excess insurance can be extremely valuable when you're travelling. Policies offered by rental companies can come with significant excess charges when you need to make a claim.
By purchasing a RentalCover policy, there's no excess for you to pay in the event of an incident. This can ultimately save you a significant sum when hiring a rental car.
What is Third Party Insurance?
Third party insurance is cover for injuries caused to other people or damage caused to other people's property. Outside of Canada and the United States, rental companies are generally legally required to provide this cover on all vehicles.
As such, RentalCover does not offer third party insurance coverage outside of Canada and the United States.
What is a Collision Damage Waiver?
A Collision Damage Waiver (or Loss Damage Waiver) is a type of car insurance that reduces your liability for damages to a rental vehicle if it is damaged or stolen.
A CDW is a waiver that transfers the risk of financial loss for damages like towing and administrative fees to the rental company. CDWs often come with high excess costs.
Outside of the United States and Canada, CDWs are typically included in the basic cost of your car rental.
How can I ensure I'm fully protected with rental car insurance?
Here are a few tips to ensure you have the best possible cover when renting a vehicle:
- Consider your options: Don't fall for hard sells at the rental desk. Make sure you weigh up the cover offered by your rental company against alternatives like RentalCover.
- Understand your coverage: Make sure you fully understand exactly what you're covered for. Don't get tripped up by unexpected exclusions or coverage limits.
- Primary vs secondary coverage: If you're relying on credit card car rental insurance, you likely have secondary coverage. This means that in the event of a claim, you'll need to file a claim with your personal insurance, which is crucial to keep in mind in case of an incident.
- Document your vehicle: Make a complete record of the state of your rental vehicle at pick-up using photos and videos. Ensure you're on the same page as your rental company with regard to the vehicle condition.
Should you buy insurance from car rental companies?
Insurance from car rental companies can often come with significant drawbacks, including:
- A long list of exclusions.
- High excess costs in the event of an incident.
- Confusing options of multiple policies.
The most important thing is not to choose rental company insurance simply because it's hard sold at the rental desk. Do your research ahead of time and consider alternatives that might be better for you.
What should I do in the event of a claim?
Filing a claim for a covered incident in a rental car depends on the type of coverage you have. If you have purchased insurance from the rental company, they'll usually handle it internally, charging you excess as well as any associated fees.
If your cover comes from a different source, like a credit card, you usually need to file a claim with other relevant insurance providers before being eventually reimbursed by your credit card.
For RentalCover customers, we process your payout after you are charged by your rental company and you submit an online claim. We’ll ask you to provide relevant documents like a copy of your rental vehicle agreement, a photo of your driver’s license, a repair invoice and any other evidence we require.
We may also have a few follow-up questions to ask you before organising your reimbursement.