The short answer is: yes, you definitely need it! The tricky part is knowing what type of insurance you need, where to get it, and what different policies cover.
There are many different types of rental car insurance coverage. Deciding which one to take depends on the level of protection you would like to obtain; some cover only the vehicle you have hired, others also cover injuries or damage caused to others or to yourself and your passengers.
The car hire company you select will clearly mention in their terms and conditions which type of insurance is mandatory according to their own policy and local legislation. Keep in mind that car hire companies tend to recommend additional coverage, so determining what is necessary and what is extra in advance can help you choose what is best for you.
If you’re looking for budget-friendly options, make sure to verify the coverage of the insurance policies you already have to potentially save money. For example, go through your own car insurance, your personal insurance or the car rental insurance benefits included in your credit card, and check if any of those are compatible with the requirements of the car hire company you selected.
Getting full insurance directly from the car hire company can be expensive, so if you want to find the best deal, it helps to plan ahead and shop around.
You can find independent car hire insurance brokers that offer various insurance levels, including monthly and annual policies for those who travel and need to hire a car frequently, whether in the UK or Europe. Another way to save is to secure car hire excess insurance through a third party.
Travel insurance obtained for travel through Europe, your existing car insurance policy or any coverage offered as part of your credit card agreement are all ways to save money, so make sure to check these out prior to booking.
Insurance coverage tends to have a location and circumstance limitation. Make sure you check the regions where your coverage applies and what specific circumstances are or aren’t covered. The insurance you have could only cover you if you’re driving in your country of residence; also, most insurance companies won’t cover accidents where the driver has consumed alcohol above the local limit.
Car hire insurance typically covers three basic things – damage, theft, and third party liability. Here is a breakdown of your options:
A CDW covers damage to the hire car’s bodywork, which is most of the car’s exterior, including the bumpers, wings, doors, etc. Keep in mind that this doesn’t include the windows, wheels, or the interior. The most you’d have to pay in the event of damage sustained is called an excess and is usually specified in your policy, so be sure to look there. Learn more
Theft Protection means you won’t have to pay for a new vehicle if the hire car gets stolen or is damaged if someone tries to steal it. Again, the most you’d have to pay is the excess specified in the Theft Protection policy.
A Loss Damage Waiver is the collective term for both CDW and TP policies. It means that you are protected in the event that the car is stolen and for any subsequently occurring damages as well as the replacement of the vehicle. The excess for LDW policies is usually higher than it is for CDW policies, but if you are worried about excess payments, note the Car Hire Excess insurance below.
Third Party Liability insurance ensures you are covered for death, damage or injury of a third party in an accident you are liable for. There’s usually a maximum amount that this policy would pay out to the third party, so make sure you check your policy.
Those are the three basic types of coverage, but there are several things that additional policies would also cover. What happens if you get injured in a hire car? What happens if your personal belongings are stolen from a hire car? What happens if you get into an accident with someone who’s not insured themselves? Well, there are policies that cover each of these situations too.
Excess insurance covers any excess charges that you might need to pay in the event that your hire car is damaged or stolen. This is an optional insurance, but it can save you a lot of money, as some car hire companies have high excess amounts. Learn more
Supplemental Liability Insurance is an optional and supplementary insurance policy that offers more extensive protection in the event of a third party liability. Bear in mind that this insurance may indeed be part of your policy already, as is the case in many European countries. In the US and Canada, however, you may need to double check prior to booking.
Personal Insurance covers the driver or the policy holder. It can cover expenses in the event of an accident, like ambulance transportation and similar costs that stem from medical assistance. Likewise, the driver’s belongings can be covered using a Personal Effects insurance in the case of theft or loss.
Accidents happen… flat tires, mechanical or electrical malfunctions, etc. If you’re not sure how to get your rental car back on the road, you may want to look into getting this type of insurance.
The list we have put together for you above is non-exhaustive, and there are other policies available to you as and when you request them. If you are travelling to a country where the driving conditions are slightly more treacherous than they would be in the UK, maybe ask the hiring company before you arrive what type of additional insurance policies are recommended. In Iceland, for example, there are terrain-specific insurance policies that are imperative to ensure a safe journey on some routes. For more information on this subject, please see our article on hiring a car for different terrains and climates.
While all car hire insurance policies are important, some are truly indispensable and will save you a lot of trouble in the event of an incident. A must-have is Third Party Liability Insurance, which covers damage done to other people or their properties. Another policy that you are strongly advised to add is the Collision Damage Waiver, which covers you in case of damages to the car. Make sure you ask about the Excess involved when adding a policy, and if the amount is particularly high, you can get Car Hire Excess Insurance to cover that. Additional insurance worth considering is Roadside Assistance, especially if you are in a foreign country, and Personal Accident Insurance, which covers your personal expenses in the case of an accident. When choosing which policies to add, take into consideration the roads you’ll be driving on as well as the climate, as rough terrain might require a higher level of insurance coverage.
When hiring a car in the UK, the insurance policies you will be offered are similar to those in the rest of Europe or the US. The main thing to note is that Liability Insurance is the only policy that is legally mandatory to have. Collision Damage Waiver is not a legal requirement but is often included and highly advisable.
When hiring a car and travelling throughout Europe, you will find that some insurance policies might already be included in your contract such as Collision Damage Waiver, Third Party Liability and Theft Protection. Some of these will include an excess, and if you want to reduce it to zero, consider taking out an Excess Waiver policy. However, make sure you read the fine print in regards to what it does and does not cover. If you are planning to travel around Europe and cross borders with your car, it is important to double check the car hire policy and ensure that you have coverage in all the countries you will be visiting.
When travelling to the US, each state might have a different law as to which insurance is required and which is not, but overall, the three main types of insurance that you should have in all cases are Third Party Liability Insurance, which is a requirement, Collision Damage Waiver (CDW) or a Loss Damage Waiver (LDW). Note that the latter comprises both CDW and Theft Protection, which means you are covered if the vehicle is stolen and for damages sustained during your hire period as a result of theft.
In the end, “how much car hire insurance is” depends on a lot of factors that depend on your desired level of coverage. Insurance policies typically cover expenses up to a certain amount and payment is either covered by the insurance company on the spot or refunded to the policyholder after an investigation has concluded.
Carefully reading the terms and conditions of your car hire agreement and comparing your insurance options is the best way to save time and money, so that you can enjoy a hassle-free trip feeling safe and protected.
Car hire excess insurance protects you from having to pay high amounts of excess as a result of damage or an incident to your hire car.
Zero excess car hire is when your car hire insurance includes zero excess for bodywork damage or theft. Some elements may be excluded from the zero excess coverage such as damage to windscreens and tyres.
Car hire excess insurance is available through car hire companies and third party insurance providers, who might offer a better deal. If you are booking travel insurance for your trip abroad, car hire excess might be included in the policy, while if you are hiring a car locally, double check your regular car insurance policy, as it may also include hire car excess insurance.
Hire car insurance is available directly from car hire companies, but you can also get it through third parties such as car hire insurance brokers that offer more policy options.
When looking for the right car hire insurance for driving abroad, make sure you include Third Party Liability Insurance and Collision Damage Waiver as the very basic requirements. Make sure you also consider the roads you’ll be driving on and the weather conditions to judge whether you’ll need stronger coverage.
There are many types of car hire insurance in the US, some of which include coverage for damage to the car itself, such as the Collision Damage Waiver and Theft Protection Insurance. Others include coverage for third parties like Supplemental Liability Insurance, or personal coverage for yourself such as Personal Accident Insurance.
Supplemental Liability Insurance, or SLI, covers damage caused to others, be it their vehicle, belongings, or injuries.
A Loss Damage Waiver, or LDW, is an optional insurance policy that provides coverage in case your vehicle is damaged or stolen during the period of your rental.