When you hire a car, it’s best to get car hire insurance. This guide covers where to buy insurance from, what type of coverage to get, and what those policies cover.
Do I need car hire insurance?
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.
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.
How can I get the cheapest insurance for car hire?
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, your existing car insurance policy or any coverage included in your credit card agreement are all ways to save money. So make sure to check these out prior to booking!
What does car hire insurance cover?
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:
Those are the 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? If your personal belongings are stolen from a hire car? If you get into an accident with someone who’s not insured themselves? Well, there are policies that cover each of these situations too.
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.
What type of insurance for car hire should I get?
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.
Car hire insurance in the UK
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.
The different insurances for car hire in Europe
When hiring a car and travelling throughout Europe, you will find that some insurance policies might already be included in your contract. This is usually the case with 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.
Car rental insurance in the US
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.
Frequent questions about car hire insurance
It depends on a lot of factors and 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 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.
Hire car insurance is available directly from car hire companies. 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.
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. It provides coverage in case your vehicle is damaged or stolen during the period of your rental.
Collision Damage Waiver (CDW) protects the hire car against damage, theft, or accidents. The level of protection can vary depending on the insured amount and scenarios covered. Learn more
