What Insurance Do I Need When Hiring a Car?

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One of the most common questions asked in the travel industry is “What insurance do I need when hiring a rental car?”

Because car rental companies have been competing so fiercely in recent years, the relative cost of hiring a rental car has dropped, so in order to continue to turn a profit these companies have had to increase excess charges and make it so that other things (such as tyre damage, scratch removal and window repairs) are not automatically covered.

The result is that excess charges are high and things like towing charges, damage to tyres and window repairs are excluded from cover in order to sell expensive top-up insurance when collecting the car.

Gill Charlton (from the Telegraph) responds to this question:

“You must have Collision Damage Waiver (CDW) – sometimes called Loss Damage Waiver (LDW) – and Theft Protection (TP). These aren’t strictly speaking insurances but waivers which limit the customer’s liability if the car is damaged or stolen.”

“However, there is often an excess involved. This can be as high as £1,500. You can usually reduce this to zero by buying ‘Super CDW’. Car rental desks charge as much as £15 per day for this cover.”

It is often stated that your home car insurance (or your credit card) will automatically ensure you for certain expenses when driving a rental car. This is typically for personal injuries:

Another expensive insurance touted at car rental desks is Personal Accident Insurance (PAI) which pays out if you are severly injured or die in an accident in a hired car. You are probably covered by your travel insurance policy or through the credit card used to pay for the rental but you must check this.

Source: Telegraph


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  3. A Complete Travel Insurance Guide
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