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Car hire advice

Car hire insurance

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Car hire insurance

Find out whether you really need an excess when sorting out car hire abroad, and get tips on finding the cheapest fuel.

 

If you rent a car you're bound to come across impenetrable terms covering the insurance you will need, such as excess waiver, CDW, SCDW, PAI or PEP.

It can be doubly difficult to know exactly what is being offered because different companies can use different terms to describe the same product.

Your choice boils down to two options. One is to buy cover from the company renting you the car, which limits the amount you will have to pay for repairs. This is often referred to as a Super Collision Damage Waiver (SCDW) and can be very expensive if you want to be sure you will not have to pay for any damage.

Our table below shows quotes we obtained from a selection of major car hire companies. The SCDW cost covers a week's rental in Spain. We included cover, where available, to protect the car's windscreen, undercarriage, roof and tyres, and reduced the excess to as close to zero as possible.

Car rental companies
Company Excess Liability before-after SCDW SCDW cost Windscreen covered? Undercarriage covered? Roof covered? Tyres covered?
Avis €1,200-0 £115 Yes No No Yes
Budget €1,200-0 £115 Yes No No Yes
Enterprise €800-€0 £107 Yes No No Yes
Europcar £588-0 £142-£149 Yes No No Yes
Hertz/Thrifty £1,021-0 £184 Yes Yes Yes Yes
Using the table: We obtained quotes for a week's car rental from Malaga airport in June 2017. We selected the combination of add-ons which reduced the excess to as near zero as possible, and included cover for damage to the windscreen, undercarriage, roof and tyres where available. The driver was a 45 year old renting a small car. Excess liability is shown in the currency in which it will be charged. Where SCDW cost is charged in Euros, we have converted to Pounds Sterling based on exchange rates at the day of purchase.

Excess reimbursement insurance (ERI)

Your other option is to forgo buying the SCDW cover and instead buy an insurance policy from a third party insurer. This is normally far cheaper, but if there is damage, you will have to pay for it first and then claim the money back.

The table below shows quotes and levels of cover from a selection of ERI companies.

Excess Reimbursement insurance companies
Insurer Policy limit per claim Policy limit per year 1 week premium Premium for annual policy
Big Blue £5,000 £5,000 £11 £37
Carhireexcess.com £5,000 £5,000 £11 £38
Bettersafe.com £6,000 £6,000 £12 £38
Insurefor £6,000 £6,000 £15 £37
MRL £6,000 £6,000 £16 £38
Leisure Guard £6,000 £6,000 £16 £39
Worldwideinsure.com £5,000 £5,000 £16 £41a
Reducemyexcess.co.uk £7,000 £7,000 £16 £42
Debenhams £6,000 £6,000 £16 £46
Voyagerinsurance.com £3,000 £3,000 £18 £44a
Questor insurance.co.uk £6,000 £6,000 £20 £42
Direct-carexcess.co.uk £6,000 £7,000 £20 £44
Fortify £6,000 £6,000 £20 £53
icarhireinsurance.com £6,000 £6,000 £21 £38
Essential Travel.co.uk £4,000 £5,000 £28 £39
Thomas cook £4,000 £5,000 £28 £39
Insurance4carhire.com £6,500 £6,500 n/a £40

Using the table: 1 week premium: for a 45 year old driver on a 7 day rental in Spain in late June 2017. Annual premium: For the same driver driving in Europe. The insurer's cheapest policy to meet our criteria was picked where a selection was available. All policies shown include cover for windscreen, undercarriage, roof and tyre damage and allow at least thirty days for drivers to submit a claim after an incident. All insurers also sell policies covering car hire in the UK. 'N/a' means the insurer only sells annual policies.

a - This policy doesn't cover hire in the UK - although the insurer offers alternative policies that do. 

Cutting through the jargon

To make your choice you'll need to understand the jargon. We explain what it all means in this guide. You can also see which companies are best at explaining these extra charges in our car hire company comparison.

Collision damage waiver (CDW)

This covers you against paying the full cost of repairing any damage to the car and is normally included in the rental price. When companies say the rental is all inclusive, what they mean is that it includes CDW.

However, CDW is not complete protection. All it means is that you will not have to pay the full cost of any repairs, but you will have to pay a contribution to repair costs up to an agreed level of 'excess' which can be as high as £2,000, regardless of who is at fault.

In addition, CDW generally does not cover certain areas of the car, such as the windscreen, tyres and the undercarriage.

You will not usually be covered for damage caused while you were breaching the rental agreement, or caused by negligence or using the wrong fuel.

Theft protection (TP)

This covers you against the full cost of replacing the vehicle if it is stolen while in your possession. Like CDW, this insurance is normally included in the price, and like CDW it does not cover everything.

For example thefts as a result of negligence, such as leaving the car keys in the ignition, will not be covered. And there will still be an excess to pay.

Super collision damage waiver (SCDW)

Most car hire companies will offer you the option of taking out an extra policy that will reduce your liability to a very small amount, or to zero. This is generally called super collision damage waiver (SCDW) but is also referred to as Super Cover or Damage Excess Waiver.

Costs vary depending on the company (typically around £10 to £12 per day for a small or compact car) and it can add a significant amount to your bill over a two week holiday.

As with regular CDW policies, the windows, tyres and the undercarriage may still be excluded.

Personal accident insurance (PAI)

You may also be offered extra cover for any injury to you or passengers while you are driving the car. However, this would normally be covered by your travel insurance.

In the same way, you may be offered cover for personal belongings in the car. This is known as personal effects protection (PEP). Again, this may be covered by your travel or home insurance.

Excess insurance - the best option?

This is another way of covering yourself against costs if the car is damaged or stolen. You don't buy it from the car hire company, but from a separate insurance company that may not be connected to the car hire company at all.

It is normally far cheaper than the excess waivers sold by car hire companies. It may also offer more complete coverage, for example covering damage to windscreens and tyres. You can buy a daily or annual policy.

If your car is damaged or stolen, you will have to pay the car hire company costs up to the level of the excess, which can be up to £2,000. However, you will then be able to claim that back from the insurer, and will get your money back, as long as your claim is accepted as valid.

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