Car hire insurance dilemma explained

When you rent a car, you pay for a daily rate which should have collision damage waiver (CDW) and theft insurance included. This standard insurance would always carry an excess or self-risk. This means that in the event of an accident, the driver is charged an amount of money to cover the amount of the estimated damages up to the excess amount. Whatever the damage cost is, the driver’s liability will not exceed the amount of the excess. The excess amount will vary from one rental company to another and will need to be paid whether it is the drivers’ fault or not.

Most people will want that extra piece of mind and opt to cover the excess amount as well. A frequent question that arises when renting a car is whether to opt to buy the extra insurance directly with the car rental company by paying a supplement daily charge on top of the daily car hire rate or else cover the excess through a third party insurance company. Certain credit cards offer additional insurance protection as well however this usually would still carry an excess.

While buying a separate insurance through a third party may be cheaper, most of the time this will lead to greater hassles as well.  In case of an accident, the driver will need to pay the damage costs, up to the excess amount, to the car rental company if the additional insurance was not purchased through the car hire firm.  The driver, in order to be able to claim it from the third party insurance company from which the full CDW insurance was purchased, would then need to request several documentation to support the claim such as a copy of the damage or police report, photo of the damages and a copy of the repair costs and amount paid to the car rental company. Some third-party insurance companies are not reliable and reputable and could complicate the process by requesting documentation which is not easily provided, thus resulting in a very complicated claim process. The policy provided might also not cover everything in any case.

Purchasing the extra insurance directly with your rental company will prove to be a much more hassle-free experience and in the event of an accident, your car rental company will deal with all the work which you do not want to get involved into.

It is important to note that CDW insurance will never cover the driver if he or she does not stick to the rules of the rental agreement. CDW insurance normally does not cover mirrors, windows, wheels, ripped tyres, personal belongings and the interior of the hired car for example.

It is best to try to find a car rental company with low insurance excess (less than EUR 500.00) and that it gives the option to cover this amount without charging exorbitant amounts. Mayjo car rentals in Gozo, Malta, is one such company.  The CDW offered for a car which is not a minivan or a jeep, carry an excess of only EUR 350.00 which can be covered by paying a daily charge of only EUR 6.00 (if the car is rented for a minimum of 6 days).