Rental car insurance – what types are there

Rental car insurance – what types are there?

When concluding a contract, the rental company itself can offer you several insurance options, differing in terms and price. Most likely, when registering, you will come across the following terms:

Collision Damage Waiver (CDW) – this is insurance of the car itself against damage that may be caused to it due to your fault. Something like CASCO, familiar to all Russian motorists, can sometimes also be called Loss Damage Waiver (LDW). This type of insurance is inextricably linked with the notorious concept of "deductible", which is so much talked about on all tourist forums (and which we will talk about below), although in fact, a deductible takes place in all these cases. The main type of insurance.

Theft Insurance (TI) or Theft Protection (TP) – as the name suggests, insurance against theft. Not the most popular service when traveling to Switzerland or Iceland, but by no means unnecessary in less safe countries.

Personal Accident Insurance – this insurance covers the damage that you yourself may incur in an accident. That is, a kind of medical insurance. Of course, travelers usually have medical insurance anyway – but it makes sense to compare the terms of the existing one with the ones offered. Perhaps PAI will be useful to you.

Third Party Liability Insurance (TPL) – in fact, the usual MTPL, that is, insurance of cars of third parties that suffered due to your fault.

In any case, the key point of the rent-a-car insurance itself is CDW, and the most important aspect of CDW is the notorious “franchise”. What is it? Let's figure it out.

Franchise or “all inclusive”?

Car rental at favorable prices - 300*250 Franchise, in simple terms, is a limitation of your liability. It is equal to the maximum amount that you will pay in the event of an insured event. Anything that comes out above this amount is paid by the insurance company. The average franchise size is 800 euros, although it can vary significantly in one direction or another. Somewhere you will be offered a tariff with a franchise of 350 euros, somewhere they will ask for all 2000.

There are also insurance options without any franchise - the so-called "full insurance", under which 100% of the costs of an insured event are assumed by the company. Usually, such a scheme is called Super CDW (SCDW), Full Collision Damage Waiver (FDW, FDCW), or quite simply - SuperCover.

Naturally, such insurance will cost much more than usual. Obviously, the franchise is most significant in the context of CDW - in the event of a car theft, such an amount is no longer too important.

A franchise is good if you are very confident in yourself: you will pay very little money for insurance, and if nothing happens to the car, you will save a lot. But in case of an accident, you will have to fork out, because with a franchise, the insurance company will only pay for serious damage in excess of your liability amount. You will have to pay for minor damage, despite the fact that you seem to have insurance.

By the way, since we are talking about minor damage, keep in mind that insurance does not always cover headlights and, especially, wheels. Often, this turns out to be an additional paid (albeit inexpensive) option. It is up to you to decide what to do; many people consider insurance a waste of money if nothing bad happens. And it is a completely different story if something does happen.

“Super insurance” is often chosen by drivers with little experience, or in cases where the trip is expected in rather difficult conditions. The pleasure is very expensive, and it is not even a matter of absolute values, but the fact that with a fairly long rental, such insurance eats up too much of the total amount. Therefore, those who plan to rent a car for a fairly long period, and do not want to deal with a franchise, should consider another option - which we will talk about a little later.

There is another interesting point: the possibility of returning the franchise (Refundable Excess). In this case, in the event of an accident or other incident, of course, the money will be immediately withheld from you within the franchise - but later it will be returned (in the case of you strictly following the entire formal procedure - pay attention to the rules of your company).

Previously, to arrange this service, you had to contact a third-party insurance company, but now both rent-a-car and brokers almost always offer a franchise refund. As a result, you risk not losing money, but only parting with it for a while - a big argument in favor of cheaper insurance.

Is there an alternative to what rent-a-car offers?

Although at first glance it seems that the system is ideal, quite a lot of clients of rental companies refuse to take out full insurance from rent-a-car. Instead, they go to third-party insurance companies and sign contracts with them.

Third-party companies offer coverage of the deductible or your liability, which is not covered by the rent-a-car insurance. That is, without insuranceki from rent-a-car you will first have to pay, but then you will get the money back from a third-party insurance company. It would seem, what's the point if you can get the deductible back anyway? There is a point.

Firstly, such insurance is issued not for the car, but for the driver. That is, you can issue it for a certain period of time, for example, for a year - and use it, renting different cars from different companies.

Secondly, insurance from third-party companies covers a much larger number of insurance cases and expenses than regular insurance from rent-a-car. For example, loss of car keys, or its evacuation. This already becomes much calmer.

Thirdly, such insurance is very inexpensive - barely more than 50 euros per year. It is not at all expensive to issue it, and spend much less nerves. And with a long-term rental (say, for a month), the savings become obvious.

Now - about the bad. Not all such companies work with citizens of the former USSR - in particular, the leader of this industry, Insurance4carhire.com, does not work. Fortunately, this (certainly worthy) company has alternatives in Europe. The two most obvious are the British companies

http://worldwideinsure.com and questor-insurance.co.uk, both have positive reviews on the RuNet.

There are other disadvantages - in the event of an insured event, you will have to do a lot of paperwork (however, to be fair - the same applies to the return of the franchise under the usual CDW). In

after all, the money will be returned only in case of strict compliance with the procedure established by the insurer. For example, if you do not provide the necessary documents concerning your accident from the police - nothing will come of it. Moreover, you will have no more than 30 days to collect the documents, and you must report the occurrence of an insured event immediately.

It's up to you
Attitude to insurance is a personal matter: some prefer to overpay for peace of mind, others are confident and want to save money. Many change their minds with experience.

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