Understanding Car Hire Insurance
Many unhappy car rental stories stem from customers not realizing what they were protected for (the car rental companies don’t exactly make it easy), and end up having to pay for damages they didn’t think they had to.
So first things first – what do all those car hire insurance acronyms and confusing lingo mean? Understanding what you are getting will enable you to make the right decision of the level of coverage you need and are willing to pay for. These are the common terms and offerings you will find:
Standard Liability / Collision Damage Waiver (CDW) / Accident Damage Excess (ADE)
This is the standard limit of how much you will be liable to pay for in the event of damages to the rental car. If it was $3,000 and you completely totalled the car, you would only pay up to the maximum of this $3000 instead of the car’s total replacement cost.
This is the standard limit of how much you will be liable to pay for in the event of damages to the rental car. If it was $3,000 and you completely totalled the car, you would only pay up to the maximum of this $3000 instead of the car’s total replacement cost.
Excess Reduction (ER) / Liability Reduction Waiver (LRW) / Loss Damage Waiver Reduction
Optional: This allows you to reduce your standard liability to the specified amount e.g. from $3000 to $330. There may be options that include cover for the Windscreen, Headlights and Tyres (WHT) which is usually excluded with the Standard Liability
Optional: This allows you to reduce your standard liability to the specified amount e.g. from $3000 to $330. There may be options that include cover for the Windscreen, Headlights and Tyres (WHT) which is usually excluded with the Standard Liability
Full Protection Package / Maximum Cover
Optional: Reduces your liability to $0 and extends coverage to include damages to Windscreen, Headlights and Tyres (WHT)
Optional: Reduces your liability to $0 and extends coverage to include damages to Windscreen, Headlights and Tyres (WHT)
Single Vehicle Accident (SVA)
Optional: Extends cover to Single Vehicle Accidents (i.e. accidents not involving another vehicle, unless it is a parked vehicle). Basic rentals typically have higher excess amounts for SVA than the Standard Liabililty unless you take this option
Optional: Extends cover to Single Vehicle Accidents (i.e. accidents not involving another vehicle, unless it is a parked vehicle). Basic rentals typically have higher excess amounts for SVA than the Standard Liabililty unless you take this option
Windscreen Headlight and Tyre (WHT) Protection
Optional: Affords cover for “reasonable damage” to the windscreen, headlights and tyre puncture which is usually not covered by the Standard Liability
Optional: Affords cover for “reasonable damage” to the windscreen, headlights and tyre puncture which is usually not covered by the Standard Liability
Personal Effects and Baggage Insurance (PEB)
Optional: Covers the event your personal belongings contained in the car are lost or damaged. This is usually included with travel insurance.
Optional: Covers the event your personal belongings contained in the car are lost or damaged. This is usually included with travel insurance.
Personal Accident Insurance (PAI)
Optional: Covers the authorisied driver up to a certain limit in the event of death or permanent disability. This is usually included with travel insurance.
Optional: Covers the authorisied driver up to a certain limit in the event of death or permanent disability. This is usually included with travel insurance.
Once you are ready, be sure to find out how to bag yourself major savings with alternative car hire excess insurance options that give you better protection for a lot less!
Helpful stuff.
But car hire companies also fail to make clear the level of coverage within their basic policies. In particular they all provide cover for damage to third parties (people and property). AIUI they have to by law in Australia. But how much cover? Will it cover me if I kill your prize racing camel worth AUD 1 million? Or the Oscar-winning star of Skippy the Movie worth 10 million??
In the USA I buy one of the separate car hire excess insurance policies you point to (from Questor) with supplementary liability insurance to cover such third party liability. Do I need that in Aus please or can I run with the simpler cover for excess, tyres etc?
Robin: Yeah all these policies are hard to decipher! As a standard inclusion, the Big Boys (Avis, Budget, Europcar, Hertz, Thrifty) all do limit your liability in the event of “loss and/or damage to either the Vehicle and/or third party property” i.e. your liability will be capped at the specified standard waiver (about A$3,000, the exact amount of which varies with the company – see their terms and conditions.) There shouldn’t be any sneaky exceptions. Besides Skippy’s owner should have his own life insurance taken out on his roo.
So you can consider additional insurance for windscreen, tyres, single vehicle accident, etc. but you shouldn’t need supplimentary insurance for damaging third party property. Do double check when you’ve chosen a company as the finer details may vary with the exact location.
And please don’t run over Skippy.
Thank you for the insight as to how it is looked at.
Awww poor skippy.
I just finished writing a summary of the 3 car rental insurance options here….
http://www.vroomvroomvroom.com.au/insurance/
Might help some people.
In most cases the blame in on the insurance companies. They are not particularly clear on what is covered or not. A good case is a comprehensive cover that will cover damages to car and third party but not the owner of the car or his family. Extremely strange.