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Car Hire Insurance Explained

Cars stopped at traffic lights in London

There is a lot of options when it comes to car hire insurance and excess reduction. Even if you have rented a car before, it can be difficult to work out the inclusions and exclusions when you are purchasing an insurance or excess reduction product. VroomVroomVroom has put together a quick guide to help you navigate the car rental insurance process.

What is the car rental excess?

When you hire a car in the UK, you will be liable to pay a specified excess amount if any damage is caused to the vehicle while it is in your possession. This amount can be up to £2000 for standard vehicles, and even more for larger SUVs and prestige vehicles. The excess amount for your particular car will be specified in the car rental agreement. The amount varies based on which car rental company you are hiring the vehicle from. 

As an example, if you were to hire a car with a vehicle excess of £2000, this means you would be liable to pay up to that amount for any damage. The car rental company will pay any costs incurred above £2000. 

Third-party travel insurance

This is one option you have to protect yourself against the financial liability amount. Whether your existing travel insurance policy covers rental vehicles, or if you are taking out a specialized rental vehicle excess insurance policy, this is considered third-party insurance. Here are some features of third-party travel insurance:

  • Travel insurance policies normally cover your rental vehicle up to a specified amount. It is important to check your policy against your car rental agreement and make sure your policy covers you for the full cost of the vehicle excess. 
  • If you are charged for any damage, you will still have to pay the full amount at the rental counter. You make a claim afterwards to seek reimbursement for the payment. You must meet the conditions of your travel insurance policy, and must not have violated any conditions in the car rental agreement. 
  • When using additional drivers, make sure everyone has proper travel insurance. In some cases, travel insurance policies only cover a single person at a time. 

Purchasing excess reduction products from the car hire company

The car rental company offers you a choice of excess reduction products when you pick up your car. These products offer different levels of protection, and can reduce your excess amount and protect you from paying damage fees. However, you must meet the terms and conditions of the car rental agreement. 
  • This is an easy way to reduce the excess amount on your rental car, as you can purchase it at the time of pick-up. However, it is also one of the most expensive ways to insure your vehicle. You will pay a charge per day to reduce the excess amount, which can add up if you are hiring the car for a longer period of time.
  • Note that excess reduction is not the same as travel insurance, and will not insure the contents of your vehicle (luggage and valuable items). 
  • Different car rental companies will charge varying rates for their excess reduction products.

What happens if I choose not to reduce the excess on my hire car?

If you do not chose to pre-purchase travel insurance or any excess reduction products at the rental desk, you will be liable to pay for the full excess amount in the event of any damage. The car rental company will determine the cost of the repairs, and charge your credit card. 


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