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Understanding Car Rental Insurance Excesses

Standard Australian car rental contracts require the Renter to assume full responsibility for any loss of, damage to, or damage caused by the rented vehicle during the rental period, irrespective of how such damage or loss occurred. The Renter is also responsible for any loss of rental opportunity whilst vehicles are being repaired.

Rental car companies usually provide a means by which customers can limit this open-ended liability to something usually below $5,000. With us and many other car rental companies this is set up on the basis that provided there is compliance with our rental terms and conditions, our customers are automatically afforded the protection of our own fleet insurance policy, subject to our standard insurance excess (or “deductible” as some people know the term) usually stated as between $2,000 and $5,000, but the “fine print” can often disclose that you could unknowingly be liable for a lot more.

It is imperative that renters become aware of the “fine print” relevant to their obligations and reduction options.

A good rule of thumb is to determine how difficult it is to find out from the car rental website just what you might be up for and what it will cost to reduce your overall liability (not just some of it). If the information is hard to find or is expressed in a confusing manner, move on to another rental company.

On our website, we have a full page explaining your insurance options, including externally arranged cover. We let you know what exclusions there are and we relate it all to the interlinked issue of Security Bonds with another dedicated page. Our complete Terms and Conditions are also shown on a specific page.

It is vitally important for you to understand the “fine print” for each and every car rental company that you are contemplating using.

A $3,750 “standard” insurance excess (or whatever acronym they may use) is not a $3,750 liability limit and a reduction to $350 is not a full reduction if you learn in the fine print that there is no cover for hail damage, either no cover or a higher excess for “single vehicle accidents”, no cover or a higher excess for theft, no cover for interior damage and no cover for glass or tyre damage and that it is all "plus GST".

Think about what you might be up for if you hit an animal that suddenly runs in front of your car; someone bangs their face on the windscreen, breaks the screen and their nose and scatters blood all over the interior. (Single vehicle accident, glass damage, probably tyre damage, interior damage, plus GST) – even worse if it was a hail storm that drove the animal into your path.

With us, you could have a maximum liability of just $275 at a cost of $49.50 for a full week and only $2.50 per day thereafter. It’s called MaxiSafe.

I suggest that you always read the fine print and don’t be afraid to ask:
What happens with a Single Vehicle Accident?

What happens with Hail or Storm Damage?
What happens with Theft?
What happens with Interior Damage?
What happens with Water Damage?
What happens with Glass or Tyre Damage?

I know that I will never rent a car without knowing the answers to these questions.

It is also important for you to realise that you can’t create better cover by buying “Car Rental Insurance Excess Liability” insurance (however it is described), either as a stand-alone product (e.g. through RACV or your credit card) or as part of a travel insurance policy than is available through the car rental company.

It may well be cheaper than the car rental company’s offer, but if they exclude a certain item (as opposed to having a different liability limit); it will not be covered by your privately arranged protection. This is because the cover you buy is to indemnify you against your liability in respect of the insurance excess, not in respect of uninsured occurrences.

Rarely has the old adage of “Buyer Beware” been more appropriate than in the murky waters of many car rental insurance and liability arrangements.

Posted By darryl on Monday 7th November 2011 @ 19:40:51

Updated : Monday 7th November 2011 @ 19:40:51 | Words : 690 | Views : 1352 | Comments : 0

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