What is Excess Cover? Rental Car Insurance Explained

Planning to book a rental car for your next holiday but still unsure about how rental car insurance or excess cover works? Read on to find out.

Rental car insurance helps cover the cost of damage to a rental vehicle. The last thing you want to worry about while on holidays is having to pay for the cost of a dent or minor scratches left on your rental vehicle. The good thing is that there are a number of rental car insurance products that can help to reduce the cost of such damage, no matter how big or small. One such product is excess cover. Sometimes called Loss Damage Waiver (LDW) or Collision Damage Waiver (CDW), this is the amount that you agree to pay to cover the cost of damage up to an agreed amount. What the excess is and the amount it covers will depend on the company you purchase your policy from, your country of residence and destination.

You can purchase rental car insurance at the rental car company as an additional cost to your rental vehicle or purchase it as a standalone policy from RentalCover.com. 

How Much Will Rental Car Insurance Cost?

For only a few extra dollars a day you can get full coverage with RentalCover.com. When you rent a car in most countries, the default insurance you’re offered will have an extremely high excess often in the thousands. You can be are liable for this amount if any damage is done to the car (or they report that damage has been done to the car).

Rental car company vs standalone rental car insurance

Some of the most popular rental car insurance companies can offer additional insurance anywhere between $19-$37 per day. Depending on the company, the coverage can vary wildly often excluding those important things like keys, windscreens, tires and underbody damage

On the other hand, RentalCover.com offers insurance which gives you much greater coverage for around $7-16 and has no excess depending on the country you are in.

Is it worth getting rental car insurance?

Purchasing rental car insurance is optional, however in the event of something going wrong, the cost of repairs might leave you out of pocket -- if you avoid any insurance you can be deep, deep out of pocket in the thousands! In such cases, it pays to spend money upfront on excess coverage, LDW or CDW. These products effectively keep the cost of damage to a manageable amount.

Things to watch out for is any exclusions that the rental desk often has (RentalCover has no exclusions!) these can include tyres, keys, windscreen, underbody. You also want to check what your excess, liability or deductable might be even with the insurance and if there are any other fees if you do damage the car. Such fees can include admin fees to process the repair and demuring fees (the daily rate of the car while its off the road).

What does RentalCover.com cover?

RentalCover.com covers this excess along with any administration fees or other fees that rental companies may charge including:

  • Flat tyres, cracked windshields, damaged headlights, lost keys, and towing.
  • Sky-high fees added to your repair bill, such as an administrative fee, loss of use fee and credit card fees.
  • Complete coverage for all authorised drivers (such as your spouse), even if they aren’t listed on the rental agreement.
  • Rentals for more than 30 days.

Three reasons to get rental car insurance from RentalCover.com

  1. We beat any price. Our policies are about 50% cheaper than what’s offered at the rental desk. Take a look at our comparison of the savings you could make with our car rental insurance below.
  2. We provide cover more. RentalCover.com also provides more coverage than the default insurance offered at rental car companies.
  3. No hidden fees and no claim fees. The cost of fees in case of an accident could certainly add up. If you’re not careful, you could end up spending more than the cost to hire the car! Take out a policy with RentalCover.com and avoid fees, excess, other add- ons.
Case study: Customer pays up to eight types of administration fees at the rental desk
A customer found they were charged for up to eight types of administration fees on top of the cost to rent their vehicle. The total bill came to $AUD 6834.80 for a 30 day trip. Cost to hire the car? $34.84 per day. Cost of miscellaneous administration fees? $AUD 5789.60.
car-rental-insurance-compared

What is CDW and LDW?

CDW and LDW is usually included in the rate that you see on a website. Note that these “waivers” just reduce your excess from a high amount (similar to the full value of the car) to somewhere between €/$/£1500 and €/$/£3000 depending on the car and the rental company. The reduced excess may still exceed €/$/£10,000 for some high-end sports car rentals, mainly in France.
 
CDW policies typically exclude windscreen and tyre repairs, as well as undercarriage, roof, interior, window and side mirror damage. The renter will be liable for the full cost of those repairs. Many companies also exclude theft as they sell separate theft coverages.As mentioned it is usually included in the rental price, but where sold separately CDW costs €/$/£10 to €/$/£30 per day. LDW (which is CDW with Theft Protection) is in the same price range.
 
If it is not already included, we recommend to all customers that they take out a basic CDW (or LDW to include Theft Protection) for European rental vehicles. Our Insurance Policies and warranty protection policies for Rental Cars cover you for all the items these policies don't protect you for.

What is Super CDW or SCDW?

If you take out the basic CDW as advised above your excess is still in the range of €/$/£1500-3000. This can be lowered with Super CDW. It can be confusing because the rental companies might also call this product "CDW" but the main thing to be aware of is that these policies reduce your excess from somewhere between €/$/£1500 and €/$/£3000, towards €/$/£0.
 
These policies are sold aggressively at the rental company rental desks. The cost is similar to CDW (€/$/£10 to €/$/£30 per day) with similarly hidden exclusions (windscreen and tyre repairs/replacements plus undercarriage, roof, interior, window and side mirror damage). Repairs for those types of damage are charged at the full rate but limited to the reduced liability of €/$/£1500-3000.

What is Supplementary Liability Insurance (SLI)

Purchase Supplementary Liability Insurance (SLI) from the rental company. This will be offered generally in states where third party liability is not required to be held by the vehicle owner. The SLI cover is usually between $1,000,000 and $2,000,000. However we always recommend that you ask the rental company as there are differences from state to state.

What are the types of rental car insurance polices I can buy?

Excess Cover

Excess Cover or Excess Reduction Insurance is designed to protect you against any excess that you might have on your rental car. Excess is the amount that you are liable to pay should you be in an accident of if your rental car is damaged. Excess is sometimes also referred to as a deductible.

Usually, when you rent a car Excess Cover Insurance usually brings your excess down to zero, which means you won’t have to pay anything in case of an accident or damage.

Collision Damage Waiver (CDW) and Loss Damage Waiver (LDW)

CDW is an optional service sold by car rental companies that protects you in case you’re in an accident or any event that causes damage to your car rental. CDW may or may not include a deductible or an excess. Typically, if you rent a car in the United States, your CDW covers you for all the costs related to  damages to your car rental whereas if you’re traveling elsewhere, chances are that your CDW has an excess, which may be up to a few thousand dollars.

LDW on the other hand, is a combination of CDW and Theft Protection, which means that you will be covered for car replacement if your rental car is stolen during the period of your rental.
Please keep in mind that CDW or LDW only covers car rental damage or theft, in the case of LDW. It does not cover you you for damage to another vehicle or if the accident results in injuries.

Super Collision Damage Waiver (SCDW) and Super Loss Damage Waiver (SLDW)

Think of SCDW as a premium version of CDW. It covers you for most of the exclusions present in the CDW option offered by the car rental company. It also reduces your excess down, in most cases, down to zero. Please keep in mind that SCDW, or CDW and LDW for that matter, are all optional protection services and it is not mandatory for you to purchase them.

Supplementary liability insurance

Supplementary liability insurance (SLI) is an insurance option that covers you for third party liability. This means that if you happen to be in an accident and cause damage to another vehicle, you will be covered for damages to the third party’s vehicle up to a certain amount.

What is PAE, PAI, PEC or PPP

Commonly referred to as Personal Accident Insurance (PAI), this type of insurance has multiple names: Personal Accident and Effects (PAE) Personal Accident Insurance (PAI) or Personal Effects Coverage (PEC) Personal Protection Package (PPP).

PAI protects you against costs related to injuries caused to the driver or the passengers of the rental car in the event of an accident. This can include costs like medical costs, emergency ambulance costs, accidental death cover etc.

How does RentalCover.com work? 

why-get-rental-car-insurance 

 

With a RentalCover.com insurance policy, not only will you be fully covered by an underwritten insurance policy, you will also save money. Read more about how RentalCover.com works.

More reasons to get a quote from RentalCover.com

  • Save! We are 50% cheaper than what you'll pay at the rental desk 
  • We cover more! No exclusions unlike the waivers offered by rental car companies and where you'd typically pay significantly more to cover things such as windscreen, keys, underbody, tires etc.
  • Zero $0 excess (excess is aka “deductible” in US)
  • We covers administration or “loss of use” and other fees that are charged by rental companies when there’s damage
  • Claims are processed in 1-3 days
  • 100% free cancellation up until the time of pickup
  • Our policies are available to purchase online so you can get rental car insurance from us for any country of residence
  • We covers any drivers nominated on the rental agreement
  • Claims can be paid in your preferred currency
  • Use us with any of the popular rental car companies 

Our most frequently asked questions


Discount Rental Car Insurance

For campervan and motorhome rentals, try our motorhome and campervan excess cover overview or for 4x4s and 4x4 campers, try our 4x4 excess cover page.

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