Watch out if you’re hiring a car!

by Rachel Robson on 21 September 2009  |  8 comments
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If you’re hiring a car, don’t be persuaded to buy an insurance policy you don’t need!

I've just come back from holiday. I went to Ireland and amazingly the sun shone and it was lovely.

There was just one problem and that was the issue of car hire. It just seems so ridiculously expensive!

Having read several articles on lovemoney.com I was aware of the hefty cost of insurance that seems to go hand-in-hand with car hire.

Typically, when you hire a car, you'll take out something called a collision damage waiver (sometimes called loss damage waiver). This is a basic insurance which provides cover for damage that occurs to the rented vehicle.

There's just one problem and that's the hefty excess it usually comes with - often as much as £1,000. This means if you have an accident, you'll have to cough up this amount.

To reduce the excess to a more reasonable £50 or £100, when you go to pick up your car, you might be offered a 'super collision damage waiver' or 'damage excess insurance'. Sounds good in theory but this can work out to be very pricey - in fact, it can be as much as £15 a day! Not only that, but if you take a look at the small print, you'll probably discover that damage to the tyres or windscreen won't be covered anyway.

However, I already knew this before I went on holiday, so I decided to be ultra organised and I took out excess reimbursement insurance before I set off instead. This is simply a separate policy (not from the car hire firm) that will cover your excess payments if you do have an accident. It should also cover you for damage to parts of the car not covered by the car hire firm's policy.

The great thing about this is that it's much cheaper than taking out the car hire's policy. For example, Carhireexcess.com offers comprehensive cover from as little as £1.99 per day in Europe, while insurance4carhire.com offers an annual European policy for £49.

So, having taken out a policy, I was pretty pleased with myself when I arrived to pick up my car at Cork Airport. I was ready to tackle the salesman and tell him 'No, I don't want your insurance thank you!'

Unfortunately, my smugness didn't last. As I started talking to the man behind the desk, proudly stating that I already had excess insurance, I started to become confused. In fact, the salesman had no idea what I was talking about and told me I would be mad not to take out the correct insurance and that the policy I had was probably a waste of time.

As I fired a few questions at him, I started to panic that I wouldn't be fully insured and if I had an accident I would be in a sticky mess. So, in my utter confusion, I gave in and paid out for the extra insurance he was offering me. As it turned out this was the 'damage excess insurance' I was so against - although I'm sure it was called something else to really leave my mind boggling.

This cost me around €90 for a week's rental. It was only later when I had calmed down that I understood exactly what I had done. In other words, I had thrown €90 down the drain! I hadn't needed to lower my excess by taking out the extra insurance, because I had already covered my excess with my original - and far cheaper - policy. Believe me I was not happy! And I am also still a tad embarrassed. After all, I should know better.

But anyway, the moral of this story is don't let the fancy sales talk confuse you when you hire a car. Stick to your guns and don't let the nasty little salespeople persuade you into buying an expensive policy you don't need! Believe me, next time I hire a car I won't be making the same mistake!