When hiring a car or vehicle of any kind, it is an obvious necessity to be insured for the duration of the hire period.
The car hire company will have pre-set agreements with various insurance companies to cover their clients while hiring a vehicle. Parts of these agreements require that the client agrees to a certain level of excess payment should an accident occur. For example the policy may state that should damage to the vehicle occur then the driver is liable to the first agreed set amount anywhere between $150/£100/€120 to $3200/£2000/€2300. This is known as excess and is included in car hire insurance known as car hire excess.
This feature of the underwriter is common among vehicle rental and usually cannot be avoided. It is a condition of the rental of the vehicle. However, there are often varying levels of excess that the customer can chose from. If the excess amount is high then the premium will likely be lower, if the excess level is low then the premium price will likely be higher. It is a risk-reward ratio in insurance terms.
Many large insurance companies and insurance brokers have noticed the more strict rules governing care hire excess insurance and the cost involved to the end user should an accident occur. To appeal to care hire drivers, many third party insurers now offer lower cost policies of their own with lower excess limits to attract the drivers business away from the car hire insurance company. Not only are these policies generally cheaper, they usually cover more of the vehicles liability such as windscreens and tyres that the hire companies do not in addition to lower excess.
Third party insurance can also be bought per-hire basis or as an annual policy. The latter is beneficial as it covers a driver for any hire of any vehicle for 365 days, so is ideal if rentals are a regular occurrence over that period of time. This car hire insurance cover usually also includes worldwide cover for car hire on vacations and it extends to theft and accidents that were a third parties fault.
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