Car Hire Insurance - what happens if I don't have enough money to cover the excess?

judywoody

I just had a discussion with my hubby - we were talking about car hire insurance and how expensive they are when you purchase extra cover to waive the excess. My hubby gets a bit paranoid over these things and insists to take out insurance every time (I can understand that though - my dad once had an accident and it wasn't his fault but he still had to pay the excess until the insurances on both sides clarified whose fault it was and it took 3 months until he got reimbursed)

Now we realized that you can take out much cheaper third-party insurance that will reimburse the excess in case of an accident. And it also covers a lot more than some in-house insurances do (ie tires, roof etc).

However, I understand that I will still have to pay the excess and then claim it back. What if I take out in-house insurance? It's just that we are not that rich that we could easily get 800£ excess charged on our debit card for a few days and we have made all credit cards unusable for a purpose. So what happens if there is not enough money on the card to cover the excess? Will they just keep the 200£ or so deposit? (which we don't really want either)..

I also read that even if you take out in-house insurance they could charge you the excess until they resolved the issue with their insurer.

Any idea?

lisyloo

So what happens if there is not enough money on the card to cover the excess?

I doubt you will be able to hire a car.
They normally want to "pre-authorise" a certain amount on your credit card to cover themselvese. If you don't have it you won't be able to hire a car with most companies (I don't know about every single company, that's just how most work).

My suggestion would be to take out the insruance. Your hubby is not being paraniod. Quite often people get charged for scratches or dents they didn't put on, either cynically or because they didn't get adequated checked and noted down before they took the car. The only way to avoid cynical claims is to be fully insured as there is then no advantage to the company in doing so.

Why do you need to hire a car so often, if this is a frequent occurence then you might actually be better off buying one.

rs65

judywoody wrote: »

I also read that even if you take out in-house insurance they could charge you the excess until they resolved the issue with their insurer.

I believe they don't. The idea of paying extra is to hire the car with a nil excess.

judywoody

lisyloo wrote: »

I doubt you will be able to hire a car.
They normally want to "pre-authorise" a certain amount on your credit card to cover themselvese. If you don't have it you won't be able to hire a car with most companies (I don't know about every single company, that's just how most work).

My suggestion would be to take out the insruance. Your hubby is not being paraniod. Quite often people get charged for scratches or dents they didn't put on, either cynically or because they didn't get adequated checked and noted down before they took the car. The only way to avoid cynical claims is to be fully insured as there is then no advantage to the company in doing so.

Why do you need to hire a car so often, if this is a frequent occurence then you might actually be better off buying one.

Oh we've been hiring cars for ages on our debit card but we always took out the in-house insurance. Yes they take a 200£ deposit but that's less than the 800£ excess. That's why I'm asking.

The question is - is a third party insurance always better if you can't fork out the excess for a few days/weeks? I don't know how long it takes to get reimbursed you see? And most in-house insurances don't cover half of the car...so if we have a puncture, we have to pay some excess because their insurance often doesn't cover tires. Whereas third-part insurers cover everything and are cheaper - only downside, you have to pay the excess upfront.

We hire cars every now and then - about 4 times a year - because we don't have our own car and it's cheaper to hire than to own if you don't really need one at other times.

rs65

judywoody wrote: »

The question is - is a third party insurance always better if you can't fork out the excess for a few days/weeks? I don't know how long it takes to get reimbursed you see? And most in-house insurances don't cover half of the car...so if we have a puncture, we have to pay some excess because their insurance often doesn't cover tires. Whereas third-part insurers cover everything and are cheaper - only downside, you have to pay the excess upfront.

The term 'third party insurance' is confusing because it means something else. You are referring to 'hire car excess insurance' which, as you say, covers more than the excess.

Whether it is better or not is a personal choice. If you hire a car with a nil excess then you don't really have to worry about anything happening to it whilst on hire. If you have an £800 excess, then damage up to £800 is your responsibility and you will then have to recover from your 'hire car excess insurers'.

I have the cover you refer to as I hire cars for maybe 40 days a year. For £40 I think it is good value compared to maybe £5 or £10 a day payable to the hire company to reduce the excess to nil.

I haven't had to claim on it so I have no idea how good or how quick it is.

If you do go for it, check the cashback sites first.

Also, be aware that some policies require that the hire takes place more than a certain distance from home - one I looked at was 100 miles.

judywoody

rs65 wrote: »

The term 'third party insurance' is confusing because it means something else. You are referring to 'hire car excess insurance' which, as you say, covers more than the excess.

Whether it is better or not is a personal choice. If you hire a car with a nil excess then you don't really have to worry about anything happening to it whilst on hire. If you have an £800 excess, then damage up to £800 is your responsibility and you will then have to recover from your 'hire car excess insurers'.

I have the cover you refer to as I hire cars for maybe 40 days a year. For £40 I think it is good value compared to maybe £5 or £10 a day payable to the hire company to reduce the excess to nil.

I haven't had to claim on it so I have no idea how good or how quick it is.

If you do go for it, check the cashback sites first.

Also, be aware that some policies require that the hire takes place more than a certain distance from home - one I looked at was 100 miles.

Sorry, yes that's what I meant by third party insurance - sorry for the confusion

Thanks - well, we only hire for about 10 days a year but that's easily an extra 100£ if I go for the in-house insurance. If I go for an external insurer I can save about 60£.