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Car hire - Super CDW vs Excess Insurance
aaj123
Posts: 518 Forumite
Since I am about to hire a car in Dec for the first time, I was researching on moneysavingexpert and other websites and many of them seemed to suggest that purchasing excess insurance beforehand from companies like Questor (where you can get this for something like £3 a day) is often a much better deal than purchasing Super CDW (which reduces the excess on CDW to 0) at the rental desk.
I just want to point out one aspect which doesn't seem to have been flagged up clearly on the websites suggesting the above.
Excess insurance is meant to cover the excess amount that one has to pay after one makes a claim on the primary insurance. This means that if you were held liable by the rental company for an amount less than the excess on the CDW, you are not going to get anything from the Excess Insurance policy since there was no claim for the primary policy in the first place.
For example, it is quite typical for Excess on CDW to be in the range of £800. If you knock the car and are hit with a bill of £1400, sure enough your CDW will waive off 600 from the amount and you will have to pay £800 and then the Excess Insurance policy that you may have purchased seperately would reimburse you the £800.
But, if the hire company only held you liable for say £600 in the first place, then hard luck as you would then be out of pocket for the full amount as there is no claim on the primary CDW and hence the Excess Insurance policy doesn't come into play at all.
Just bear this in mind and then choose. My aim is not to suggest which option to go for but just to point out that purchasing Excess Insurance is not outrightly better than to purchase Super CDW which truly reduces excess to 0 and removes liability even for small claims.
Somehow I find even Martin's advice failing to mention this distinction between the two options.
I just want to point out one aspect which doesn't seem to have been flagged up clearly on the websites suggesting the above.
Excess insurance is meant to cover the excess amount that one has to pay after one makes a claim on the primary insurance. This means that if you were held liable by the rental company for an amount less than the excess on the CDW, you are not going to get anything from the Excess Insurance policy since there was no claim for the primary policy in the first place.
For example, it is quite typical for Excess on CDW to be in the range of £800. If you knock the car and are hit with a bill of £1400, sure enough your CDW will waive off 600 from the amount and you will have to pay £800 and then the Excess Insurance policy that you may have purchased seperately would reimburse you the £800.
But, if the hire company only held you liable for say £600 in the first place, then hard luck as you would then be out of pocket for the full amount as there is no claim on the primary CDW and hence the Excess Insurance policy doesn't come into play at all.
Just bear this in mind and then choose. My aim is not to suggest which option to go for but just to point out that purchasing Excess Insurance is not outrightly better than to purchase Super CDW which truly reduces excess to 0 and removes liability even for small claims.
Somehow I find even Martin's advice failing to mention this distinction between the two options.
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Comments
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That's because you have it all wrong.
For a simple explanation; CDW covers you for everything(actually it doesn't, but I'm trying to keep it simple), but with an Excess of £1000. That means the car hire company can claim a max of £1000. There is no 'primary policy' from which you have to claim.
You scenario of a bill of £1400 cannot occur, unless it is for items not included in the CDW policy at all. Excess Insurance includes these items. Tyres, windscreen etc
Excess Insurance covers that £1000(In practice it also covers items not covered by the normal CDW policy). The Car Hire company can bill you up to £1000 in the event of an incident. You pass the paperwork and bill to the insurance company and they reimburse you.
The difference with purchasing SuperCDW directly from the Car Hire company is that purchasing from the Car Hire company is a lot more expensive, but then you don't have to leave a large deposit on your credit card.0 -
NiftyDigits wrote: »Excess Insurance covers that £1000(In practice it also covers items not covered by the normal CDW policy). The Car Hire company can bill you up to £1000 in the event of an incident. You pass the paperwork and bill to the insurance company and they reimburse you.
The difference with purchasing SuperCDW directly from the Car Hire company is that purchasing from the Car Hire company is a lot more expensive, but then you don't have to leave a large deposit on your credit card.
Ok so in your example where the CDW excess is £1000, lets say I caused a dent to appear on the car and the rental company assesses the loss to be £400. Do you reckon that Excess Insurance company would reimburse me £400?0 -
Got it.Ok so in your example where the CDW excess is £1000, lets say I caused a dent to appear on the car and the rental company assesses the loss to be £400. Do you reckon that Excess Insurance company would reimburse me £400?
That's what the policy exists to do. Plus a few other frills.0 -
Ok so in your example where the CDW excess is £1000, lets say I caused a dent to appear on the car and the rental company assesses the loss to be £400. Do you reckon that Excess Insurance company would reimburse me £400?
Yes, but make sure that you get as much paperwork from the hirer as possible pertaining to the damage and for what you are being charged.0 -
NiftyDigits wrote: »Yes, but make sure that you get as much paperwork from the hirer as possible pertaining to the damage and for what you are being charged.
Ok good to know this. It looks then that car hire excess insurance policies are different to how other excess insurance policies are designed.
For instance, excess insurance policies for stuff like appliance repair state quite clearly that the policy will pay out only when the entire liability exceeds the excess and the primary policy has accepted the claim and agreed to pay out the party that is over the excess.
From what you guys say, clearly car hire excess insurance works differently.0 -
Ok good to know this. It looks then that car hire excess insurance policies are different to how other excess insurance policies are designed.
For instance, excess insurance policies for stuff like appliance repair state quite clearly that the policy will pay out only when the entire liability exceeds the excess and the primary policy has accepted the claim and agreed to pay out the party that is over the excess.
From what you guys say, clearly car hire excess insurance works differently.
I don't have any idea of what is that you are going on about....
What is an Excess Insurance policy for appliance repair?
Can you link me to an example?0 -
NiftyDigits wrote: »I don't have any idea of what is that you are going on about....
What is an Excess Insurance policy for appliance repair?
Can you link me to an example?
Sure. Here is one:
https://excessbee.com/index.php/faq-s
In particular, see the FAQ question:
What happens if the damage is less than my insurance policy excess?
Do you see now how your explanation of the car hire excess insurance policy differs from this excess insurance policy works?
I have just quoted one example in the link but every other non-car hire excess insurance policy I have seen has the same stipulation about them not covering liabilities which were less than the Excess amount.
Additionally see this:
http://www.confused.com/car-insurance/articles/excess-protection
where they say - Excess protection exceptions
Excess protection only kicks in if the value of a claim is equal to or more than your excess.0 -
OK, so there are insurance policies out there that cover the excess on another insurance policy (pretty much any kind of insurance) and will only pay out if the value of the claim exceeds the excess. Presumably these policies are quite cheap because they are excluding a lot of the risk.
But have you found any examples of this practice among the policies that are designed to cover car hire CDW excess?Let's settle this like gentlemen: armed with heavy sticks
On a rotating plate, with spikes like Flash Gordon
And you're Peter Duncan; I gave you fair warning0 -
OK, so there are insurance policies out there that cover the excess on another insurance policy (pretty much any kind of insurance) and will only pay out if the value of the claim exceeds the excess. Presumably these policies are quite cheap because they are excluding a lot of the risk.
But have you found any examples of this practice among the policies that are designed to cover car hire CDW excess?
No, so it does look care hire excess insurance policies work different to other excess insurance policies. Since this was the first time I was looking for a car hire excess insurance policy, I initially assumed they worked in the same manner as other excess insurance policies and hence my original post. Now that it looks I was wrong, I am more than happy that I will have a car hire excess insurance policy which will cover even minor claims.
To be sure about this, I did a live chat with a Questor agent and they confirmed that even small claims are covered in their car hire excess insurance policy. So goody :T
As for your comment about 'other policies being presumably cheap because they exclude a lot of the risk', bear in mind that the Questor car hire excess policy starts from £2.49 a day. So this too looks really cheap to me considering that they have confirmed they cover any small claims.0 -
As for your comment about 'other policies being presumably cheap because they exclude a lot of the risk', bear in mind that the Questor car hire excess policy starts from £2.49 a day. So this too looks really cheap to me considering that they have confirmed they cover any small claims.
Excess policies are always going to be cheap because the downside is limited to the level of the excess, unlike (for example) a car insurance policy that has to consider the eventuality that you ram your car into the middle of a Ferrari owner's club meet-up and write them all off.
So a policy that only covers the excess in a limited set of circumstances should be even cheaper...Let's settle this like gentlemen: armed with heavy sticks
On a rotating plate, with spikes like Flash Gordon
And you're Peter Duncan; I gave you fair warning0
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