Annual travel insurance - £2k CDW cover inc. Sufficient?

On-the-coast

Hello,
I've been looking at an annual travel policy available to me via my employer.  It's actually pretty attractive for medical purposes (my main worry), as it doesn't exclude nearly as many pre-existing conditions as my current Bank Account based travel policy - I assume due to the shared risk nature that my employer has negotiated.
One of the extra benefits of the policy is an included £2k maximum CDW against care hire.
I've often bought annual policies in the past - but a "good" annual hire car excess policy on its own cost me over £100 (for 2 people)

I'm by nature a risk taker, and I've done a vast amount of overseas driving... and I'm quite happy to underwrite my own losses to the tune of a few thousand pounds; but i want to avoid bankruptcy  levels of claim or 3rd party claim.    So I'd appreciate your thoughts on whether £2000 of CDW (collision damage waiver) is sufficient...
Thanks.

DullGreyGuy

On-the-coast said:
but i want to avoid bankruptcy  levels of claim or 3rd party claim.    So I'd appreciate your thoughts on whether £2000 of CDW (collision damage waiver) is sufficient...

In the UK at least you cannot go bankrupt to avoid paying someone for injuries which you are liable for causing and that is 99% of the time what results in £100k claims. 

CDW is your excess and £2k is a fairly high excess unless you are hiring exotic vehicles or large vans etc. Inevitably there will be some budget providers providing cheaper hire by having a higher excess. The thing to do is double check the wording.. what happens if it's a £2,500 excess? Do they reimburse the first £2,000 or do you get nothing for having exceeded the limit. 

SLI may also be provided, £2k for that wouldn't be worth anything, but it depends if you travel to the US where it's a relevant insurance. If you do, also check where the insurance is written from as most US insurers cannot cover punitive damages but some foreign insurers do target the US market to inc punitive damages which can be exceptionally high and is easily going to blow through any limit you buy. 

On-the-coast

Thank you very much.
The summary document descibes the policy (among many other things) as covering "The excess under a car hire agreement" - which in the associated detailed document has a limit of £2000 with no excess.  So as you correctly deduced this is an Excess policy. There is no mention of SLI, and i do travel and drive in the US (although majority is business there).
There is a personal liability section (£2MM) but that specifically excludes liability arising from use of vehicles.

I recall reading the US Hertz policies in minute detail last year... becuase different levels of SLI cover were presented depending on whether i was using my employee discount code...  In the end I bought what i thought was a high-end annual car hire policy, exactly because of my concerns regarding that issue.

So I'm thinking this CDW cover is a bonus (superficial add-on to a general travel policy), it might be sufficient for European driving, but probably not good enough for USA?  

DullGreyGuy

Some travel includes CDW as standard, the bundled travel insurance with certain AmEx credit cards does.

Minimum insurance requirements and standard offered by hire car companies varies by state in the US so it really does depend but the sums that can be paid out over there are crazy and no mini add on policy is going to cover the worst accidents. 

In the UK if your child is killed in an accident you would get £12,980 for pain, suffering and loss of amenities, if multiple people claim that money is shared between them. In a very unfortunate case in the US a vehicle killed a kid infront of family including parents and both sets of grandparents. The grandparents accepted $25m each for PSLA (so $100m total) and there was a case reserve of $200m against the likely settlement for the rest of the family claiming. 

I think my SLI was $250,000 last time in the US, wouldn't touch the sides of such a claim. 

On-the-coast

I think I'm beginning to understand this more clearly. I thought I'd finally got there last year, but clearly not!
i had a look at this website for a bit more clarification.
https://slingadventures.com/destinations/usa/renting-a-car-in-the-usa-what-insurance-do-i-need

It's not helpful the CDW and LDW seem (almost interchangable).... but the way I'm beginning to understand this is that in most jurisdictions when you hire a car you're insured fully (including generally sufficient liability cover) except for a certain amount of excess, generally against damage/loss to the car (accidents, scratches, dents etc. etc.) which TBH is the most likely form of damage, and hence why there is an excess.

A small amount of Excess insurance (CDW/LDW) will generally bridge that gap, or most of the gap.
the exception seems to be the USA... where each state does it differently, but generally a minimum level of Liability Insurance is included... and that minimum may well not be enough to cover serious injury or death (of 3rd parties).  The problem is that even paid-for Supplemental Liability insurance will often (always?) limit itself to $1-2Million, and there's really no way around that on the generally open market to us "foreign" renters.

DullGreyGuy

CDW and LDW are more or less interchangeable terms, like RTA and RTC some would say the later is more accurate as not all "collisions" are "accidents" just as not all "losses" arise from "collisions" but not one to get materially hung up on. 

Think of it as being as the same as the excess on your own car insurance for own vehicle damage. It's s technically a bit more than that as it normally covers certain things like tyres, glass and keys which aren't covered by the normal policy.

As to it being the most common form of damage? Cars don't tend to spontaneously dent etc and so typically something else has been involved but generally you need to do a fair bit of damage to a lamp post or bollard before someone pursues you for the cost of repairing it. 

SLI is more than just the USA, it's a fair proportion of the Americas which only have a low level minimum legal insurance. Hire comes with that, you can choose to top it up with an SLI policy.  There will always be the option of having more SLI if you want it, it's just not a mass market consumer thing and so will come with the cost of bespoke underwriting. 

For those outside Insurance $1m probably sounds like a lot, for those in the US they are used to having car insurance (or auto insurance as they call it) with a cap and being personally liable for anything above.

For some in other parts of the world the whole thing will be strange, in NZ accident insurance basically is state funded however payouts are based on medical bills, partial loss of earnings and permanent disability, there is no concept of compensation for pain/suffering. I call it accident rather than liability as any party can claim on it not just the non-fault one as long as its an accident (rather than deliberate act)