By Taking Out My Own Car Hire Excess Insurance Policy.
This summer I was spending time in Menorca, Spain with my family. I spent days searching online for a good car hire deal - that's a tough thing to find in Menorca during the summer. It's one of the most expensive places in Europe to rent a car during high season. The online quotes were consistently around 900 Euros for a 2-week hire and I was about to give up and pay the money to Hertz, Avis or Europcar when I came across a US travel website that was quoting me $235 for a 2-week hire. I knew something had to be up (I hoped it was a bug in their system) but the cost was just too tempting and I went ahead and made the booking.
Upon arrival at Menorca airport I found out what made up the difference between the quotes I had received and the booking I made. Car hire excess insurance! I also found out that if I wanted to add insurance here at the airport it was going to bring the total cost to 1100 Euro's, more than the quotes I had received online.
Furious, I stormed out of the airport and into a taxi. Later that evening I sat down with my laptop and tried to figure out how to beat the system. How could over 80% of the cost of hiring a car be the insurance policy? How was that fair? Why wasn't this information made clear online? Why didn't car hire companies break down their prices to give customers the information they need to make an informed purchase decision?
What Did I Learn?
Car hire companies charge ridiculous amounts of money for insurance policies when you hire a car - especially when you are hiring abroad. Up to 80% of the total cost of the car hire is made up of insurance. Some USA travel websites issue quotes that do not include the insurance costs and it's not very clear that you're going to get a horrible shock when you get to your destination. It makes them look very competitive and must lead to lots of bookings but its misleading and unfair to customers.
Car rental companies generally bundle their quotes together so it's unclear how much of the quote is made up of insurance. They also do not tell you that the insurance policy is optional - you can, if you want, arrange your own insurance policy before you pick up the car.
It's very difficult, at least in the UK to find an online quote that excludes insurance but car hire companies cannot force you to take their recommended insurance policy. Try calling them and making a booking over the phone instead.
How Did I Beat The System?
I began to research car hire insurance and discovered that it was possible to take out your own insurance policy, specifically for car rental excess. The policies can be taken out on a single trip or annual basis and cover car hire across Europe or Worldwide. There are a handful of companies in the UK who specialise in these policies (see links above) and they will offer insurance policies that match the highest levels of cover offered by the car rental firms themselves.
I took out a policy that covered me across Europe for 12 months (any number of trips). It was arranged via one of the companies above but the ultimate insurer was Allianz of Germany so I know its a legitimate product. The policy covered my excess, theft, collision waivers, wheel damage, misfuelling, tow trucks, key-loss, personal belongings, medical costs etc - absolutely everything you would expect from an insurance policy. The total cost for 12 months? £37.99
The next day, armed with my new insurance policy, I made another booking with the same US travel website, this time for $209.
The total cost of my car hire ended up being $209 + £37.99 - approximately $260. The original online quotes were averaging 900 Euros or approx $1,011. So I saved myself $750 and I was pretty happy with myself for doing so.
So much so I came back to work and immediately wrote this article to help others save up to 80% off their car hire costs next time they go abroad or hire a car in the UK.
Things To Bear In Mind
When you have your own insurance policy you will have to pay for any damage costs and then claim them back from your insurer. This can take some time so beware of this before following the advice above.
It is very important that you take out your own insurance policy BEFORE you pick up the car from the rental company. If you do not have the policy in place from the beginning any claims you make will be invalid. It doesn't matter if your insurance policy starts days, hours or minutes before you pick up the car, just beware of the time stamps on your insurance certificate and make sure it's before the time stamp on your car hire documents.
If you choose a stand-alone insurance policy, you should also be prepared to carry out a careful inspection of the rental car when you collect it. This must be done with a member of staff from the car rental firm. You must also ensure that you keep safe any paperwork that you have relating to the original condition of the car. If the car is damaged, you will have to report it and obtain an official damage report. The damage report will be vital when it comes to making a claim on your stand-alone policy.
European airport counter staff have also been known to make exaggerated claims about potential problems drivers could face if they do not opt for the rental company’s chosen insurance cover. Do not fall for any of this. It doesn't matter who's insurance you have, it only matters that you are insured.
