Car Rental and Insurance Excess Options

One of the most onerous and misunderstood aspects of car rentals today is the accident / insurance aspect of it. When you are renting a rental car, the rental companies, almost without exception, will try, and sometimes very hard, to convince you that it is in your best interest to add to the collision damage waiver (CDW) cost. There are other names for it, but they all mean exactly the same.

Firstly, your common sense will tell you that if it is good for you, it can not be good for the company at the same time. So, what goes on here? Well, most companies, because of their exorbitant insurance premiums are virtually forced to self insure their vehicles. That means they bear any accident costs themselves and offset that with the "CDW". It is far cheaper for them to do it this way than to pay the huge insurance premiums for every car. The CDW factor then becomes extra profit for the companies in the main and that's why they seriously urge you to take it up. Incidentally, legally speaking, in Australia, the precedents in law relating to the accident liability are that it is the owner of the vehicle unless you are acting as an agent for the owner, and it would be very unusual for the hirer to be acting as a " agent "for the owner.

Therefore it does require a lot of consideration as to whether or not you pay the extra to reduce your liability. Emotionally it is far less stressful to take the excess and not be driving around with a high excess that has been deliberately inflated to convince you that the CDW is a good idea. Practically speaking, however, it does not take long for the CDW to add up and amount to more than paying the excess in the unlikely event that you have an accident. Therein lies the dilemma

Many people are under the wrong belief that their normal credit card insurance will cover them for any accident excesses. This is not always the case as in many cases you are not covered for the excesses if the car rental company has offered you excess redundancy.

So when the time comes to make your reservation for car hire, all the afore said needs to be carefully considered and a decision is made. made as to whether or not you will be taking the CDW.

Now, when the unfortunate happens and you are involved in a car accident, there are a few things to consider. Firstly I would be approaching the other driver or drivers, regardless of who is at fault, with a view to obtaining their full details, including the name of their insurer. Apart from that you need their license number and be sure that it contains their current address. Of course a lot of things here will depend on the severity of the accident, the attitude of the other people and the locations of the accident i.e. is it a busy spot and are you able to leave the cars at the scene? As soon as possible it is wise to contact the rental car company, taking note of who you spoke to and when, and looking for there requirements with regard to accident report forms, which are sometimes provided in the glovebox of the hire vehicle. Of course the police need to be informed if the accident is to be serious enough, and unfortunately, this is not always easy to determine.

Most unfortunately, along with the trauma of the accident, you will probably have to deal with several extremely competitive and aggressive tow truck drivers. Whatever happens under no circumstances should you let them touch your rental car unless you are directed to do so either by the police or the car hire company. All tow truck drivers / companies are paid a highly inflated rate for what is called a "police tow". This tow will ultimately have to be paid for by someone and that someone could be you. On top of that the truck driver / company also receives a commission from any panel beater that he delivers the car to with whom he has an arrangement. So the reason for his "keenness" to tow your vehicle!

From this point on you will need to work with the car rental company to sort through all the details and most importantly, what happens next! You will probably need to pay the excess at this point and then set it up to recover it should you have not been at fault.

Good luck and hopefully this article has been of some help and not put you off the car rental!