For most of us, having to make choices about insurance for car hire
can be very intimidating. An unchartered terrain filled with
what-ifs, grey areas and loads of fine print, we often end up
making rash, uninformed decisions, cross our fingers and hope for
the best! But relying on fate can be a foolish act that may all too
quickly become a very costly mistake. So, how does one make smart
and informed choices about car hire insurance? The best place to
start is by familiarising yourself with all those confusing terms
and ensuring you know exactly what they mean. Here is some of the
most common car insurance jargon that you’re bound to encounter:
- Personal Accident Insurance (PAI) is a type of insurance that
will cover the medical costs for the driver and other passengers
that might be incurred in case of a collision.
- As the term suggests, Personal Effects Coverage (PEC) will
insure you against the loss, theft or damage of personal items
from the rented car.
- Collision Damage Waiver (CDW), is a big one that you’ll no
doubt come across... This kind of insurance releases you – the
renter – from being responsible for damage caused by a collision.
Sometimes it is also referred to as Loss Damage Waiver (LDW),
although Loss Damage Waiver is generally understood to be a
broader kind of insurance that covers both damage caused by
accidents as well as incidents such as theft and vandalism. Your
own vehicle’s insurance may already include this – verify this
before you leave home and avoid buying unnecessary insurance. LDW
may or may not be included in the price of your hired car.
- Car Hire Excess Insurance is the umbrella term for these
types of insurance that release you from having to pay excess
fees if your rental car is involved in an accident, or subjected
to damage or theft.
- Additional Liability Insurance (ALI), sometimes also called
Supplementary Liability Insurance (SLI), will provide you – the
renter – with extended coverage as regards third-party claims.
These types of claims include physical injury, death, or damage
to another person or their property. This is the kind of car
rental insurance that you’ll need if you’re involved in an
accident with another person or vehicle whilst operating your
rented car.
- You may also see an option to take out Lock Out Cover. If
you’re the forgetful type who often locks your keys into the car,
this coverage will release you from having to pay for a
locksmith.
Before you leave home and have to choose whether or not to
purchase car rental excess insurance, remember to go through the
terms of your own car’s insurance policy, which will often provide
some kind of coverage even if you’re driving a hired car. Several
major credit card companies also include insurance benefits for car
hire when you make use of your plastic to pay for the rented
vehicle.