Nowadays, most people prefer renting a car for personal vacations or business trips over bringing their own cars. The advantages are countless. However, most companies charge a car hire excess, or a specific amount that you need to pay if there are any damages on the rented vehicle. This amount needs to be paid first before the insurance coverage is availed to cover any repairs needed for the rented car. The amount is usually five or ten times higher than the rental charge. Rental companies also offer a special type of insurance to cover this, but the amount is still significantly expensive.
To address this, travelers can now avail of daily or annual car hire excess insurance packages. These are packages that you can purchase or avail of prior to your scheduled trip and car rental. Normally, these are provided by external insurance companies and not by the car rental companies. As the name implies, the annual insurance would cover all your car rentals for a period of one year. Normally, the package offers unlimited coverage. So, even if you travel the whole year round, you do not have to worry about paying for any excess charges. The rates vary depending on the country you are planning to go to.
Daily car hire excess insurance coverage, on the other hand, allows you to pay for just the number of days you will actually be travelling and renting a car. Normally, the rates offered by external insurance providers are three to four times lower than the insurance package offered by the car rental companies, so it is still a better choice.
Now that we have established that these packages are cheaper compared to the insurance offered by the rental companies, the next thing we need to know is which is cheaper and which would allow us to save more: the annual coverage or the daily coverage?
Annual car hire excess insurance packages are more suitable if you travel frequently. Usually, the annual premium is just around 10 times the daily premium, so if you plan early and determine that you will be renting a car for more than ten times within a twelve month period, the annual coverage is the better choice for you. However, if you are a light traveler, then the daily insurance coverage would be the cheaper choice. It is also important to check whether the annual insurance offers unlimited coverage or not, and whether the coverage is available for just a specific state or country, especially if your travel plans would require you to travel from one country to another.
Traveling and renting a car may seem to be quite expensive and stressful, especially because of unnecessary car hire excess charges. But if you plan early and avail of the most suitable insurance package, you will definitely save time and money. All you need to worry about is choosing the cheapest car rental rates and planning your itinerary, and you are all set for your next worry free vacation or business trip.
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