Does Travel Insurance Cover Car Rental?
Prior to embarking on your vacation or business trip, it's crucial to contemplate measures to ensure your health and safety in case of unforeseen circumstances, including potential expenses related to car rental excess.
While travel insurance might be the first solution that springs to mind and taking into consideration that hiring or renting a car is increasingly popular worldwide nowadays, it's worth examining whether your plan extends coverage to driving rental cars abroad, be it for a nearby trip in Malaysia or within your travel destination.
Let's take a look at the basics of car rental coverage benefits, what they include and exclude, as well as tips on driving safely with a rental car overseas.
Common Car Rental Coverage Benefits In A Travel Insurance Plan
It's essential to carefully review the policy details, including any exclusions or limitations related to rental vehicles as coverage options, limits, and exclusions can vary widely among travel insurance providers.
Collision Damage Waiver (CDW)/Loss Damage Waiver (LDW)
This covers the costs associated with damage to or theft of the rental vehicle. It typically waives the renter's responsibility for damage to the car, provided the terms of the rental agreement are met.
Liability insurance
This aspect covers damages or injuries to third parties in the situation of an accident involving the rental vehicle while you're travelling overseas. Moreover, liability coverage may help cover legal expenses and compensation payments when applicable.
Personal accident insurance
You'll be able to claim for medical expenses and benefits in the event of accidental injury or death while driving the rental car if your travel insurance car rental coverage includes this benefit.
Personal effects coverage
The rate of crime differs from destination to destination, so having this coverage will give you a certain extent of protection against loss from theft or damage of personal belongings kept in the rental car.
Roadside assistance/towing coverage
This provides assistance in case of breakdowns, flat tires, or other roadside emergencies while driving the rental vehicle.
Loss of use coverage
If the vehicle is damaged and unable to be rented out while repairs are being made, this benefit reimburses the rental car company for lost rental income.
Excess reimbursement insurance
This covers the excess amount that the renter is responsible for paying in the event of damage to the rental vehicle. As your CDW or LDW may not always be sufficient to cover the cost of repairs or loss, the rental car company might charge an excess fee to offset the loss incurred. However, there are certain conditions that must be met for your claim to be successful.
What are the Usual Exclusions for Car Rental Coverage Benefits in Travel Insurance?
Common exclusions for travel insurance with car rental coverage benefits can vary depending on the specific policy and provider, but some typical exclusions may include:
- Excluded rental vehicle types
Certain types of vehicles may not be covered, such as luxury cars, exotic cars, or vehicles with more than a specified number of seats (e.g., vans or buses). If you're going on road trips, you've got to keep in mind of such an exclusion as well.
- Rental periods exceeding policy limits
There may be restrictions on the maximum duration of rental coverage provided by the policy. Rentals exceeding this limit may not be covered.
- Rental agreements that violate policy terms
If the rental agreement violates the terms and conditions outlined in the insurance policy, such as driving under the influence, reckless driving, or allowing unauthorised individuals to drive the rental vehicle, coverage may be invalidated.
- Losses covered by the rental company
Some travel insurance policies may exclude coverage for losses that are already covered by the rental company's insurance or waivers, such as collision damage waivers (CDWs) or theft protection.
- Driving in restricted areas
Coverage may be excluded for accidents or incidents that occur when driving in restricted or prohibited areas, such as unpaved roads, off-road terrain, or areas deemed unsafe by local authorities.
- Pre-existing conditions
If a medical condition leads to an accident or incident while driving a rental car, coverage may be excluded if the condition was pre-existing and not disclosed or covered by the policy.
- Unattended belongings
Personal belongings left unattended in a rental vehicle may not be covered under the travel insurance policy if they are lost, stolen, or damaged.
- Illegal activities
Coverage may be excluded for accidents or incidents that occur while engaging in illegal activities, such as smuggling, illegal street racing, or using the rental vehicle for unlawful purposes.
- Excluded countries
Some travel insurance policies may exclude coverage for car rentals in certain countries or regions due to high-risk factors such as political instability, war, or high crime rates.
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Tips For Driving A Rental Car Safely Overseas
Here are some tips to guide you along the way as you plan for your road trip.
Check if an International Driving Permit (IDP) is needed
Think about road toll fees
Road toll fee exemptions for rental cars by tourists vary depending on the country and specific toll road regulations. Some countries may offer exemptions or special provisions for tourists renting cars. For example, in some states of Australia, tourists driving rental cars may be exempt from paying tolls on certain roads, while certain toll roads in the USA offer rental car programs where tolls are automatically charged to the rental company, and then passed on to the renter along with an administrative fee. This can simplify toll payment for tourists driving rental cars.
Verify rental car coverage
Ensure that your insurance, whether from your car rental or personal policy, provides coverage for international travel. Note that certain rental car insurance policies may exclude coverage for specific susceptible components of the rental vehicle, such as tires, roof, windshields, and the underside, under the Collision Damage Waiver. Consequently, you may be responsible for covering an excess amount, known as "car excess," if damage occurs to these components.
Familiarise yourself with the rental vehicle
Utilise in-car navigation features
Some navigation systems offered by Hertz and Avis may include offline maps functionality, allowing drivers to access maps and navigation features even in areas with limited or no cellular coverage. Make sure such features are available as a backup for your GPS device or smartphone app in case of technical issues or traveling to areas without an internet connection.
Stay informed about traffic conditions
Stay updated on local traffic updates and road conditions, especially in areas prone to unpredictable weather or heavy traffic. Utilize features like the "Traffic Layer" on Google Maps for real-time traffic information and the "Terrain Layer" to understand the terrain. Certain navigation systems provided by Hertz and Avis may offer traffic camera alerts, notifying drivers of red-light cameras, speed cameras, or other enforcement cameras along their route to help them avoid traffic violations.
Frequently Asked Questions
How do I get car rental coverage benefits with my travel insurance?
- There are a few ways to get suitable rental coverage benefits in your travel insurance plan. One of the ways is to tap on your preferred travel insurance mobile app, purchase it directly through an airline or travel insurance company's website, or contact your insurance agent. Alternatively, if you prefer a self-directed approach, you can use a comparison platform like MoneySmart to quickly compare the best rates available for you.
Do travel insurance have rental car insurance damage waiver?
- Yes and no. It is best to verify with your travel insurance agent to ensure that your insurance, whether it's from your car rental or personal policy, offers coverage for international travel. It's worth noting that certain vulnerable components of the rental vehicle, such as tires, roof, windshields, and the underside, may not be covered by the company's Collision Damage Waiver in some rental car insurance policies.
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