► How do car rental insurance work? A simple and understandable guide

Everything related to auto insurance is often a bit complicated to understand. Therefore, here we offer you a simple and understandable guide that will make sure you don’t miss it.

The first thing you have to know is that rental cars do not have insurance since they have private cars, but the coverage and conditions are usually somewhat different from what you might be used to.

Reading: How does a rental car work with insurance

The conditions of the coverage depend on each supplier, even though they have the same name, and they must be specified in the terms and conditions that you sign when you pick up the car.

insurance excess

The insurance deductible is the maximum amount of money that you will have to pay in case the rental car is damaged for any reason: damage, accident, theft…

To give you an idea, the amount of the deductible -which has to be detailed in the terms and conditions- can vary from a few hundred to a few thousand dollars. the excess amount is usually based on the different categories of rental cars. Some companies, especially low cost ones, can retain this money on your credit card when you sign the rental contract.

When you return the car, the company checks that there is no damage and everything is as you signed the contract. If everything is correct, they do not charge you anything. if there is any problem, the company will charge you the corresponding part of the franchise amount, but never more. unless it is proven that there has been negligence on your part. in that case, the coverage and the excess are no longer valid and you will have to bear all the expenses.

The same thing happens if the company has put a hold on your money on your credit card. if there is no problem, they will unblock the held deposit and will not charge you anything. depending on the company, this can take between ten days and a month, since they usually wait a reasonable time in case of a fine or defect. Keep in mind that while the money is withheld, the rental company will not deduct it from your account, but since it is blocked, you will not be able to use it either.


The deposit is a withholding applied by companies to cover their backs in case they have to charge you fines or penalties. and each company decides whether to keep it or not.

What if I don’t want to be held? You have to know that companies can apply two types of withholdings, which seem the same but are not. On the one hand, there is the deductible, associated with the coverage, and on the other, the deposit.

In order to correctly distinguish the two terms, we invite you to read our article on the subject: what is the difference between franchise and deposit or deposit when renting a car?

To avoid the excess you can buy the premium insurance at the car rental counter. the price is higher, but the coverage will take care of all the damage and you will keep less money on your card.

so I’m interested in excess? How does this work? Let’s see a real case. you want to rent a small car in dublin for three days. the “full risk insurance with excess” costs around €70, with an excess of €267. the “all-risk insurance without excess” costs about €90. to save, you decide to opt for the “franchise” option. if you didn’t have any problem (fingers crossed) you would save €20. but let’s say you have a small hit that causes you €250 worth of damage. well, you have to pay €250 for the repair. you save €20 at the beginning, but in the end you pay €250. is it compensated?

You can assess it based on your claims history: if you have more than one portion per year on your regular insurance, the excess is generally not profitable. And remember that, statistically, your accident rate increases with a rental car.

What kind of coverage does car rental insurance have?

compulsory insurance and civil liability, tpl

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tpl, or “third party liability”. All rental cars are required by law to include compulsory automobile insurance and complementary civil liability insurance for damages to third parties arising from the use and circulation of the vehicle.

It is the well-known “tpl” insurance and it is already included in the car rental contract. covers the driver’s liability for damages caused to other people’s property, but not to the rental vehicle. it also includes injuries that the driver, you, causes from other people, inside or outside the rental vehicle.

When signing the car rental contract, you are also signing, and in a mandatory way, this insurance.

Compulsory car insurance and supplementary civil liability insurance are mandatory and included in the rental contract.

partial collision coverage, cdw

Partial Collision Coverage is also known as CDW or Collision Damage Waiver. is an optional coverage that covers damage to the rental vehicle. most companies, but not all, include it in the price of the car rental, in addition to other mandatory insurance.

is associated with the excess and, therefore, in the event of an accident or breakdown of the rental vehicle, the maximum you would have to pay would be the amount of the excess. As a general rule, CDW does not cover damage to tires, tires, underbody, windows, locks, broken or lost keys or remotes, upholstery, clutch, towing charges, or damage caused by fueling the wrong fuel. in any case, we remind you that each company defines what cdw coverage it includes or does not include. you will need to review the terms and conditions of your contract.

cdw is an optional coverage that covers damage to the vehicle. It is usually included in the contract but each company defines what it includes.

super partial collision coverage, with or without excess

scdw or “super collision damage waiver”, or whatever name the company came up with. It’s like CDW, but with vitamins. the equivalent of our beloved comprehensive insurance. you can reduce or eliminate the excess.

usually includes things the cdw doesn’t include, such as damage to windows, tires, and underbody. as always, you will have to read the terms and conditions to check what is included and what is not because it changes with each company.

remember that if you contract the scdw without excess, no matter what happens, the insurance covers everything and you will not have to pay anything. If the company allows it, hiring this coverage you could pay with a debit card. and vice versa, if you wish to pay with a debit card, you are obliged to contract the “coverage without excess”.

scdw is an optional coverage similar to comprehensive insurance. may or may not be associated with a franchise.

protection against theft, tp

also called anti-theft coverage or tp or “theft protection”. This coverage covers the loss of the car when it has been stolen or attempted theft.

In most cases, this coverage does not fully cover the value of the car and is associated with the excess. therefore, in the event that the vehicle is stolen, or attempted to be stolen, the most you would have to pay would be the excess amount. In addition, the anti-theft coverage also does not cover personal effects. however, some travel, home or credit card insurance could take care of these unforeseen events.

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be careful, because, in case of negligence on your part, the company could demand the full value of the vehicle.

the tp is an additional coverage that covers the loss of the car when it has been stolen or attempted theft. is associated with excess.

personal accident insurance, pai

pai, or “personal accident insurance”. You can also call it “occupants insurance.” It is an additional coverage that covers the damage or death of the occupants, which is not usually covered by other coverages. This coverage can also cover the theft of personal items found inside the trunk.

some travel, home or credit card insurance could solve these problems.

the pai is an optional coverage that covers the occupants.

extended roadside assistance coverage, rsn

This additional coverage covers roadside assistance but does not cover the problem or breakdown. It is very useful if you have a problem with the car.

rsn is an optional coverage that covers roadside assistance.

what do we recommend?

First of all, remember that all car rental companies are obliged to include compulsory and civil liability insurance in their contract. Most companies, but not all, also include the CDW. is something.

all car rental companies are required to include compulsory and civil liability insurance in their contracts.

if you ask us, we recommend that, without a doubt, you also contract coverage without excess. why? because no matter how good a driver you are, you are renting a car that you do not know. the dimensions are different, as is the handling and reaction of the car. In addition, you will drive on unknown routes, and this adds a factor of uncertainty that will make your driving less safe.

We recommend you rent your car at a rental car comparator such as carrentals.deals and buy coverage without excess at the counter when you pick up your car.

do you have it clearer now? So here’s our last piece of advice:

always remember that these coverages, and the excess, lose their validity if you cause the damage intentionally, negligently (prohibited or reckless driving) or if you drive under the influence of drugs or alcohol… you have to pay the full amount of the damage !

The coverages and the excess lose validity if you cause the damages intentionally or negligently, and you will have to pay the totality of the damages.

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