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Confusion over US car hire insurance could cost travellers dear

18th October 2011 Print

An estimated 440,000 Brits will be heading to Florida for some winter sun this year, many of whom will be hiring a car but different rules governing insurance between the EU and the USA is leaving UK travellers worryingly exposed to open ended liability bills.

Over half of UK consumers have experience of renting a car, but most of these have rented in Europe where EU legislation requires that third party liability insurance is included in the price of the rental. In the US there is no statutory obligation to provide insurance to someone renting a car to cover the damage to the vehicle (known as a Collision Damage Waiver [CDW] and a Loss Damage Waiver).

1.4 million Brits, a third of all British visitors, rented a car in the US in 2010, but a recent survey by, and conducted by YouGov, shows high levels of ignorance about car hire insurance. Three quarters (75%) of British people didn’t know that you need to have CDW and SLI (Supplemental Liability Insurance) when renting in the USA or risk being responsible for the full cost of the vehicle if it’s damaged in an accident, or risk a six figure claim for compensation if there is death or injury to a third party in an accident.

Some rental companies include these ‘waivers’ in the rental whilst others charge up to US$26 / day at the rental desk for this cover. If a waiver isn’t in place then the customer potentially leaves themselves liable for the entire value of the car, plus any towing charges and administrative charges that the rental company may be exposed to in the event of an accident. What’s more, this liability can exist whether or not the accident that causes the damage is your fault or not.

“You need the abilities of a code-breaker at Bletchley to understand car hire rental in the US and Canada,” said Ernesto Suarez, founder and CEO. “However ignorance is not an option when the potential cost for a typical mid-size car if written off is US$$30,000.00!”

More worrying still is liability cover. Most states require some liability cover to be provided, others do not require it at all and rental companies will change their practises depending on the state in which they are renting. State minimum liability levels are typically pretty low, so most companies will offer to sell Supplemental Liability Insurance (SLI and ALI) at the rental desk. Again this can cost up to $20 per day, but will increase the level of cover that you have to $1,000,000. Without liability insurance, travellers leave themselves exposed to huge personal liability claims for any injuries they may cause as a result of an accident in their hire car.
There are even differences using the same company.

For example, if you book a car using the AVIS UK site, most insurances are included with your rental, but if you do it through their US site, you often get a price without the insurance. The same is the case for Hertz, where-as Enterprise generally doesn’t include the insurances when booking even on their UK site, leaving customers to either pay more at the rental desk, or find one of the lower cost stand-alone insurance options available online.

These changes of policy even within the same company makes it increasingly difficult for customers to easily understand what is included in their rental and what is not and the process of shopping around for the best rental deal can easily lead customers to assume that they are booking an all-inclusive price when in fact no insurance is being provided at all.

“With the risks from inadequate insurance so high, we strongly recommend that travellers buy a stand-alone car hire insurance policy from before they fly,” said Ernesto Suarez, founder and CEO. “They can then enjoy absolute peace of mind that whoever the rental company is, whatever state they’re driving in and whichever website they used to book their US or Canada hire car, they are covered”.

An policy for the US and Canada is from £6.99 daily and provides up to $100,000 protection for collision damage waiver, up to $1,000,000 liability protection and a zero excess policy, meaning that there is no need to purchase any additional insurance at the rental car pick-up point.

It also offers more security, than most policies on offer at the rental desk, with cover for Road Rage, Carjacking, Travel Expenses, Hotel Expenses and 60 days continuous cover.