Renting a car might seem like a cost effective thing to do in some cases, but when it comes to rental car insurance, you might be spending more than you'd like. Why? Because it's not unusual for companies to charge your for car insurance that you don't need, or to give you insurance with a hefty excess.
If you can’t afford a R20,000 excess for loss or damage to the vehicle then you will probably be thinking about taking out extra insurance to reduce that excess (commonly known as super waiver insurance). And you may even be wondering if you need rental car insurance at all, so we're here to tell you all you need to know!
Do I Need Rental Car Insurance?
Okay, our first step here is to determine whether you need rental car insurance at all. There are two things that you'll need to check out. If you hold a normal car insurance policy then call your company or check your policy fine print to find out if your regular insurance will cover you for rental cars. Some will, some won't.
Secondly, if you plan on paying for your rental car with a credit card, then you should also ask your credit card company if car insurance will be covered. Some major credit card companies include insurance as default when paying for expensive items with your card, so it's worth asking.
In both these cases you might find that you're covered and don't need to think about rental car insurance from a rental company, though you might want to get some extra coverage anyway. And if you're not covered by your normal car insurance policy or by your credit card company, then you'll definitely want to get extra insurance.
Rental Car Insurance: The Super Waiver
Rental companies tend to want to sell you a car insurance policy that they call “super waiver.” And though most rental companies say that their super waiver is not extra car insurance, essentially it really is. A super waiver policy is likely to have a lower excess than a standard policy, but be careful, since it's also likely to cost more to add this kind of insurance in the first place.
Extra car insurance on a hire car, like all insurance, is designed to reduce your loss in particular circumstances. You have to work out if the premium you pay is worth the reduction in your liability. This super waiver might cover, for example, collisions due to ice, which could be great if you're doing mountain driving, but might not be necessary if you're headed to the beach. One thing that a super waiver will do though is lower your excess.
Whether or not you want to pay for the super waiver policy is up to you, but if you can’t afford the big excess that comes with the standard policy, then you should think about taking out a super waiver (since it will have a lower excess).
If you don't want the super waiver policy, but still want a lower excess then the only other way you can reduce your liability is to hire a smaller car because the excess is much higher for larger cars and 4x4s than it is for small cars.
It is important to realise that even with a super waiver car hire contract you will probably still have a substantial excess, though it is about one fifth of that you would have with a standard rental car insurance policy.
Comparing Super Waiver and Standard Car Insurance Prices
So, how do those prices stack up for you? Let's look at some real world numbers. You’ll pay an extra 20-25% for a rental car if you take out the extra car insurance offered by a super waiver contract. For example to hire a Group C car such as a Toyota Corolla for a week you might pay an extra R700 to reduce your excess from R26,500 to R5,500. That's a pretty big difference!
Obviously if you don’t have an accident and you have paid the extra insurance then the extra R700 you paid is money down the drain. On the other hand the extra R100 a day gives you a lot of peace of mind and you know your finances for the next three years are not going to be trashed by someone hijacking your hire car!
Comparing Car Hire Quotes
If you're looking at renting a car with insurance you're going to want to know how much you'll be paying, and the easiest way to get quotes is online. Simply visit a few different rental car sites (check out our article on the best rental car company in South Africa) and get some quotes to find out which is cheapest. But there are a few things that you should keep in mind.
Cheap car hire companies may cost less because the excess you have to pay if you have an accident is higher and the cost of extra insurance in the form of a super waiver contract may be higher too. This kind of thing can make a big difference to how much you'll really be paying.
Also, look for hidden extras such as documentation fees and higher charges for a second driver or a child-seat. Many companies charge an accident administration fee in addition to the excess if your car is damaged, adding up to even more money.
Companies that offer cheap car rentals pay the same for their vehicles and have similar overheads, so the bottom line cost is usually almost the same as competitors that do not market themselves as discount or budget. This means that the real difference in cost often lies in the price of car insurance or other extras- and it's up to you whether or not you want to take the risk of doing without these things. There are other ways to save when renting a car, without needing to go without insurance!
Other Advantages of Extra Rental Car Insurance
There could be some other advantages to choosing that extra super waiver insurance coverage as well. Some car hire companies offer a lower deposit to renters who take out a super waiver contract. This might tip the balance when it comes to cost if you were unsure whether or not to go with the super waiver.
Super waiver car rental contracts also normally include tyre and windscreen damage as well, and if you're looking at driving on unsurfaced roads this is another big plus. Look for special deals for regular customers who take out super waiver contracts. These can include free ‘extras’ such as child seats, roof-boxes or sat navs and are worthwhile if you would be paying for them in any case.
Rental Car Insurance: Bottom Line
If you do need to take out rental car insurance you can end up paying quite a lot, particularly if you do get into an accident and need to pay that big excess. You might think that you're a great driver and so you can skip the extra insurance altogether. The thing is to remember that any accident may well be the result of another driver’s carelessness or even an antelope running in front of your vehicle, and that has no relation to how good your driving skills are at all.
The cost of extra car insurance for rental cars in South Africa is very reasonable when compared to that in other regions such as Europe. The benefits are substantial and the cost is fairly affordable, especially with the high rate of vehicle theft and the high number of accidents in South Africa. Bottom line? Rental car insurance is a great idea, and travelling without it would be foolish and possibly very costly.
Main Subject: car insurance
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