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Thread: Rental Car - Insurance

  1. #1
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    Default Rental Car - Insurance

    We need to rent a car the first couple weeks.

    Some agencies (like Omega) offer insurance:
    CDW Insurance (25yrs +) reduces excess to $0
    It ends up being $10/day.

    Is that insurance worth it? Or will my credit card give me the same (or better) protection?

  2. #2
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    I believe the extra $10 a day reduced your collision damage waiver (or excess) to $0, meaning that if you're in a crash and you need the insurance to cover the cost of the damage, you'll have an excess of nothing to pay instead of $100 or whatever the excess is. I'm not sure how a credit card would insure you, as that's just a form of payment, as opposed to a form of insurance. Paying by credit card will provide you with additional security (e.g. if the rental firm goes bust) but it won't do anything from an insurance point of view.

    Unless you've got a type of credit card I'm not familiar with.........

    P

  3. #3
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    Visa and AmEx both (and possibly some others) have free collision and damage insurance if you rent cars with those cards. AmEx doesn't offer than in NZ, though.

    Is "excess" the same as "deductable"?

  4. #4
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    Quote Originally Posted by denalipop View Post
    Is "excess" the same as "deductable"?
    Um, I'm afraid I have no idea! The excess is what you pay, so in my last car crash (I was rear-ended) the cost of the repairs was 800, but I paid 50 (that's my excess) and the repairs got done - my insurance paid out and then subsequently claimed the rest of the costs back off the man who crashed into the back of me. Does that help? Or am I just confusing the pair of us?!

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  5. #5
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    Yes, denalipop - 'excess' is the UK (and NZ, it seems) word for what in the US is your 'deductable'.

  6. #6
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    Yes, the rental car insurance is worth it IMO as then if you crash or an uninsured driver crashes into you you are not on the hook for the full repair/replacement cost of the rental car.
    Besides, IMO the rental rates are cheap enough as is that the $10-day (or even the rate that has you paying a 500 excess/deductible) is not that expensive.
    Would you really want to hassle with your credit card company from overseas in the event of an accident?

  7. #7
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    The $10 a day may be worth it depending on what the current excess (deductible) is.

    The best way of calculating it is by dividing the reduction in excess by the daily cost - so a $100 excess going to nil for $10 a day says that you are expecting to have an accident once every 10 days!

    A $1000 excess to nil for the same amounts says you expect to have an accident once every 100 days (so just over 3 accidents every year).

    If you look at it like this then you get an idea of whether you think that CDW is worth it.

    The other thing to look at is whether you can easily afford the excess if the worst happened and you didn't get CDW. So could you afford to pay out the excess on the off chance you had an accident? If it was up to $1000 then I could with a bit of belt tightening for a month or so - higher than that and I probably would get CDW depending on the cost / benefit analysis above!

    There are also companies that provide CDW on an annual basis so that you don't need to buy it from the rental company - Insurance 4 Car Hire is a UK based one that I remember that does it - http://www.insurance4carhire.com. Not sure if there is something similar in the US.

    Looking at the Omega Rent a Car site the standard excess is $1000 - I therefore wouldn't buy CDW as I can afford to pay out $1000 and am not expecting to have 3 accidents a year so the $10 a day isn't value for money insurance!
    Last edited by James 1077; 13th October 2009 at 10:53 AM.

  8. #8
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    Okay, let's say I rent from Omega, which has the following insurance options:

    1) CDW Insurance (25yrs +) reduces excess to $0 $10.00 x 4 days
    2) CDW Insurance (Previa, MVP) 25 yrs plus. Excess $0 $12.00 x 4 days
    3) CDW Insurance (21-24yrs) reduces excess to $0 $13.00 x 4 days
    4) CDW insurance (previa,MPV) 21yrs to 24 yrs $15.00 x 4 days
    5) Free Insurance: Excess Liability $1000 $0.00
    6) Free Insurance ($1250 Excess) previa only $0.00
    If I rent a $20,000 car and get the Free Insurance ("Excess Liability $1000), and then end up getting into an accident which totals the car, will I only have to pay them $1000? Is the other $19,000 covered automatically?

    Is this deal typical of rental car companies in NZ, or only Omega?

    I certainly don't mind having a $1000 deductible, if the rest of the coverage is free! But then again, I don't know if NZ car companies have a reputation of charging for scratches and dents which the renter forgets to report when doing the pre-rental inspection. Does that sort of scam happen often over there? I guess a full CDW would make you immune from it, right?

    Also, I'm wondering about liablilty insurance. What if in the process of totaling the $20,000 rental car, I also knock over a sheep, someone's pet cat, and a couple of Aucklanders. In the US, my car was so old that I only had liability insurance, which meant my insurance company would pay any of my victim's medical expenses (including my own). Is there such thing as liability coverage in NZ? If so, how do I get it for a rental car? Or is that something I need to do separately, perhaps through AA?

  9. #9
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    Quote Originally Posted by denalipop View Post
    Is this deal typical of rental car companies in NZ, or only Omega?
    I've found that other rental car companies have higher excess amounts, in the range of $2000 - $3000. Omega's lower excess may be the result of it's cars often have much higher milage on them. I go with Omega if they happen to have offices in the places I need.

  10. #10
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    Quote Originally Posted by denalipop View Post
    If I rent a $20,000 car and get the Free Insurance ("Excess Liability $1000), and then end up getting into an accident which totals the car, will I only have to pay them $1000? Is the other $19,000 covered automatically?

    Is this deal typical of rental car companies in NZ, or only Omega?
    This is standard insurance in NZ - the other $19,000 is covered by the rental car company's insurance.

    Quote Originally Posted by denalipop View Post
    But then again, I don't know if NZ car companies have a reputation of charging for scratches and dents which the renter forgets to report when doing the pre-rental inspection. Does that sort of scam happen often over there? I guess a full CDW would make you immune from it, right?
    I've never encountered it anywhere - but then I also make a fuss of being able to spend a decent amount of time checking the car and make the car rental company aware that I have done so.

    But full CDW will make you immune as you won't be charged for any scratches.

    Quote Originally Posted by denalipop View Post

    Also, I'm wondering about liablilty insurance. What if in the process of totaling the $20,000 rental car, I also knock over a sheep, someone's pet cat, and a couple of Aucklanders. In the US, my car was so old that I only had liability insurance, which meant my insurance company would pay any of my victim's medical expenses (including my own). Is there such thing as liability coverage in NZ? If so, how do I get it for a rental car? Or is that something I need to do separately, perhaps through AA?
    Liability insurance for accidents to people is covered automatically by ACC - even as a tourist you get this cover so ACC will provide liability cover for accidents to the couple of Aucklanders you knock over (plus to yourself if you have any sort of an accident whilst in NZ). It doesn't cover property though so knocking over sheep and cats will be covered by the rental car's insurance (so $1000 excess / nil with CDW).

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