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Car Rental accident insurance is probably the most misunderstood and debated subject for those of us who rent cars. Car Hire companies will always offer and most times with much gusto for you to reduce your liability should you be involved in an accident, this fee is most often refered to as Collision Damage Waiver (CDW) and they will insist that it is in your best interest to take this option.

Normally if something is good for you, how can you believe it could be good for the car rental company at the same time. How does this work? Just like your insurance for your own vehicle car hire companies are charged very high rates to insure their fleet, afterall look at the circumstances they are renting cars to people they know nothing about, they have no driving history on you, they do not know if you drink or take illegal drugs so it is a high risk situation. This eventuates in the rental company self insuring the hire cars. In doing so they take on the cost of the accident damage themselves and offset that expense by offering a CDW to you. This is a much more ecomonical way for them to maintain the rental car fleet and the company do not pay the insurance companies the big premiums for every car. Car Rental companies are in business to make money and this aspect of car rental becomes an extra revenue raiser itself and that is why the sales staff at the car hire branch will do their best to sell you this option. In regards to vehicle accidents, Australian law states that the liability lies with the owner of the vehicle unless you are acting as an agent for the owner, and as the hirer it is therefore unlikely you would come under that clasification.

The bottom line then is that you must be absolutely sure of what your preference is with regards to CDW before you begin to make your booking. If not you will almost certainly be convinced by professional car rental staff to incur this extra cost. You dilemma is do you drive around as strange town in a foreign car with a high excess or bow to the companies wishes and pay the extra daily cost. If you are a regular renter it will not take long to realise that the extra costs will before to long surpass the potential excess payment.

Clients often have the wrong idea when they believe that their credit card insurance covers them for car hire accident excesses. Not always true, you should check with your car insurance company and read your contract and the small print in many cases if you have been offered an excess reduction by the car hire company the credit card insurance may or may not cover you, or may only cover the difference between the two excesses.

At the time of booking is when you should be giving thought to all these things and make a decision as to whether you take the CDW. The car hire company will be doing their best to encourage you to take this option afterall it is in their best interests.

Next we have the situation where the unthinkable happened, a car accident. Assuming no one was hurt, in which case an ambulance should be called as soon as possible, the first objective will be to approach the other driver or drivers and collect their full particulars. This will include sighting their driver’s license and noting its full details. A tip here is to confirm that the address on the license is in fact their current address. If the accident has occurred in a busy location you may need to move the vehicles but it is always best to leave them if possible unless the police instruct you to move the cars. The police will need to be called depending on the severity of the accident or if anyone has been injured.

The accident isn’t the only thing you will have to contend with, the tow truck drivers are very competitive and sometimes extremely pushy. Try not to be taken for a ride, under no circumstances allow them to tow the rental car unless you are given the OK by the car hire company or told to do so by the police. Tow truck drivers or companies are paid a higher rate for what is call a police tow. Someone will have to pay for this tow and that could be you. Tow truck drivers also receive commissions from panel repairs if he delivers the damaged vehicles to thier facility. That is why they are so anxious to get your vehicle off the road it isn’t because they want to look after you it’s because they wish to look after themselves. If he gets your rental car attached to his truck it is almost impossible to get him to release the vehicle.

Try to work with the car rental agency to sort out all the details and a course of action to follow. The normal procedure is that you would have to pay the excess and that would most likely be actioned on your credit card even before you got back to the office. Then you would set about recovering your money once fault had to determined.

Insurance is always difficult to understand if you are not sure ask questions before you drive away in your rental car. Safe Driving.
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