How to Cut the Cost of Rental Car Insurance

Unexpected charges for damages to rented cars are a common cause of frustration for travelers and holidaymakers. Another cause of frustration is that the “insurance” offered by rental car companies can be very expensive, sometimes costing more than the car rental itself.

But many people are not aware that many travel insurance offers, credit card insurance benefits, and personal liability insurance supplements already include insurance for rental cars.

In this guide, moneyland.ch tells you how insurance for rental cars works, and how you can get insured for less.

What is rental car deductible insurance?

Many rental car companies get partial-casco or full-casco insurance for their cars. The rental agreement can hold you liable to pay for costs that are not covered by the rental car company’s casco insurance – primarily the insurance deductible. Many car rental companies use insurance with a very high deductible.

Rental car deductible insurance covers your contractual liability for the costs that are not covered by the car’s partial-casco or full casco insurance. 

Important: Not all car rental companies get company partial-casco or full-casco insurance for their cars. Rental car deductible insurance generally does not pay out any benefits if the rented car does not have insurance. Typically, rental car companies that give you the option of getting “insurance” for a rented car have full-casco insurance for their cars.

What is full-cover rental car insurance?

Full-cover rental car insurance covers your liability for damage or loss to a rented car even if the rental car company does not have any partial-casco or full-casco car insurance for the car.

Some car rental companies offer full-cover waivers, often for a high fee. But there are also travel insurance offers, credit card insurance benefits, and personal liability insurance offers that include coverage for costs that are not covered by the rental car company’s car insurance.

Does rental car insurance cover third-party liability?

No. Damages and injuries to third parties are insured by the rental car company’s car insurance. Your rental car insurance only covers your liability for accidental damages to the rented car itself that occur while you are renting it.

Should I get the car insurance offered by the rental car company?

Most rental car companies offer “insurance” for an additional fee when you rent a car. This is often called a collision damage waiver (CDW) or a loss damage waiver (LDW). In practice, this often is not an insurance at all, but simply a waiver of your liability for damage to the vehicle. When you buy this optional waiver, the rental car company uses a different rental agreement that does not require you to pay for damages or loss.

Some rental car companies offer this waiver themselves, while others use a collective liability insurance policy from a third-party insurance company.

Many rental car companies offer several different waivers, with the cheaper waivers only covering the basic deductible for casco insurance, and the more expensive waivers covering liability for other hazards like the cost of roadside assistance, damage to glass components, and damages inflicted by other cars or by vandals while the car is parked.

Getting these waivers can make sense because damages to vehicles are common and the costs can be high. The problem is that the additional fees charged for these waivers can be very expensive. In some cases, the cost of getting a waiver can be as high or higher than the cost of the car rental itself. Because of that, it is worth looking into other ways to insure this cost, especially if you travel and rent cars often.

Does my car insurance also cover damage to cars I rent?

No. Swiss car insurance generally covers your car only. It does not cover liability for damages to cars you rent.

Does my travel insurance cover damages to rented cars?

Some Swiss long-term travel insurance offers include rental car insurance. There are also travel insurance providers that offer rental car insurance as a separate policy, or as an optional, paid insurance rider that can be added to travel insurance.

The rental car cover that comes with long-term travel insurance generally applies to car rentals both in Switzerland and in other countries.

You can compare the premiums charged for travel insurance offers using the interactive travel insurance comparison on moneyland.ch. 

There are also travel insurance providers that offer daily rental car insurance. In some cases, this insurance can be cheaper than the waivers offered by some car insurance providers. If you do not need travel insurance, but want to insure a rented car, then daily insurance is worth looking at.

Which credit cards come with complimentary rental car insurance?

Many Swiss credit cards include rental car insurance as a complimentary benefit for cardholders. This insurance covers your liability to the rental car company. Most credit cards that have this benefit only give you rental car deductible insurance. However, a few more expensive credit cards include full-cover rental car insurance.

In almost all cases, you have to use the credit card to pay for a rental car booking in order to benefit from the complimentary insurance. If the insurance you get from your credit card is sufficient to cover the maximum amount that you could be held responsible for – as per the rental agreement – then there is no need to buy the CDW or LDW waivers offered by the rental car company.

Depending on how high your credit card’s fees are, and on how frequently you rent cars, using a credit card with rental car insurance can work out much cheaper than buying waivers from rental car companies every time you rent a car.

Important: In some cases, the car rental insurance that comes with credit cards only applies to car rentals outside of Switzerland.

You can compare the total costs of credit cards and sort cards based on their rental car insurance benefits using the interactive credit card comparison on moneyland.ch.

Does my personal liability insurance cover my liability for damage to cars I rent?

Swiss personal liability insurance offers typically exclude liability for rented cars from their insurance cover. This is true even if your personal liability insurance includes coverage for borrowed cars. Vehicles that you pay to use are normally not included in the borrowed car cover. But there are exceptions to this rule, which you can find in the table below.

The extra premiums you pay to add the borrowed car insurance rider to your personal liability insurance are generally high. For that reason, insuring your car rentals using personal liability insurance primarily makes sense if you would get this rider anyway because you also borrow vehicles from friends and acquaintances.

You can use the interactive personal liability insurance comparison to find the costs of different insurance offers.

More on this topic:
Compare Swiss long-term travel insurance offers
Compare Swiss credit cards
Compare Swiss personal liability insurance offers