There are a variety of flavours on offer depending on the rental company and the country. Many travellers leave booking a car until they arrive at the holiday destination airport, and do not have the time to think about what may happen if something goes wrong during the rental. This article gives an overview of what products may be on offer.

Third Party Insurance Third party insurance covers damage to passengers and the other vehicles involved in the case of accident. Most companies will include a basic third party insurance in the rental agreement as it will be required by law.

Third party insurance will generally have an excess figure of several hundred Euros, with the figure rising as the car group value increases. Fire and theft will often not be included, so if the car is stolen you will have to pay the full excess amount.

To supplement the third party insurance, any or all of the following insurances may be offered by the rental company:

CDW (Collision Damage Waiver Insurance) CDW Insurance covers damage to your hire vehicle, and usually also the vehicle if it is stolen (in some cases theft insurance may be sold separately). It will usually be charged at a daily rate and may include a small excess (the excess will be a much lower amount than if you had only the basic third party cover). There are items which may be excluded such as tyres, windows, upholstery, etc.

Full Insurance/Super Insurance/Premier Insurance Sometimes companies offer an additional insurance which is a combination of CDW/PAE and may also reduce the CDW excess figure.  The insurance may insure items not covered by CDW insurance such as tyres, wheels, undercarriage, etc.

PAE (Personal Accident Insurance) Some hire companies offer personal injury insurance in the event of accident. You may already have this cover if you have purchased holiday insurance. It may also cover items stolen from the vehicle.

Matt May operations manager at UK based company Blue Valley Car Hire explains “if you are worried about the insurance terms and conditions ask your prospective rental company to give you details in advance of your trip. There are companies who are notorious for charging clients for minor damage which was not picked up at the vehicle check. It is adviseable to search the internet for reviews of car rental companies before you book.”

Blue Valley Car Hire provide car rental at Faro Airport Portugal and car hire at Malaga Airport Spain.

Insurance is a classic example of this.  The four most common types are: collision damage waiver (CDW)/loss damage waiver (LDW), supplemental liability insurance, personal accident insurance, and personal effects coverage.  Most rental car companies will pitch the CDW really hard, as well as the theft insurance.  What you should know is that usually you don’t need either of them.  Before you shell out $15 per day or more for these options, check your normal auto insurance already covers rentals.  The other thing to look up is your credit card’s policy on rentals.  Almost every rental company requires a credit card for payment.  That is because it makes it easy for the company to add charges for “damages” later.   As a side note, because of this, DO NOT use a debit card, ever.  You will have no opportunity to dispute the charges if you get cheated.  Make sure you use a real credit card.  Since you have to use a credit card, see if your credit card offers automatic insurance coverage as long as you charge the rental to that card.  You would be surprised how many do.

The next major rip-off is the fuel purchase option.  The idea is that you pay for a full tank of gas ahead of time so you can return the vehicle on empty.  The catch: it’s virtually impossible for you to use all of the gas in the car, so it’s best to decline the offer and fill up the tank just before returning it.  That way, you only pay for what you’ve used.  Otherwise, the cost is usually far more than what you actually use.

Aside from hidden costs, most rental companies will only rent to someone who is at least 25 years old or even older.  Some companies will rent cars to persons 21 years or older but often charge an additional ten to twenty dollars a day.  Also, only the driver who is renting the car is covered under the insurance, so don’t let a buddy drive because if he wrecks it, you’re responsible.

Keep this basics in mind, and watch out for local taxes.  With the internet, it can be easy to search out the most expensive and least expensive cities and to plan your rental accordingly.  Use all the tools at your disposal, and your experience is much more likely to run smoothly without any unpleasant surprises.