How to avoid an insurance car hire nightmare

When deciding on which car and home insurer to place our business with, we usually default to the lowest common denominator -price. We are all so price sensitive that we rarely consider excesses or even other really important benefits, like car hire. Are you considering taking out car and home insurance? You might want to read this article to avoid a potential insurance car hire nightmare.

How many cars do you own? One, two, three...?

Well here’s the problem, regardless of whether you own one or two - what will happen if that one car is stolen or damaged? How will you get to work? Maybe you’re fortunate enough to own two cars, but what if your spouse happens to need the second car just as much as you do?

There are a few things you need to know about car hire benefits, included in your car and home insurance policy.

If you crack open your car insurance schedule (the schedule is separate from the policy wording), you will usually see the words ’30 day car hire included’. If you don’t, then it’s because you chose not to pay for car hire. When finalizing your car and home insurance, with a broker, or especially a call centre agent, make doubly sure you have opted for the car hire benefit. It’s far too late, at claim stage, to be querying if the benefit was actually added.

Now here’s the catch: 30 day car hire means exactly that – 30 days. Keep the car for 31 days and you have to pay in the extra day’s fees, from your own pocket.

But what happens if the repair work takes longer than the amount of days your car hire benefit extends for?

It’s a good question and it happens on a fairly regular basis. Your insurer might be lenient and grant you a few extra day’s cover, without an additional charge (provided you give them enough lead time), but for the most part, once your car hire is up, it’s up. Failing to return the vehicle means you will end up being charged for the additional days. If you drive an import (a car that isn’t locally manufactured) you are at real risk if parts need to be shipped, from overseas, and this takes longer than the number of days on your car hire benefit.

Is there anything you can do to counter this potential problem?

You need to try and get the longest car hire benefit you possibly can! Certain insurers are offering up to 60 days car hire, so make sure you ask this question at quote stage.

The take away here is that if your damaged car is still driveable, then don’t be in too much of a rush to swop it for the rental. Rather wait until the panelbeater calls you and confirms they have all the spares ready.

So how does car hire work?
  • You call up the insurance company and they arrange for Avis or whoever to drop a car off
  • The driver then swipes your credit card for the refundable deposit and hands over the keys
  • You make sure the car is in perfect order when you take possession as you don’t want to be held liable for existing damages
  • All toll fees are for your account and it’s wise to fill the tank prior to returning the car. If you don’t, then they will bill you for the amount used.
  • If you damage the car then you are liable for the excess. This means you’ll have your own excess to pay, as well as the rental excess – not nice.
  • The deposit is refunded to you a day or so after you return the hired car.