Insurance and reduction of financial liability when renting a car

It is not difficult!

At first glance, the topic does not seem easy. However, I have prepared this text in such a way as to gently go through the complexities and quickly understand the essence of the matter.

Questions, answers and important information...

...which are worth knowing before renting a car.
Here I have collected the most important information, without which renting a car will be more difficult and may cost you more than it should. There is a lot of information, but I will try to present it as simple and logical as possible. I recommend reading everything at least once. Then you can always come back to them if necessary, but first you need to know that they are here.
After reading the entire content, renting a car will be much easier for you and will not cause unnecessary fear.

Before renting a car

Before you dive into the abyss of car rental deals, there are a few things you need to know. First for your own safety and second for the security of your wallet.
It is obvious that when renting a car, you get your hands on a fairly expensive item, and at the same time very exposed to damage or failure. It doesn't even have to be your fault. Just a coincidence, such as a stone, which at any moment may pop out from under the wheels of another car and hit your car, scratch the paint or break the windshield. Or, in a parking lot, a car parked next to you may catch on your exit and leave a thick scratch. You might not even be there. You may not even know it. There are many examples.
A rental company that gives you its car must protect itself somehow. Loan agreements are usually long, multi-page documents, drafted in legal language, most often in a foreign language. When renting, you have maybe one minute to read it and sign the document. Of course, someone will say that you can try to read the contract template in advance, before borrowing. Yes you can. However, I do not know anyone who would be able to read contract templates from several dozen rental companies in advance and finally choose one. It's even a pity to try.

There is no miraculous way to get rid of the responsibility for the property entrusted to you by the rental company (although for an appropriate fee, this responsibility can be passed on to the insurance companybut more on that).
However, there are methods and schemes of conduct that allow for risk reduction and maximum safe car rentalwithout having to go into the content of the contracts. I will describe the entire process as briefly and specifically as possible.


A rental company, when giving a car to you, basically has to take care of one thing: to secure financing for the repair or purchase of a new car in case the car is damaged or stolen.
Of course, the potential financier is you (and insurance)! It's clear. You take the car, you are responsible for it.

So what does the rental company do? When renting a car, they ask you for a credit card with a sufficiently high limit, which in case of problems will be a source of money for them to finance the repair. The appropriate amount is put on the card deposit, then you sign the contract, get the keys and go. depositis the first very important detail that you must pay attention to when browsing through the offers.

What is a credit card deposit?
The deposit is the amount that the rental company blocks on your credit card. This amount does not disappear from your card. It is still there, but it is not usable.

Let's assume you have a credit card with limit of EUR 1000. You rent a car from the rental company, and the rental conditions contain information about deposit in height 800 EUR.
You pick up the car. Then the rental company will make a deposit on the card when picking it up: according to the agreement, EUR 800. There is still 1000 EUR on your card but 800 EUR is locked and until the lock is released you cannot use these funds. Available you have 200 EUR left.
If you had a plan to use the same card to pay for a hotel that costs e.g. 400 EUR, you will not succeed. The deposit will be released at the earliest approximately 24 hours after the car is returned, and it often takes longer than a week. It is worth remembering and it is best to have a different (debit) card or a correspondingly higher limit on the credit card to pay for other obligations.

What is the deposit on the credit card for?
In this way, rental companies protect themselves against dishonest customers. If the customer does not fulfill the terms of the contract, the rental costs will be deducted from the deposit. Suppose you are 8 hours late to return your car. The contract provides for an additional fee for this. Regardless of your will, the rental company can collect an appropriate amount from the deposit.

Another example: You picked up the car with a full tank and returned it with an empty one. The rental company charges the value of a full refueling and additional service costs. Currently, it works out more or less as if a liter of fuel cost EUR 2. For example, a fuel tank of 50 L * 2 EUR/L = 100 EUR. This is approximately how much will disappear from the deposit. There are many examples (scratch on the car, broken mirror, broken window, damaged upholstery, etc.).
The amount of the deposit that rental companies place on the card is usually equal to the amount of the so-called deductible. Own contribution is the next very important issue that you need to know and check before renting.

Own contribution

In addition to the deposit, which is blocked directly on your credit card, renting a car involves taking on a commitment of the so-called own share.
The deductible applies in the case of:
- destruction or damage to the car
- car theft
Each rental company individually sets the amount of the excess. Separately for destruction and separately for car theft.
Own contribution – in short – is the maximum cost that you undertake to incur if one of the above events occurs (i.e. destruction or theft).
The assumption is that if the costs resulting from the removal of damage are greater than the excess amount accepted by you in the contract, then you are responsible only up to the amount of the excess, and the remaining costs are covered by the insurance.
Currently, virtually all rental companies include the cost of this insurance in the basic price of the vehicle.


On various websites you will come across the names and abbreviations of various insurance policies. You will find their explanation below.

Vehicle damage insurance - CDW
This is the basic, compulsory insurance that covers the vehicle (it is often called Full Insurance on the rental websites, which can be misleading, I am sensitizing, it is a common practice).
The practice of calling the basic insurance full insurance is probably aimed at suggesting to the client that he is purchasing a better insurance package at a similar price. Then the offer seems more attractive, but in reality it is not. So it is worth checking whether the insurance called full is insurance CDW or actually full (SCDW - about which I will write a little below).
I did not find an offer where the insurance would be subject to a surcharge. Everywhere it was at the basic price of the vehicle.
CDW is an abbreviation of the English name Collision Damage Waiver. Having this insurance limits your liability for damage to the amount of your own contribution.
However, in order not to be too colorful, this insurance usually excludes: windows, tires and chassis. There may be more exceptions. This means that if, for example, during a collision, damage has touched elements that are excluded from insurance, you will pay extra for their repair.

IMPORTANT! If you drove under the influence of alcohol or drugs, no insurance will apply. You pay the full amount of the repair costs from your own funds and will not receive any compensation from insurance.

Theft insurance - TP
It is an insurance which, in the event of theft of a vehicle, limits your financial liability to the amount of your deductible.
The name of the insurance is short for the English version Theft Protection.
The cost of this insurance is included in the basic vehicle rental price.
I did not find an offer where the insurance would be subject to a surcharge. Everywhere it was at the basic price of the vehicle.

Full damage insurance - SCDW
This type of insurance completely or partially removes your liability for damage to the car and this is true full damage insurance.
If you want to throw off the responsibility for possible damage to the car, look for exactly such offers, with full insurance. We care about such offers the most and we are looking for such offers.
The name comes from the English version: Super Collision Damage Waiver.
After purchasing this insurance, your liability is reduced to zero, less often to a symbolic amount of around EUR 100 - 500 (depending on the brand and price of the new vehicle).
The rental companies that the basic insurance wrongly (or intentionally call) call this type of insurance: All Inclusive ..., Super ..., All Protection ... etc.

When booking on comparison websites, you can buy full insurance with each rental SCDW. However, you should be aware that this is an insurance that you buy in the comparison website, not in the target rental company. What does it mean? This means that if there is damage or theft of the car, the car rental company will charge your account up to the amount of your own contribution, and for the reimbursement of this amount under your insurance, you must apply to the comparison site with which you took out the insurance.
The solution that eliminates this problem is to search for an offer in the comparison engine that already includes full insurance SCDW. This is clearly stated on the offer. By choosing an offer in which it is already included SCDW do not take out insurance, which is additionally offered by the comparison website, because you do not need two identical types of insurance.

Travel Insurance - PAI
Often, when renting, insurance for people traveling with a rented car is also offered. It has nothing to do with the car itself, it only applies to people. If you buy insurance for yourself before traveling, you do not need it.
The abbreviation comes from the English name: Personal Accident Insurance. This insurance is often included in the package with SCDW.

Other insurance
Some countries (such as Iceland) require additional insurance, such as:
- insurance for damage from gravel and chips – GP
- sand and ash damage insurance – SAP
They are related, for example, to road conditions typical of a given country (many dirt roads) or environmental conditions (volcanic eruptions are difficult to predict). Therefore, it is worth knowing that sometimes you can come across unusual insurance coverage.

Summary - what are we looking for?

I realize that what I have written so far is a solid dose of knowledge and it is difficult to grasp it all at once. However, there is no need to do so, because you can always come back here and dispel any doubts. Besides, I will soon gather everything together and reduce it to a few key phrases. This will definitely make your life easier and will allow you to analyze all offers very effectively.
So let's think: what are we looking for? We are looking for a car rental offer that is as cheap as possible and at the same time safe for us.
In practice, this means that when choosing an offer, we check:
- price (you know)
– insurance (preferably if it is full insurance, i.e SCDW)
- credit card requirements (is it needed and how much is the deposit)
- amount of own contribution

Four key things. If all five meet your requirements, you can start analyzing the offer more deeply, checking less important things, such as mileage limits, fuel policy, etc.

Where to look for car rental offers?

I definitely do not recommend searching and analyzing the websites of each local rental company separately. I did it for the purposes of various blog entries, but after a few hours of analyzing the websites of various rental companies, I simply gave up. Without strength and with a huge headache - I collapsed. I just let out a sigh of relief that it was over.
Searching websites in search of regulations, price lists, annexes to regulations and analyzing them is a nightmare. Of course, information that is inconvenient for themselves, which may discourage customers, the rental companies hide very deeply. Getting to them is not easy at all. I got through it somehow.
However, I did it for one very specific purpose. I wanted to check if devoting so much time and work would give me a better effect than using a good car rental comparison website.
Ultimately, it turned out that my work did not bring any better results. I only made sure that a good price comparison site allows you to obtain an identical or even better effect in just a few moments.

Well, you will ask - but which comparison engine is good?
I will propose two comparison engines and I will describe both briefly.

Discover Cars - [click]
I consider this comparison engine to be definitely number 1. For many years, I considered the search engine to be such, and today I am listing it in second place, but a lot has changed some time ago. Discover Cars has made a giant leap forward. The enormous work they did brought great results. First of all, they created a great interface, highlighting all the information most important to the customer. You don't have to dig deep into the regulations. Everything is out in the open, available immediately. Secondly, they added a set of great filters that allow you to search effectively with two or three clicks (as can be seen in the short instructions at the beginning of the post). Thirdly, in addition to large chain companies, they have added a lot of local rental companies to their database, giving us huge opportunities to choose offers and creating competition between suppliers.
Database of local rental companies I recommend Discover Cars it's really impressive. The vast majority of important local companies offering car rentals are located here. This is great news for us. We have in one place what we wanted most, i.e. the best local companies offering good cars at good prices. Companies rated low by customers disappear from the offer after some time, so the search engine itself eliminates the weakest suppliers.
So I recommend starting your search with Discover Cars.

Rentalcars - [click]
Known to everyone for years, a global giant and the world's largest (?) car rental offer comparison site. However, it has a weak point. It specializes in obtaining good prices, mainly from the largest, globally operating rental chains. In many places, the Rentalcars offer has significant gaps when it comes to smaller, local rental companies. So I suggest you come here secondly, just to verify whether the offer found on Discover Cars is really the best. Large chain companies sometimes offer periodic price reductions and you may be lucky enough to get one. Most often, however, the result with Discover Cars will be better.

Local rentals
Local rental companies are, on the one hand, a chance for cheap and good rental, but on the other hand, they are a big threat. These are often small businesses offering attractive rental prices and having only a few cars. Most often, their cars were bought at least a few years ago and used constantly until they broke down. I had the pleasure of renting a car from such a rental company and then I learned a solid lesson.

In Madeira, I received a car with a burnt clutch and worn brakes. Starting uphill was hard work, and driving on steep serpentines was breakneck and dangerous. It was especially dangerous downhill. Driving in gear and engine braking were not possible because the clutch was disintegrating. Things happened to him that I don't even want to remember anymore. And the brakes? They almost didn't work... It was a nightmare.
I decided that I would never take a car from such a small rental company again. I don't want to spoil my holiday again by getting some scrap metal for a few euros cheaper. Never again!

So where to get a car? In practice, the following solutions work much better:

- solution one: you take a car from a large chain rental company that must meet the standards and have an appropriate policy when it comes to maintaining the quality of the fleet. The advantage of this solution is the low probability that you will get a car in a bad technical condition. The most common disadvantage is that the car usually costs the most from the big chain rental companies.

- second solution (preferred by me): you take a car from a local rental company, but not quite a small one, but one that already has an established position on the local market. There are usually at least two or three such local, competing large players on each island. The definite advantage of this solution is a very good rental price and a low risk of receiving a poor quality car. Where to look for such offers? You already know the answer. I provided the addresses of the comparison sites above.

- third solution (easiest): sometimes I give direct contact details to local companies that I know, have tested and can recommend. If I know such a company, you will always find it somewhere in my posts

Car rental guide

If you are looking for a simple way to rent a car cheaply and safely, be sure to read this entry: Car rental without a credit card and without a deposit – [CLICK]. I think it will make things easier and clearer for you!

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