Does rental car excess cover third party insurance?

 

You’re driving along one of Australia’s maaagnificient coastal highways, admiring the gorgeous view and all of a sudden, oopsy, you’ve gone up the rear of the car in front of you. What a catastrophe for just a fleecing moment of distraction! Your bumper is hanging off and their rear bumper is in no better shape.

You know your rental car’s excess is covered by us (lucky ewe!) but what about the car in front? That’s when you need to look into third party cover...

Australian CTP

In Australia, third party insurance - also known as Compulsory Third Party (CTP) insurance or the “Green Slip” is mandatory in all states of Australia. All vehicles must have CTP insurance in place in order to be considered road worthy.

This type of insurance provides compensation for bodily injuries and death to people when your vehicle is involved in an accident. This could include the driver of the other vehicle, pedestrians, cyclists or motorcyclists. However, CTP does not cover for damage to third party vehicles or third party property.

Third party cover varies around the globe

Depending on where you will be driving, the laws for third party insurance will vary.

Most European countries follow a similar car insurance model to Australia. Cars must have liability insurance to be on the roads, which covers damage costs to anything outside of the car, but not the actual car itself.

In countries such as the USA, it is not compulsory for the vehicle owner to have third party insurance. Hence it's your responsibility as the driver of the rental vehicle to ensure that you are covered for third party expenses.

This type of insurance is known as Supplemental Liability Insurance (SLI), which typically insures you against medical costs and property damage to other people you are legally responsible for. So if you're hiring a car in the States, make sure you ask about SLI.

Does your rental agreement cover third party damage?

Most rental car insurance includes cover for third party damages. You are covered for this when you rent the car as the price is usually inclusive of the insurance. But it certainly pays to check. 

You're normally covered for:

* Public Liability which covers injury or death to persons outside the rental car and 
* Property Damage which covers damage to property other than the rental vehicle or renter, drivers' or passengers' property.

Most rental companies stipulate that all accidents involving bodily injury must be reported to the local police department where the accident occurred. The driver is required to complete and file an incident report. In addition, the driver must complete and file any accident reports required by local or state authorities.

It's important to note that the car hire excess you purchase with us does not include automatically include third party cover. An easy way to remember this is we match your rental company's cover. So if your rental agreement includes third party damages and/or third party liability,  then we can cover you for these incidents as well.

Read the PDS 

It’s always a wooly good idea to read the terms of your rental agreement carefully to understand if you're covered for third party damages or not. A few minutes of research could save you some serious dosh!