Hiring a car? A quick guide to insurance issues

Bertus Oosthuizen, Head of Short Term at PSG Konsult Corporate (PSGK Corporate) answers some commonly asked questions about insurance coverage when hiring a car.

Is insurance through the hire company voluntary when you hire a car or do you have to take it out?

It is not compulsory to take up the cover of offered by car hire company. There are two options if you don’t:

· You can arrange your own cover via your current insurer or, as an alternative

· Supply the rental company with a guarantee from a reputable financial institution to the maximum value of the class and value of the vehicle as well as supply them with full indemnification against Third Party Claims

If you choose to take out insurance from the car hire company are you insured against all accidents and theft?

Yes, the cover on the vehicle is fully comprehensive and will also include third party liability.

What is the situation if the accident is your fault? Does the insurance still pay? The Insurer will always pay the claim providing the driver complied with the following:

· It is the same driver as the one on the car hire contract

· Did not drive under the influence of alcohol

· Used the vehicle for the purpose for which it is built

· Have a valid driver’s licence

Is the excess similar to the excess you pay on your own car insurance?

The excess structure of the Rental Car Insurance is definitely higher than normal private car insurance but with certain car rental firms you can elect to buy back the excess at a price .

If you are involved in an accident with another vehicle would this insurance cover the other car if there is one involved in the accident?

Yes, under normal circumstances the comprehensive cover would include Third Party Cover.

Sometimes panel beaters give you a hired car when yours is in for repairs. Is there automatic cover on this?

No, you would need to arrange additional cover on the rental because it is NOT automatically included under your Insurance Contract. You can arrange that the current premium you are paying on the vehicle that is in for repairs should be allocated to the rental vehicle. Alternatively some panelbeaters - for a premium - will offer an insurance on the car you hire but be aware that the excess is often very high.

Does the comprehensive insurance offered by the hire company insured against jamming?

“First,” says Oosthuizen, “let’s explain what jamming is.” He says it can take place in the following ways:

· Intercepting the signal to your vehicle with a Jamming Device. The result is that your vehicle is not locked although you are under the impression it is.

· Intercepting the signal and storing the code on the Jamming Device. This means your vehicle is locked but the signal information is on the Jamming Device which can activate the opening and closing system of your vehicle.

· Intercepting the signal while locking your vehicle but the Jamming Device jams the entire electronic system of your vehicle which means you cannot activate your vehicle at all.

Oosthuizen says, “In all three scenarios there is no sign of forced entry or exit so it doesn’t come under the definition of ‘burglary.’ You will enjoy cover if the policy taken out with the hiring company reads ‘theft’ from unattended vehicle rather than burglary.” He explains, “Burglary must be accompanied by signs of violent, forced entry or exit. As we know jamming is discreet and involves no forced entry.”

Any other considerations when hiring a car pertaining to insurance that drivers should be aware of?

Yes, always make sure that the cover does include:

· Third Party Liability

· Passenger Liability (Now restricted to only R 160000 per annum via the Road Accident Fund)

· Check on all the excesses such as motor, windscreen and tyre excess

· Enquire what the cost is to buy back these excesses

Oosthuizen concludes: ‘Always enquire about insurance before you drive off in your hired car. It is not automatic and you need to stipulate that you require it. The last thing you want is to be involved in an accident and find you are not covered or that you are faced with a R10000 excess!’