One of the most onerous and misunderstood aspects about car rentals today is the accident/insurance aspect of it. When you are renting a hire car the rental companies, almost without exception, will try, and sometimes very hard, to convince you that it is in your best interests to add on to the daily rental a collision damage waiver (CDW) cost. There are other names for it but they all mean exactly the same.
Firstly your common sense will tell you that if it is good for you, it can’t also be good for the company at the same time. So, what goes on here? Well, most companies, because of their exorbitant insurance premiums are virtually forced to self insure their vehicles. That means that they bear any accident costs themselves and offset that with the “CDW”. It is far cheaper for them to do it this way than pay the huge insurance premiums for every car. The CDW factor then does become extra profit for the companies in the main and that is why they seriously urge you to take it up. Incidentally, legally speaking, in Australia the precedents in law regarding accident liability is that it rests with the owner of the vehicle unless you are acting as an agent for the owner, and it would be highly unusual for the hirer to be acting as an “agent” for the owner.
Therefore it does require a lot of consideration as to whether or not you pay the extra to reduce your liability. Emotionally it is far less stressful to take the excess reduction and not be driving around with a high excess that has been deliberately inflated in order to convince you that the CDW is a good idea. Practically speaking though, it doesn’t take long for the CDW costs to add up and amount to more than paying the excess in the unlikely event you have an accident. Therein lays the dilemma!
Many people are under the mistaken belief that their normal credit card insurance will cover them for any accident excesses. This is not always the case as in many instances you are not covered for the excesses if the car rental company has offered you excess reduction. This is a very important point and one in which you must be absolutely clear on with your credit card company insurance.
So when the time comes to make your car hire booking, all the afore said needs to be considered carefully and a decision made as to whether or not you will be taking the CDW. Rest assured the car rental company will be pressuring you, in their own interests, to avail yourself of their offer.
Now, when the unfortunate does happen and you are involved in a car accident, there are several things to consider. Firstly I would be approaching the other driver or drivers, regardless of who is at fault, with a view to obtaining their full particulars, including the name of their insurer. Apart from that you need their license number and be sure that it contains their current address. Of course a lot of things here will depend on the severity of the accident, the attitude of the other people and the locations of the accident i.e. is it a busy spot and are you able to leave the cars at the scene? As soon as possible it is wise to contact the rental car company, taking careful note of who you spoke to and when, and seeking there requirements with regard to accident report forms, which are sometimes provided in the glove box of the hire vehicle. Of course the police need to be informed should the accident be serious enough, and unfortunately, this is not always easy to determine.
Most unfortunately along with the trauma of the accident you will probably now have to deal with several extremely competitive and aggressive tow truck drivers. Whatever happens under no circumstances should you allow them to touch your rental car unless you are directed to do so by either the police or the car hire company. All tow truck drivers/companies are paid a highly inflated rate for what is called a “police tow”. This tow will ultimately have to be paid for by someone and that someone could be you. On top of that the tow truck driver/company also receives a commission from any panel beater that he delivers the car to with whom he has an arrangement. Hence the reason for his “keenness” to tow your vehicle! Once he has your car hire vehicle attached to his truck it is very difficult or impossible to get him to release the car.
From this point on you will need to work with the car rental company to sort through all the details and most importantly, what happens next! You will probably have to pay the excess at this point and then set about recovering it should you not have been at fault.