The Negligence Clause

The Negligence Clause

Rent-a-car – very often a wise choice. It saves time, gives more comfort, it is cheaper, wins independence, allows schedule changes, no luggage issues, flexibility etc. It is a basic travel service, but unlike any other, it can turn one in a position of being guilty, unless proven innocent.  In time of car pick-up, the client gives his credit card and agrees for pre-authorization of certain amount. (Usually 200-250 EUR, but could be much more depending on the car company and the car class)  It could also happen that one credit card is not enough and the policy of a contract might require two. Do not think that a Visa Electron might work, even if you got a fortune on it, it is still a debit card. And here comes the spicy part – the insurances. There are three main terms – Damage Waiver, Excess and Theft protection. In many countries they are optional, included or partially included in a basic car hire rate. The Damage Waiver (which is often mentioned as Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW) could be described as  “protection service provided to renters, which removes all financial responsibility for damage to the rental car”. The Damage waiver always goes together with Excess (Collision damage waiver with excess of 500 EUR), which means that if the Excess is conditionally 500 EUR, in case of a damage for 700 EUR, the driver pays up to 500 EUR and the rest is paid by insurer.  However, the companies usually charge the total Excess amount and the explanation is that they will refund in case the repair bill is lower.

Theft Protection

A service that reduces client’s   financial responsibility for loss of, or damage to a rented vehicle due to theft, attempted theft, or vandalism.

You book online and when you go to the car hire office you find out that the slightest trouble might cost a lot. Then the staff tells you about the insurance upfronts (some of them: Super Top Cover LDW, Carefree Personal Protection, Theft Liability Waiver, Third Party Insurance, Fire Insurance, Personal Accident Insurance etc) You are totally confused and logically you want to know if there is some kind of a Full Coverage insurance, which might waive any responsibility. You pay as much as necessary, you sign the contract and you take the car. Of course going to trouble is not obligatory, but if it happens you understand that actually the Full Coverage has a Negligence Clause. Which means that if a damage is categorized as negligence your credit card will automatically be charged. So much for the Full Coverage.

P.S.: Not to mention that if you committed “a road code violation” and it takes six months to the authorities to send it to the car hire office, your card can be saved from a charge only if it already has expired…

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