February 12, 2021
Many of us have arrived at a South African airport while on holiday or for business and driven away in a rental car. But have you ever thought about how insurance works for rental cars in South Africa? Many reputable car rental companies in South Africa offer car insurance as part of your rental agreement. Below is an example of how the car rental company, Avis, manages its insurance.
Avis rental charges include limited cover for passenger liability and third-party liability car insurance. Also included is cover for loss by fire and damage sustained to the Avis car. However, damage caused by strikes or riots may not be included in the cover.
A car rental insurance waiver is when the insurer waives or surrenders the right to claim a specified amount of money from the renter when, for instance, a rental car has been accidentally damaged. Waivers do require the renter to pay out of their own pocket a type of ‘non-waivable liability’ or excess. The lower the waiver rate, the higher the excess amount. Conversely, higher waiver rates mean lower excess amounts.
Avis provides two optional waivers to protect the renter when a rented car is involved in a collision. These are called the Collision Damage Waiver (CDW) and the Super Collision Damage Waiver (SCDW). These are limited waivers, meaning the renter must pay a certain amount of ‘excess’, as stipulated in a rates table. Regarding the more expensive SCDW, a lower excess will be charged to the renter’s account.
This means the renter is not covered at all and will be held responsible to pay for the full cost of any damage to the rental car or its loss.
Avis avoids the risky process of recovering excess amounts from renters by securing the excess or liability amount on the renter’s credit card before they take the car. This secured amount is released once the rental company is satisfied with the condition of the returned car.
Imagine the rental company rejecting all the waivers or cover in the event of an accident just because the renter allowed an unauthorised person to drive the car? There may be an exclusion of cover where the vehicle is not permitted to be driven on dirt roads, or if the renter drives negligently.
The Theft Loss Waiver (TLW) and Super Theft Loss Waiver (STLW) covers the car's theft or a part thereof, e.g., the spare wheel. Loss of personal belongings is not covered. The CDW and TLW waivers provide 80% cover over the weekend.
This article only provides information because car insurance is complex. Please contact a certified, financial advisor for professional advice if you are interested in purchasing a car insurance product.
You have learnt about how rental car companies can provide you with cover, but what about cover for your car? If you require more information on car insurance for your car, contact PMD regarding affordable car insurance, which come with unique benefits such as fixed premiums*. T’s & C’s apply.