21 January 2013

How your Age affects Car Hire Excess Insurance

Insurers for Car Hire Excess Insurance use age bands for risk assessment. Too young or old and you can't buy the policy. But how do they handle the boundaries?

Car Hire Excess Insurance is a relatively simple insurance product. You don't have to answer a million questions about your driving history, how long you have lived at your address and when you last fed your cat to buy a policy. They know after all that a car rental company normally has far more to lose letting you drive their car than they do.

The risk factors are largely determined by where in the world you want to hire the vehicle, how long for, what cover you want and what is already covered by the hire company. Driving history, if it's ok by the hire company is ignored. Age however is taken into consideration, mostly by exclusion by stating lower and upper age limits for the policy.

We are seeing an increasing number of policies written for specific age bands targeting younger and older drivers, which is why we ask you for your date of birth on our comparisons. Key ages are:

• 21 – we don't know any insurers who will offer car hire excess insurance to the under 21′s. however there is a travel insurance policy that offers a limited form of cover for those 18 or over
• 25 – by 25 you are out of "young” drivers policies
• 74 – the upper limit on some policies
• 75 – the lower limit on "mature driver” policies
• 84 – the upper limit of the vast majority of policies
• 85 – the upper limit

There are also differences between insurers about how they measure when your birthday falls. Most insurers take your age on the day you buy the policy. So if the upper limit was 84 and you bought the policy when you were 84 that would be fine. Other policies cover you until you reach the upper age limit and then stop. You wouldn't want to buy an annual policy a month before your birthday takes you over that limit.

Odyssey say you can't be over the upper age limit at the commencement of period of insurance. They also cover up to the age of 85 so you could buy an annual 75-85 policy which started a day before your 86th birthday and be covered until you are nearly 87.

Below is a summary of the current terms for our insurers:

(terms correct as of 21/01/2013 and subject to change)

So especially if you are 74, 75, 84 or 85 years old, do check the policy wording to ensure you will be covered when you really need it – when you are hiring the car.

*1 CDW policies are for when the rental car doesn't include any Collision Damage Waiver cover, so rather than covering a £2,000 excess your policy needs to cover the full value of the rental car. CDW policies typically offer between $50,000 and $110,000 of cover.