In 2023, South Africans travelling in South Africa spent, on average, a whopping 40% of their holiday budget on transport. However, if you’re looking to save a few Rands this festive season, the last thing you should do is skimp on insurance for your rented car. Basically, the insurance rule-of-thumb for a rented car is the same as for your own car: If you can’t afford to replace or repair it out of your own pocket, insurance is non-negotiable.
Don’t get confused though. Car hire companies aren’t authorised financial services providers (FSPs), so they can’t call the cover that they sell ‘insurance’. The contract that they’ll require you to sign will be called a ‘waiver’ (or something similar). Fear not, it’s essentially the same as an insurance policy. A waiver is a legal agreement that limits your financial responsibility for costs relating to repairs and replacements following accidental damage to and theft of the car that you hire. And what’s more, it’s compulsory unless you have personal insurance in place to cover these risks. (More on that below.)
Whatever name it goes by, you must read the waiver Ts and Cs thoroughly, and understand what you are and aren’t covered for, before chucking your luggage in and starting the car. Essentially, personal insurance policies and waivers will both require you to ‘act with due care’, obey the law, and comply with the rules of the road. If you have an accident while driving under the influence of alcohol or drugs, or are driving recklessly or negligently, your claim won’t be covered.
When it comes to rental car waivers you should check whether:
- The terms being offered are in line with the prescriptions of the SA Vehicle Renting and Leasing Association (SAVRALA). The consultant who’s helping you should be able to tell you.
- You’re covered in the event of any loss of or damage you cause to items belonging to third parties. In the insurance world this is known as ‘liability’, and it can run into millions of Rands. Good news: If you have insurance in your personal capacity for your personal car, the liability portion of this cover ‘attaches’ to you, so that you’re covered for third costs, and any associated legal fees, irrespective of what car you’re driving at the time of an accident or incident. So, even if you’re renting a car, you really should ensure that your personal car insurance is current and up-to-date, and you should also check your policy schedule to see how much you’re covered for in case you need to claim under liability.
It’s important to understand, though, that your personal car insurance doesn’t automatically cover the loss of or damage to a rental car in addition to liability.
Your insurer *may* cover rental cars, but the underwriting (all the questions you need to answer when getting a quote) and premium will be in addition to whatever you already have in place for your own car. Most insurers, including King Price, will only consider covering a rented car, if you’re an existing client and even then only under certain circumstances. But, if you’re renting a car for more than two weeks, you should ask us for a quote… It could be worth your while. If this option works for you, the car hire company will ask for proof of cover before handing over the keys.
If you’re considering making a few bucks by renting out your own car, it’s important to know upfront that we (or any other insurer we know of) won’t cover loss, damage or liability claims when the car is being driven by whomever you’ve hired it out to.
Many people make comprehensive packing lists ahead of their trips, and a list is a good reminder to pack all the gadgets and their charger cables, the loadshedding lamps, your medications and, of course, sunscreen, and other important bits and bobs. But, it’s equally important to have, and understand, comprehensive insurance for your rental car. Make this number 1 on your list to ensure that you aren’t liable for big numbers if you have an unfortunate accident on the road.
Click here or WhatsApp us on 0860 50 50 50 for a commitment-free insurance quote.
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Psst… This blog provides general info only, and doesn’t count as financial or product advice from King Price or our legal and compliance experts. Remember, all our premiums are risk-profile-dependent, and T’s and C’s apply. Our most up-to-date KPPD (policy wording) can always be found here.
Our website T’s and C’s can be found here.
