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Common Car Hire Terms

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When hiring a car, you will need to have an insurance to cover against unwanted incidents or accidents that may happen during your rental. Without insurance, you might incur hefty bills if something should happen. If you’re not sure what level of coverage that suits your needs, you can discuss this with your car hire company’s representatives. It’s better to be well protected than not having enough coverage.

First, you need to check if you have coverage when using a car hire with your personal insurance policy. Verify if the coverage is enough and if it includes your choice of hire car and destination. If you’re covered already, it’s not necessary to pay again for the same type of coverage; however, your travel insurance may not include coverage when hiring the car.

Terms used in car hires can be confusing, so here’s a guide on the commonly used terms in car hire companies:

Loss Damage Waiver (LDW) or Collision Damage Waiver (CDW)

Loss Damage Waiver eliminates the driver’s accountability to a part of the vehicle in case of theft or damage. This is a mandatory requirement in Great Britain unless the customers come from US or Canada and already have coverage from their credit cards. For car rentals with Loss Damage Waiver, you only need to pay an excess amount based on the vehicle class, and event when the car was damaged or stolen. If you decide not to have LDW which is a choice for European rentals aside outside UK, you will be liable for the car’s full price.

Extended Loss Damage Waiver

You can obtain an Extended Loss Damage Waiver for an extra daily fee on top of your rental. This helps to lessen the initial excess charge.

Third Party Insurance (TP)

It is an insurance policy for protection against claims of another party. This is purchased by the insured (first party), from the insurance firm (second party) for claims made by other individuals involved in the accident like the passengers, drivers and others.

Excess Mileage

Car hire companies charge a fee, called Excess Mileage, for distances driven that exceeds the maximum allowed mileage which is typically charged on a per mile or kilometer basis.

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Fuel Policy

Car rental companies usually implements the full-to-full policy, which means that the car should be returned full tank since its fuel was full when picked from the branch. If the car is not returned without a full tank, you will be penalized for the refuel at rates higher than the pump prices.

One Way Rental

There are instances wherein clients don’t want to return the car to its original pick-up location but wants to drop it off on another branch, so car rental companies can apply a One Way Rental charge to cover the costs associated with returning the car to its original branch. This should be arranged on the day of reservation. There are cases wherein some requests for One Way rental is not granted.

Period of Hire

It refers to the duration of your rental from the time you leave the car hire branch up until the vehicle is returned.

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