We have put this guide together to help you learn everything you need about New Zealand car rental insurance. Without a doubt, planning a road trip around New Zealand is the best way to experience what this country has to offer. Renting a car and driving your own route gives you the freedom to explore the places most important to you at your own pace. Whilst the planning stage is a lot of fun, you need to consider the responsibilities that come with a road trip. We are referring to the not exciting yet important topic of car rental insurance.
Car rental insurance will protect you in the case of any accidents or damages to your rental car and will give you peace of mind on your road trip. In this guide, we will explain about types of car rental insurance available, the insurance terms you need to understand and the factors to consider when deciding on which type of car rental insurance to choose. This guide can be applied to exploring any car rental insurance policy in New Zealand.
Is it compulsory to have car rental insurance?
Yes. In New Zealand, it is a legal requirement for all car rental companies to provide their customers with standard insurance coverage. Coverage usually includes collision damage, theft and third-party collision damage. This means you are covered as the hirer if you are at fault in a collision. Insurance will be part of the daily hire charge of your rental vehicle. However, it is important to read the fine print to understand exactly what you are covered for and what excess you need to pay in case of damage or theft. Car rental insurance coverage will vary from different car rental companies.
Important Insurance terms to understand.
Below is a list of terms you will come across when hiring a car. Different rental companies will use variations of the same word, it is important you understand all terms when choosing your car rental insurance.
Liability Limit/Excess/Deductible
The Liability Limit is also referred to as an excess or as a deductible. This is the maximum amount you will be charged if your hired vehicle is damaged or stolen on your trip. The process is that you are charged a best estimate of the cost of the repair or replacement of the rental vehicle to the value of your liability or excess. Some car rental companies also offer the option to have zero excess where you are not responsible for paying anything if the rental car is damaged, however, this option will increase your daily hire rate.
Bond or Deposit
The Bond, also known as a deposit, is the amount that will be pre-authorised on your credit card at the start of your car rental hire. It is held for the duration of your rental period. The bond covers the rental company in case the vehicle is returned damaged. At the end of your trip your money will be released provided the rental car is returned undamaged and all conditions have been followed. Please note that most car rental companies will only accept credit cards. Depending on the type of vehicle and duration of rental a bond may not be required.
Exclusions
Exclusions outline what your car rental insurance policy does not cover. Types of exclusions may include breakdown, roadside assistance, windscreen damage, damages by drinking under the influence, reckless driving or damaging the hired vehicle by fitting snow chains of roof racks. It is important to be aware of what exclusions apply when you are hiring a car.
How to choose the best car rental insurance for you.
Coverage:
The type of coverage you choose depends on what is most important to you and the amount of risk you are willing to take. Make sure you choose a policy that will cover you at least for any major potential costs such as collision damage, theft, or third-party liability.
Exclusions:
It is important to understand what your policy does not cover so you will not have an unexpected setback on your trip. For example, you do not want to chip the windscreen and then must budget for windscreen repair instead of a bungee jump!
Cost:
It is best to compare the levels of car rental insurance from different companies. You will see the daily rates will vary depending on the level of insurance coverage. To bring down the total hiring cost, book far in advance and check out if any car rental companies offer relocation deals.
Excess Amount:
Review the different excess amounts that apply to different levels of car rental cover. You are responsible to pay for this amount if the rental vehicle is damaged. Excess amounts can range from $300 - $3000.
Read the terms and conditions:
Remember to read the fine print, the terms, and the conditions of your rental agreement. You will have much better peace of mind knowing exactly what risks you are covered for.
We hope you will find this guide helpful; car rental insurance needs to be considered when planning a road trip in New Zealand. It gives you the opportunity to enjoy your road trip with peace of mind. With the right car rental insurance policy, you will not have to worry about the cost of unexpected incidents. If you would like to learn more about the car insurance cover, we provide at __Mode Rentals you can find answers to our most common questions in our FAQ section.
Happy & safe travels!
_mode Rentals team.
