We have put together this guide to help you learn everything you need to know about New Zealand car rental insurance. We believe renting a car and driving your route is the best way to experience what this country has to offer. While the planning stage is a lot of fun, understanding the ins and outs of car rental insurance in New Zealand is important to ensure your trip is carefree. But don’t worry, Mode Rentals is here to guide you through this essential step, ensuring your adventure in Aotearoa is stress-free.
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. We, at Mode Rentals encourage you to delve into the specifics of your cover. In this guide, we will explain about choice 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.
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 cover. 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.
Important Insurance terms to understand.
Navigating the world of car rental insurance can sometimes feel like learning a new language. Here's a breakdown of essential terms to help you when booking your rental car:
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. For example, if you select the __mode Peace of Mind level of cover, you will pay a daily amount to reduce your level of liability to NZ$600 maximum. If NZ$2000 of damage is done to the vehicle your liability is capped at your NZ$600 bond (if you have met the terms and conditions) or if the cost of repair is only NZ$200, you get the remaining NZ$400 of your bond returned to you. It is not always possible to get repair costs the same day you return the vehicle
Bond or Deposit
The Bond, also known as a deposit, is the amount that will be pre-authorised frozen on your credit card at the start of your 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 Mode Rentals, we accept credit cards and debit cards to hold your bond at the start of your hire and for the duration of your rental. Be mindful when planning and budgeting, if you opt to select the liability level with the lowest level of cover you will have around NZ$3,000 frozen on your credit card. When you return the vehicle undamaged this amount is released, however, your banking institution can and does take days, sometimes weeks for this amount to be unfrozen from your credit card. When you return the vehicle undamaged this amount is released. However, your banking institution can and does take days, sometimes weeks for this amount to be unfrozen from your card. Check with your banking institution before you leave for your trip. If you plan to travel and rent several vehicles you might want to get a second credit card use for this purpose.
Exclusions
Understand what your car rental insurance does not cover. Types of exclusions may include if the driver is at fault, damages by drinking under the influence, reckless driving or damaging the hired vehicle by fitting snow chains or 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 that your selected level of liability will cover you at least for any major potential costs such as collision damage, theft, or third-party liability.
Exclusions:
When reviewing your car rental insurance options, it is important to understand which conditions fall outside your coverage so you can plan accordingly. Review the list of exclusions for Mode Rentals here.
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. At Mode Rentals we offer lower excess from NZ$600.
Read the terms and conditions:
Remember to read the fine, we are all busy and often don’t read the small print but take the time to read the T&C’s of your rental. Reading through these means you can pick up your rental car and enjoy your travels with peace of mind.
We hope you will find this guide helpful; if you would like to learn more about the car insurance coverage, we provide at Mode Rentals you can read about it here.
Ready to start planning your road trip? Book your rental vehicle now.
Happy & safe travels!
_mode Rentals team.
