Do I Need Insurance for Car Rental in Madrid

When you think of a holiday in Spain, you undoubtedly don't think of the insurance you'll need if you're hiring a car. When you do, the rental car company will usually include basic cover as part of the deal. But does this include everything you need?

Not only is understanding the terminology around car insurance confusing, but knowing what to book, how to book it and what documents to take can cause an endless headache. This article will run through everything you need to know about hiring a car in Spain, the type of car hire insurance you need and whether you need car hire excess insurance.

What do I need to know about hiring a car in Spain?

You've booked your holiday and now you're ready to start searching for a car hire that will get you from A to B in Spain. Before you begin, there are a few questions to think about:

• Will you use an online broker?
• Will you use a UK-based or Spanish-based car hire company?
• What is your budget for hiring a car?
• What documents will you need to bring?

Booking a hire car through an online broker

An online broker for car hire allows you to easily compare the different levels of cover, the differences in costs, vehicle types and insurance features of many car hire companies at once.

Booking through a car hire broker is often the best way to find the deal you want and the circumstances you prefer, e.g. returning the car with a full tank as opposed to an empty one.

Keep in mind that the online broker is a third-party sales agent. This means that if you have break down or a car accident while in Spain, the car hire broker you chose will not be able to assist. You will need to go directly to the car hire company that you chose through the online broker.

Before you book through an online broker, double check the price on the rental firms' own website as many will match the price of online brokers to compete. Booking directly through the car hire company cuts out the middleman.However, be aware that you may be offered excess cover at multiple points in the purchase journey – so if you're already got excess cover with insurance4carhire or another provider, you should decline this.

Main costs of renting a car in Spain

You've browsed the selection on a broker site and selected a car with the cover you need that's within your budget. What can happen if you're not careful is that you end up buying unnecessary add-ons and insurance that costs more on top of the price you thought you were going to pay. Here are some ways to avoid hidden costs and save money when hiring a car:

• Stick to the most basic package that they offer and opt out of any add-ons that the car hire company attempt to sell you. Car hire companies profit hugely from these add-ons, like collision damage waiver insurance – also known as an excess waiver or excess insurance. Once you've booked your hire car, book separate car hire insurance through an independent company as this will be cheaper.
• Refuse the excess insurance that the car hire company tries to tell you at the desk. Their excess cover will usually be more expensive compared to buying independently. Research from insurance4carhire showed that customers save, on average, just over £100 by purchasing excess cover through insurance4carhire as opposed to a car rental company*. They will mostly likely say that their insurance is compulsory, however this isn't the case. Tell them that you have already purchased a policy and therefore won't be needing theirs.
• Book a hire car as far in advance as you can. The cost of hiring a car in Spain can be much dearer if you book it last minute. Purchasing a few months before your holiday, for instance, could save you upwards of £100, giving you a bit of extra spending money.
• Take pictures of the car, both inside and out, before you drive off and when you return it. Once you've done this, get someone from the rental company to sign a piece of paper stating all the damage that is currently on the car. This, as well as the photos, will act as proof if the car hire company attempts to charge you for bumps and scratches that weren't your fault.
• Stick to having one driver per rental car on the policy. Most car hire companies will charge you extra per day for putting another driver on the insurance policy.

Documents and equipment needed to a hire car in Spain

To rent a car in Spain, you need to have these documents:

• A proof of ID, usually your passport
• A full and valid UK driving license

In Spain, all cars are also required to have certain equipment in the car. These include:

• A warning triangle
• Headlamp beam defectors
• Reflective jackets

If your rental car does not include this equipment, ask the car hire company to provide it for you.

What kind of insurance do I need when hiring a car in Spain?

Third-party liability insurance is a legal requirement when you're hiring a car in Spain. This type of insurance covers other road users, pedestrians and the other passengers in the vehicle you are driving. Anyone renting a car needs this in case they injure someone or damage property that's not theirs.

Third-party liability insurance covers:

• The cost of damage to any property that belongs to a third party; this could include personal possessions such as a camera.
• The cost of any third party's injury and damages, which could include medical costs and associated loss of earnings.
• Third-party legal costs and disbursements.

Third-party liability insurance doesn't cover:

• Damage to the driver's own car. Or if the car is stolen.
• Situations in which you have broken the Ts & Cs or local laws. Driving under the influence of alcohol or off-road could invalidate a claim, for instance.
• While the insurance company pay out any third-party costs, they would then take legal action to recover the money from you – a costly mistake that's best avoided.

Luckily, most car hire companies include this type of insurance within their policy. However, it's worth double checking the small print to make sure, as this sometimes isn't the case.

If it's not included, you will have to purchase this type of insurance separately. Aside from care hire insurance and third-party liability insurance, there are a number of additional insurance options when renting a car in Spain:

• Collision Damage Waiver (CDW) and Theft Protection (TP) is often included in most main insurance policies. This is offered to limit how much you would have to pay in the event of a car accident or theft from your vehicle.
• Zero Deductible Insurance provides the same full coverage as the above but means you don't pay a penny for any collision, damage or theft of the vehicle – this is a popular choice.
• Refundable Deductible Insurance reimburses you in case you damage the vehicle and had to pay some, if not all, the insurance deductible.

While these are not legal requirements, they are recommended to ensure you've got the most comprehensive cover.

Should I get excess insurance when renting a car in Spain?

If you damage the rental car that you've hired in any way, you will be liable for the excess, which could be anything from £500 to £2000 or higher depending on the type of vehicle you hire. This amount of money is expected to be covered by you, meaning you'd be out of pocket during your holiday. If you buy car hire excess insurance for your trip to Spain, you'll be covered for this.

With car hire excess insurance you can be covered for a single trip or, if you know you'll be hiring a car again within the year, you can buy an annual policy and save money. Most policies include cover for excesses of up to £10,000 and can also cover you for some of the 'extras' charged by the rental company such as damage to tyres, underbody damage and damage to windscreen/side windows.

Car rental companies will often offer car hire excess insurance at the desk; this is not a legal requirement and is usually a lot more expensive than if you were to buy through a specialist company.

Buying insurance4carhire's Annual Europe car hire excess insurance policy can give comprehensive cover, should save you money and provides proof of pre-booked policy purchase if your car hire company attempts to sell you a policy of their own.

For more about driving in Spain read our handy guide.

*Research carried out in November 2019 based on Annual Europe cover at £44.99 from insurance4carhire compared with car hire excess cover for a week-long trip in Spain in December with Hertz, Sixt, Avis, Firefly and Goldcar.

Why choose a policy from insurance4carhire?

Excess cover is often offered when you pick up your rental car, but at a high cost - between £9 and £20 per day. A policy from insurance4carhire will cost you from £12.79 per trip or from £46.99 per year* and will cover your excess - up to £6,500 per claim.

About the author

This is a marketing article from insurance4carhire by our car hire excess insurance business unit director, Adam Summersby. Adam is a respected leader with 11 years' varied experience in niche personal and commercial lines insurance, including caravan, site operators and excess reimbursement, with proficiency in leadership, sales and account management.

Do I Need Insurance for Car Rental in Madrid

Source: https://www.insurance4carhire.com/blog/insurance-guides/what-insurance-do-you-need-to-hire-a-car-in-spain

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