Requirement to purchase Collision Damage Waiver for car hire excess coverage

Question

I recently took out a car hire excess reimbursement policy from a reputable third party insurance company (AIG). The policy states that CDW is required in order to receive reimbursement for a claim. The exact wording is as follows:

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Section A – Accidental Damage, Theft & Loss of Use We will pay up to the amount shown in the table of benefits for the excess for which you are liable to pay under the terms of the car rental agreement as a result of: o accidental damage; o fire; o vandalism; o theft; and o damage to your rental car’s windows and tyres, the undercarriage and the roof.

What you are not covered for under section A 1. Any claim where the policyholder has not accepted the rental company’s insurance (Collision Damage Waiver) at the rental counter or where insurance (Collision Damage Waiver) is not included in the total price of the car rental agreement

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It seems contradictory that I should have to purchase CDW from the car hire company in order for a third party insurance company to cover the excess of a claim. Why purchase the insurance from the car hire company which guarantees coverage with no excess and then purchase it again from a third party insurance company?

Am I missing something here?

Answer 1

Your AIG policy is covering damage to the rental car due to accidents other than collisions, and they want to be sure that you don't try to sneak in a claim for damages caused by a collision that you are now pretending is due to a cause that is not a collision but is a cause that is covered by the AIG policy. So, they insist that you have either purchased collision damage coverage as part of the rental agreement or that you have a waiver of the charge for collision damage coverage -- you are still covered for collision damages either way but you don't have to pay for it when you have a waiver. Waivers are usually available as part of corporate contracts between employer and rental car company. When an employee uses the contract number to reserve the rental car, the rental contract includes a waiver of the charges for collision damage coverage; the collision damage coverage is still in place but the employee doesn't pay for the coverage out of pocket.