Car hire: read the fine print
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By: Nthabiseng Moloi, MiWay Head of Marketing & Brand
Car hire is a great convenience for travellers, but you need to make absolutely certain about your liabilities. After all, accidents do happen.
Business and leisure travellers use car hire frequently because it is convenient and reasonably priced, but few of them take the time to understand fully what their position will be if the vehicle is stolen or damaged. There’s no getting around it: it is really important to pay attention to what’s in all those documents you sign at the car-rental counter.
The first thing to note is that you have a duty of care towards the hired car and the company that owns it – you really need to treat the vehicle better than you would treat your own. A second and related point is that car-hire companies cannot offer you insurance, so you are not insured in the same way that you are with respect to your own vehicle. What they do offer is responsibility waivers that limit your liability for any damage caused to the vehicle in the event of theft or collision. The ordinary waiver will cost around R150/day for an entry level vehicle and would limit your liability to R14 000; a super-waiver would cost around R250/day and reduce your liability to R3 000. A waiver acts very much like the excess on an insurance policy.
If you decline the waiver, you will be completely liable for any damage to the vehicle, or its replacement if stolen – whether you were at fault or not. Some companies will even charge you for their lost income while the vehicle is being repaired or replaced.
What the waiver does not cover
Waivers can be voided if the vehicle is damaged by potholes or stones on poorly maintained urban roads, or on untarred roads. Many companies will also void the waiver if the car is driven on surfaces that are not suitable for it, and even in areas where there is civil unrest or industrial action.
Of course, just as in the case of conventional insurance, reckless behaviour will also jeopardise the waiver. Driving over the speed limit or otherwise disobeying the rules of the road, driving while over the alcohol limit or using a mobile device will all void the waiver. Most waivers do not cover damage when no third party is involved; that is, if you lose control of the vehicle.
Another important tip is to make sure you inspect the vehicle very carefully before driving away, and make sure that all dents, chips and other imperfections are noted on the form. Many of the disputes found on consumer websites like Hellopeter.com are related to unexpected charges for damages – and they typically would fall below the waiver limit.
In case of an accident
If you are involved in an accident, it is advisable to take lots of pictures, put out the warning triangle (make sure you have one before accepting the vehicle), put on the hazard lights, call the police and make sure you get the details of the other party as well as any witnesses. You will also need to notify the car-hire company – check with them if the car needs towing.
Later, it is also necessary to advise your own insurance company that you have been involved in an accident, even though you are not claiming against your own policy.
As with insurance excesses, even if you are not responsible for the accident, you are still responsible for the amount not covered by the waiver. The car-hire company’s insurer will try to recover that from the other party, but if he or she is not insured, this is likely to be unsuccessful.
So, as with any contract, know what you are signing and think through what your responsibilities are and what your potential liabilities could be – and then drive off with a light heart!
MiWay is an Authorised Financial Services Provider (Licence no: 33970)
Date Posted: 2017-09-29
Posted By: MiWay Insurance Limited
Listed under these Business Listing Categories: Financial services,
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