Free cover included in your deal

If you are hiring a van in Europe, the rental agreement will include a basic package of Third-Party Liability, Theft Protection and Collision Damage Waiver.

Third-party Liability pays out if you injure another person or damage their property. Theft Protection is in place in case the van is stolen. Collision Damage Waiver (CDW) covers damage to the van's bodywork. (Some rental agreements include Loss Damage Waiver [LDW], which is usually a combination of Theft Protection and Collision Damage Waiver.)

These three types of free cover are all you need legally to take a rental van on the road. You do not have to buy any additional insurance. You can simply stick with the free cover and drive the van away.

Limits of free cover

This combination of three types of free cover is nowhere near comprehensive.

Collision Damage Waiver only covers bodywork

Collision Damage Waiver does not normally cover any damage to the windscreen, tyres, engine, gears or undercarriage of the hire van. So, you could have to pay the full cost of any repairs. If, for example, you punctured a tyre or the gearbox failed, you would not be covered by Collision Damage Waiver. You would be responsible for the whole repair bill.

You will pay an excess

Collision Damage Waiver and Theft Protection charge an excess, which means you pay the first part of the repair or replacement costs. A van rental excess works in a similar way to a standard van insurance excess, but it is often much higher. It is not unusual for an excess on a van rental agreement to be upwards of £500/ and it could be as much as £1800.

You could therefore end up with a big bill in the event of a theft or collision. For example, if the excess is £1000 and the van is damaged in a crash, you will have to fork out the first £1000 of any repair costs.

Buying extra protection

Some people buy extra cover for their hire van to protect themselves from having to pay out large amounts if something goes wrong and/or to protect their excess. Extra insurance or cover is available from various places. You can buy it from the website you book the van with, standalone companies selling excess protection insurance online, or the rental company you pick up the van from, for example.

The cheapest option for you will vary by where you're hiring, how long you have the van and how comprehensive you want the cover to be. What the policies cover varies hugely. It's worth reading the small print. Then you'll be completely clear on what you're buying, and happy you're getting value for money.

In general, cover you buy at the counter when you pick up the van tends to be more expensive. It is often cheaper to buy a standalone policy from an independent company. However, if you buy a standalone policy, you normally have to pay the excess to the van rental firm first and then claim it back.

Not buying extra protection

If your budget is tight, you might not want to pay out for any additional insurance. You do not legally need to buy additional insurance. However, before you set off, do be clear on what you're covered for, and what costs you could be liable for if anything happens. The price of additional cover will be a lot lower than the excess, or the repair bill for damage to the windscreen, tyres or undercarriage of the van, for example.

Insuring your rental van in the US and Canada

If you are from outside the US and Canada and hire a van in those countries, you will have the basic waiver package included in your rental in US and Canada. It will have zero excess, which means you would not have to pay an excess if the van gets damaged in areas that are covered. Many US and Canadian residents use insurance that comes with their credit card to cover their rental van.