Rental Car Insurance – A Trip to New Zealand

rental car insurance a trip to New Zealand

Welcome to Ben’s Chronicles

Hello! I’m Ben from EINSURANCE. Trust me, I know there are plenty of things we’d both probably rather be doing than discussing insurance. But although insurance gets a bad rap, it does have its benefits; especially when you find the right coverage and carrier.

Unfortunately, throughout my life I have had a knack for being at the wrong place, at the right time. Given my gravitational pull toward bad luck, I wanted to share a few of my life experiences with you in hopes that my bad luck could benefit you. So, bear with me over the upcoming weeks, because I’ll be sharing little nuggets I’ve learned through navigating the insurance world. If my mishaps and theories don’t directly help answer any of your insurance related questions, I promise they’ll make you laugh, albeit at my expense…

If you would like me to discuss a specific topic, feel free to email me at [email protected].

Today our topic is:

Rental Car Insurance – A Trip to New Zealand

Like most vacations, my three friends and I were extraordinarily excited about the journey we were about to embark upon as we traveled to the lonely island east of us, where the fantastic Lord of the Rings was filmed. We had been studying and working tirelessly in Sydney, Australia, and needed a break from the hustle and bustle of the large city. Given we all resided downtown, no one owned a vehicle, and at the time, had not driven for over 6 months. So, not only were we about to endeavor upon a journey in an unknown land, we were going to do it behind the wheel.

Like most, we were intent on saving as much as possible at every turn. This equated to restricting checked bags to one per person, enduring awkward flight times, and booking safe, but reasonably priced hotels for each leg of this road trip. The plan was to land in Christchurch, New Zealand, pick up our car at the airport, then drive for the next five days through the Southern Island of New Zealand.

The vacation started flawlessly, flight was on time, we all sat next to each other, although we slept for the three-hour jaunt across the Tasman Sea. We landed with the excitement of grade school students preparing for recess, and elbowed our way to be the first off the plane, through customs, and to receive our bags. Even our bags were on time. Once everyone’s bag was retrieved, we made our way to the rental car area. Given we were four capable drivers, we opted for the most reasonably priced option; a four door, automatic sedan with limited trunk space. I mean, we weren’t visiting Southern France or Miami, but touring the New Zealand countryside hoping to take in incredible views.

As we sifted through the contract, we continued with our theme of only purchasing the bare necessities. Meaning no GPS, no 3rd party rental car insurance, and paying for one additional driver of the vehicle. As we approached our vehicle, we began to realize that:

1. the steering wheel is on the right side of the car.

2. people drive on the left side of the road.

3. New Zealand highways may not be as developed as what we were used to.

Nonetheless, our excitement and collective confidence won the day. We jumped in the modest sized sedan and made our way onto the highways of New Zealand.

The first day of driving wasn’t as bad as we thought. Everyone was awake and alert, viewing terrain that neither of us had ever witnessed, and given our flight was early, the sun was beaming the entire way to our destination. As we tucked ourselves in that night excited about what the upcoming days had to offer, driving related issues were the last thing on our minds; especially given the success of the first day of driving. The next day was spent sightseeing, which set up our first night shift of driving. Things shifted dramatically. Everyone was beat, half awake, and without the powerful sun to shield us, we were at the beckon whim of twists and turns of the New Zealand highways. All of sudden, our defiant refusal of the 3rdparty insurance option offered at the airport seemed like a huge mistake.

Suddenly I was awakened by a small bump. “How far are we from the destination?” I asked. “Maybe a few hours” my friend barked out from behind the wheel. “Bump.” Another one came to pass. Given the small impact on the drive, I simply thought the bump was a rock, or perhaps uneven road. As we began to get closer to the city, the lighting of the road became stronger. We then were able to identify the bumps through the various sightings of road kill on the side of the paths. It appeared that we weren’t the only car to have hit several small rodents. Needless to say, we reached the hotel and the first order of business was to get rest.

In the morning everyone assessed the car and collectively sedated each other with testaments that “the bumper isn’t bad,” “I can’t even tell we hit something,” or even “the car rental company will just classify this as normal wear and tear.” For the duration of the trip we made a point to drive during the day, and be overly cautious. Unfortunately, we would later find out it was too late, the damage had been done.

As we returned to the airport, fulfilled with our break from the city and soaking up the Kiwi countryside, we marched to the car rental company. As they went to inspect the car, we all felt that if they didn’t consider the damage done to the car as normal wear and tear, that at the very most the damages would cost circa $500. After all, the car is a modestly sized sedan and given the laid-back Kiwi lifestyle, they’d surely understand. As the employees returned, they inputted the damage into their system, and sure enough we were stuck with over $3,000 worth of damages. We couldn’t believe it. We would have probably argued with those poor employees until the sun went down, but we had to catch a flight.

The trip was a hands down a success from a sightseeing/exploring standpoint. However, because of this trip, I never look at 3rd party rental car insurance providers the same way. If I’m renting a moving truck, or even a van from Home Depot, I choose the fully insured option provided by a 3rd party. Even though the chances of an accident are slim, the headache that ensues when/if one occurs makes the financial investment more than worth it. So, certainly save where you can, just not with 3rd party rental car insurance!

About Dale Williams

Dale Q. Williams, MBA, is a well-respected financial executive whose experience spans from insurance to investment banking. Dale has first hand underwriting experience through working for one of the largest U.S. based insurance carriers, and advisory experience from working for several bulge-bracket and middle-market investment banks. Dale also received his MBA from University of Chicago Booth School of Business, with concentrations in finance and accounting.