Insurance in rental vehicle contracts has come under the spotlight from the Office of Fair Trading, it has emerged.

An Office of Fair Trading report into car rental contracts says that insurance products at rental desks are often not explained properly and most customers are not aware of the charges in the small print.

The report, finished earlier this year but which has only just come to light is generally approving of the car rental customer contracts, but does point to a number of worrying problems in insurance, including:

  • The customer often does not understand what they are already covered for, and what they are agreeing to pay for damage.
  • Insurance sold at the rental desk often does not have enough information for the customer to draw a comparison and the staff selling it do not usually understand the product well
  • The rental desk is a poor place for customers to transact, many are tired, rushed and wanting to get on with their holidays.
  • Customer assume that the rental companies would specifically draw their attention to significant clauses, when usually they don’t
  • Customers customarily allow their credit cards to be pre-authorised for damage, yet most claim not to know that this allows the rental company to charge their card without further permission.
  • Rental companies insurance often contains a number of significant exclusions which the customer is seldom aware of.

Ernesto Suarez, chief executive of Halo Insurance Services Limited and, said: "This is the OfT telling the car rental industry to spend time reviewing these products that they supply and forming a proper communication programme around them, as well as making them clear. It's important the car rental industry gets these issues right."