What is car hire excess insurance (and why do you need it)?
An excess is an out-of-pocket expense charged by an insurance company if you need to make a claim. So in this case, car hire excess insurance covers you from having to pay hefty excess amounts for the cost of repairing your rental car if something bad happens.
Let's put this into perspective. No one likes to pay more money than they have to. If you choose not to take out rental car excess insurance prior to pick up, then you have two options:
1. You take out excess reduction from the car hire company (which can actually cost almost $39 per day!)
2. You risk it and pay up to $8000 in excess if the car is damaged
Either option is significantly more expensive than just taking out rental car excess insurance in the first place, considering cover can start from $2.83 per day (instead of paying $39 per day).
Don't be put off from renting a car because of this, just make sure you get the right cover whether you're in Australia or abroad.
Compare rental car insurance excess options
|Name||International or domestic cover||Eligible driver age||Features||Starting price (per day)||Apply|
||$5.68 (with a $300 excess payable)||Get quote|
|Both||Up to 79 years||
||$2.83 (with a $100 excess payable)||Get quote|
|Domestic cover only||18–110 years||
||$2.25 (for $1,000 cover)||Get quote|
*Prices are based on a 15-day hire in Australia, as of September 2019. Benefits vary from brand to brand. Always read through the product disclosure statement (PDS) to make sure the product is suitable for you.
Who should get car rental excess insurance?
5 benefits of car rental excess insurance in Australia and overseas
Getting standalone cover is usually much cheaper than cover purchased through a rental car company. On average, car rental excess insurance is three times cheaper than cover from the rental car companies.
Windscreens, tyres, roof and underbody can be included
Brands such as Rentalcover.com and Car Hire Excess will cover damage to the above even though it is excluded from your rental agreement. You just need to make sure you're not breaking rules like driving under the influence or on unsealed roads.
Get other helpful inclusions
Some brands will also include cover for your luggage and personal effects, and returning your vehicle to the correct location if you get sick or injured and can't return it yourself.
Covers all sorts of vehicles
Sedans, hatchbacks, SUVs and more – most policies cover an extensive range of vehicles as long as they weigh less than 4.5 tonnes.
Domestic and international policies available
Regardless of whether you're travelling within Australia or overseas, there are standalone car rental excess policies available to suit your needs.
Is it worth it? Yes
In the diagram below, we've compared pricing from our partner Rentalcover.com (in blue) against three major car rental companies (in red). You can see a significant difference in price with Hertz being almost five times more expensive than Rentalcover.com.
Another consideration is that some of these rental companies may only offer an "excess reduction" which lessens your out-of-pocket expenses but doesn't always make it zero.
*Prices are based on a 15-day hire in Australia as of September 2019.
What options do I have?
Excess reduction cover straight from rental company
- Pros. This is the most convenient option if you haven't already got cover.
- Cons. Usually the most expensive way to get cover for car rental excess.
Standalone car rental excess insurance policy
- Pros. Affordable and flexible option that can give you additional benefits.
- Cons. You'll need to take out cover before picking up the rental car.
Travel insurance including car rental excess insurance
- Pros. Affordable option since it can be automatically included in some policies.
- Cons. Sometimes not an option if you're hiring a car in your home city.
What's not covered by car rental excess insurance?
- You use the rental vehicle in breach of your rental agreement
- You use your rental vehicle without a valid licence
- Your claim is for administrative fees charged by the rental company (unless this is included in your policy)
- You were driving the rental car while under the influence of drugs or alcohol
- You failed to act sensibly to protect the vehicle or your property
- You did not do everything possible to reduce or minimise your loss
- It arises because you break the law
- You travel against medical advice
- Your claim arises due to a pre-existing medical condition
- Your claim is for consequential loss of any kind, for example loss of enjoyment
- Your claim arises due to mental illness, depression, anxiety or stress
- Your claim arises because you participate in any race, speed or time trial
- Your claim arises from a government authority confiscating, detaining or destroying anything
With this in mind, make sure to check the terms and conditions of whichever cover option you choose to work out when you will and will not be covered.
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