Looking to cover your rental vehicle? Find excess insurance for domestic and international car hire
If you rent a car and it's damaged, lost or stolen you will be charged what is known as 'excess' by the rental company. Car rental excess insurance can cover you for this expense. If you're ready to take out cover right away, you can follow the secure links below to receive a quote for cover.
Receive quotes for car rental excess insurance
What is car rental excess insurance?
Car rental excess insurance provides protection for the excess charges or gap amount from a car rental company in the event your car is damaged or stolen. With some excess charges being upwards of $5,000, this little investment can bring great peace of mind if your hiring a car for a couple of weeks or even a couple of days. While prices will vary between car rental companies, the cost of reducing the car rental excess over the counter can be over $25 per day...with the cost of standalone car rental excess cover as low as $6, it can be a smart choice for those looking to save while still getting comprehensive cover.
What type of damage is usually covered?
Most policies will cover you for the following types of damage;
- Multi and single vehicle accidents
- Cracked or damaged windscreens
- Overhead damage
- Cracked or damaged lights
- Damage to the car undercarriage or wheels
- Damage to bumpers and trim
What else will I be covered for?
- If the vehicle is stolen while in your custody
- Cost of returning the vehicle to the nearest depot if you are unfit to do so
- Repair cost of value of luggage and personal effect that are stolen, accidentally damage or permanently lost. Maximum payment will be a applied (usually around $500)
What options do I have for reducing car rental excess?
When it comes to reducing the excess charged by a rental company, you typically have three options
- Excess reduction cover straight from rental company. This is the simplest option to reduce your rental vehicle excess because you can arrange it directly through the rental company. It reduces the excess you will have to pay to a much more reasonable amount, but it does of course come at a cost. This option will generally work out to be more expensive than the other options listed below, though will probably end up cheaper if you’re only renting a car for a couple of days. You also won’t have to wait while the excess is refunded by your insurance provider.
Why choose this option?
This is typically an option for convenience if you have not bought travel insurance or car rental excess insurance.
- Travel insurance policy with rental excess insurance feature. Usually a feature on comprehensive travel insurance policies, this benefit will reimburse you up to a certain limit (typically $4000) for any excess or other deductible you become liable to pay under your rental agreement. This cover kicks in if your rental car is involved in an accident or is stolen, and the hiring arrangement must incorporate comprehensive motor insurance against loss or damage to the car. However, the downside of this cover is that you won’t find it on basic travel insurance policies.
Why choose this option?
This is a great option if you are travelling and need travel insurance too.
- Standalone car rental excess insurance policy. This type of cover is designed solely to cover any car rental excess you may become liable for. You can choose from annual or daily cover, and these policies often include cover for damage to areas usually excluded by the rental company, such as the windscreen and tyres. Additional drivers named on the rental agreement are also included on the policy.
Why choose this option?
This is a great option if you specifically need a flexible policy designed specifically for car rentals.
How do the costs of each option stack up?
|1. Car Hire Company||Standard Excess Charged||Excess reduced to||Daily rate to reduce excess (on a seven day hire)|
|2. Travel insurance with car rental excess cover||Excess amount covered||Excess reduced to||Cost of reducing excess for 7 days|
|Average costing policy||$6,000||$0||$41.60|
|3. Car rental excess insurance||Excess amount covered||Excess reduced to||Daily rate to reduce excess (on a seven day hire)|
These figures are based on Choice.com.au's 2015 study of car rental excess charges.
Is car rental excess reduction insurance from a rental company more expensive?
Excess reduction insurance from a car rental company often seems like an attractive option, but this type of cover can greatly increase the cost of your car rental. This insurance is charged for every day you hire a car for, and can often more than double the overall cost of hiring a car. As mentioned earlier, reports have shown that the additional daily charge can be as much as $25 per day...the daily rate from provider TripCover to remove excess completely with cover up to $4,000 is just $13.60 per day*
Unless you’re only renting a car for a short period of time such as one or two days, in which case this type of cover could be a more affordable option, it pays to look at the other two options available. Travel insurance policies with rental excess insurance features and standalone car rental excess insurance policies can help you save a lot of money on your car hire.
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Car rental excess insurance vs. Travel insurance
Most travel insurance policies will offer car rental excess insurance as a built-in feature on both domestic and international policies. The decision of which option to go for will really come down to your own situation and what you want to be covered for. Here are some points on how the two compare;
Standalone car rental excess insurance
- Price not driven by driver age. Usually two age groups of 21-24 and 25-75
- Cover can be provided for campervans at no extra charge
- No distance restrictions for domestic journey
- Price not impacted by pre-existing medical conditions
- Cover provided for all drivers listed on rental agreement
- Also provides cover for luggage and personal effects
- Can cover up to $8,000 in excess charges
- Daily rate may work out to be much more expensive than just taking out travel insurance
Car rental excess insurance on travel insurance providers
- Provides cover for a whole range of other losses i.e. cancellation, medical cover (international trips),
- Price can increase significantly for older travellers or those with pre-existing conditions. May end up being much more expensive if you are an older traveller or have pre-existing conditions
- Will usually have to be 250km from residence for cover to apply
The points above show that the decision on what cover to take out really comes down to your own situation. Both options present both benefits and disadvantages to different travellers. It's worth comparing both options and reading the conditions of each cover closely before taking out one cover over the other.
Understanding your car rental agreement and the insurance that applies can be confusing. There are a few key points to remember.
Third party liability
No matter where you are in Australia, it’s mandatory to have third-party insurance in order to register a car, so make sure the rental company has this type of cover in place. Third-party insurance covers you when you cause injuries to other people. You should check to see what sort of protection is in place for you, the driver.
Damage to the vehicle
The rental car company will also offer a basic level of insurance for damages to the car, which can be referred to as names such as a
- Collision damage waiver
- Loss damage waiver
- Damage liability fee
You are liable for the excess in the event of event of an accident. This amount is usually around $3,000 to $4,000. This is where car rental excess insurance can come in.
Benefits of rental car excess insurance
Standalone rental vehicle excess insurance cover has many benefits, including:
- Pay the same despite age. Most insurers will apply the same premium rate for drivers aged 21 - 24 and for drivers aged 25 - 75. By comparison, premiums for domestic travel cover can increase significantly with age.
- Affordability. This type of insurance cover can be up to 60 per cent cheaper than taking out a rental company’s excess reduction option.
- Good option for people looking for basic cover. This type of cover is designed solely to cover any car rental excess you may become liable for, and often covers areas of the car excluded from rental company policies.
- Most policies include cover for luggage and personal effects. If any of your luggage or personal effects are stolen, accidentally damaged or permanently lost during your journey, your policy will cover the repair or replacement costs. This adds extra peace of mind when you’re travelling.
- Cooling-off period. If you decide that your policy is not right for you, you may cancel it within 14 days after being issued with your Certificate of Insurance and PDS. You will be given a full refund of the premium you paid, provided you have not started your journey and you do not want to make a claim or to exercise any other right under the policy.
- Cover can be taken out on a daily, single trip or annual basis. Cover can be purchased for just a single day, or on a single trip basis to cover you for the duration of your rental agreement. Some providers will also offer annual cover to provide a more cost-effective option for those regularly hiring and driving rental cars.
- All drivers are covered. All drivers listed on your rental agreement are typically covered under this type of insurance policy.
- All excess fees covered. Standalone rental car excess insurance cover protects you against all excess fees, even single vehicle accident excesses.
- Better coverage than rental company cover. Excess reduction cover direct from car rental companies excludes certain types of damage, such as overhead damage, water damage and underbody damage. However, all of these are usually covered under standalone policies.
- Can cover campervans. Most policies will allow you to cover campervans up to 4.5 tones for no extra charge...exclusions usually apply to campervans on travel insurance car rental excess
- No distance restrictions. If your taking out cover within Australia, there is generally no distance restrictions from main residence
- Cover available for international visitors. Cover is usually available for international travellers visiting Australia from overseas
Disadvantages of car rental insurance excess
- Cover is generally just limited to rental insurance excess and luggage and personal effects. However, if you get car rental excess cover as part of a travel insurance policy, this will include cover for other events, such as medical emergencies.
- Not all policies will provide cover for international car hire, with some limiting their coverage to car hire to Australia only. Read the PDS closely to make sure you know what each policy does and does not cover.
- You may have to pay the excess amount upfront to the car hire company and claim it back from the insurer. If you’ve got a cash flow problem or simply don’t have access to enough money to cover the excess, this could be a significant problem.
When you won't be paid
As a general rule, you will not be able to make a claim under your car rental excess insurance policy if:
- You were under the influence of alcohol or drugs at the time the loss occurred.
- You do not act sensibly and responsibly to protect yourself and your property.
- You do not do everything possible to reduce your loss.
- Your claim is a result of you breaking the law or breaking any government ban or regulation.
- Your claim is a result of any act of war, rebellion, revolution etc.
- Your claim is a result of any act of terrorism or nuclear contamination.
- Your claim is related to depression, anxiety, stress or other mental or nervous conditions.
- Your claim arises from motor sports of any kind.
- The loss or damage is caused by detention or confiscation by customs or other officials or authorities.
- You are travelling against the advice of your doctor, or if you’ve booked or undertaken your trip after being diagnosed with a terminal illness.
- Your claim arises from or is exacerbated by an existing medical condition.
- Your claim is somehow related to pregnancy.
- Your claim involves suicide or a self-inflicted injury.
Accidental damage excess Vs Single vehicle accident excess
When taking out an insurance policy to reduce your excess, it pays to read the fine print and make sure you fully understand when your cover will and will not apply. For example, some insurance policies will only reduce your rental excess if your car is involved in an accident with another vehicle. This is called the accidental damage excess.
However, many people are unaware that if they are involved in a single vehicle accident, such as scraping the car on a wall or maybe hitting a kangaroo, a separate excess will apply on top of the accidental damage excess. This second charge is the single vehicle accident excess, and can end up adding another couple of thousand dollars to your overall bill.
Most hire car companies will not make you aware of the single vehicle accident excess when you take out cover. As a result, renters must be ready to read the fine print of any rental agreement before signing on to make sure exactly how many excesses each policy has and in what different situations they will apply.
- Inspect first. Make sure you give your rental car a thorough inspection before you drive away and make sure any existing damage is included in the condition report.
- Read the terms and conditions. Take a close look at your rental agreement and the insurance you have in place. Make sure you’re aware of when you are covered and what is excluded.
- Shop around for insurance. If you’re looking for cover to reduce the excess you’ll have to pay in the event of an accident, compare your options and shop around for a better deal. You may be able to find superior cover directly from an insurer rather than buying from the car rental agency.
- Return time. Arrange to return the vehicle at a time when it can be handed over to a person. Get that person to sign-off on the vehicle’s return so that you are not liable for any damage. Consider taking photos of the vehicle when you return it.
- Pay for tolls yourself. If you can, use your own e-tag so that you aren’t slugged with any extra administration charges.
- Damage list. If the car is damaged while it’s in your possession, ask the rental company for an itemised account of any repairs required.
Most of the rights you have when renting a car are governed by the rental agreement you sign with the car agency, so it pays to read the fine print in this document closely. However, you also have some protection under Australian Consumer Law. Some of these rights include:
- Consumer guarantees. Which mean that the vehicle you rent must be of a reasonable quality (roadworthy, clean, free from defects), must match the model you booked and must be fit for the purpose specified by you or the rental company.
- Protection against unfair terms. Australian Consumer Law also offers protection against things like false and misleading claims, and conduct that is deceptive and misleading.
Making a claim - tips to make sure you are paid
- Before you travel, make sure you know what evidence you will need to make a successful claim. If you are travelling with expensive items that you wish to cover, it is likely you will need original receipts or proof of ownership. Similarly, in the event of an accident you may need to obtain police and medical reports to validate your claim
- Contact your insurer as soon as possible. Don't leave it till you get home to speak with your insurer, contact them as soon as possible so you know exactly what they require for your claim to be paid
- Co-operate. Make an effort to work closely with your insurer to provide them with everything they need for your claim
- Get evidence from officials. If you are trying to claim for loss or theft, or damage to your rental vehicle or luggage, receive an official report from the local policy a representative from your transport official
- Take your time with the claims documents. Make an effort to fill out all the necessary documentation as best you can and provide all the necessary supporting documentation on time
Interested in purchasing for car rental excess insurance?
If the benefits of Car Rental Excess Insurance sound like a good match for your next trip, you can make a secure enquiry via the form located above. It is worth noting that car rental excess insurance only provides a simplified form of travel cover so you may like to consider a fully fledged travel insurance policy to provide protection for other losses such as medical or personal belongings.
*Prices correct as of February, 2015