Car Rental Excess Insurance

Want to avoid hefty excess fees on your rental car? Compare rental excess insurance from as little as $6 a day.

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.

Get a quote for car rental excess insurance

Details Features
Car Hire Excess Cover
Car Hire Excess Cover
Cover for eligible drivers from 21-71 years of age. Cover starting from $9.86 per day (7 day+ hire).
  • Car rental excess from $4,000 up to $8,000
  • Vehicle return cover up to $500
  • Cover for drivers in Australia and overseas
Get Quote More info
Car Rental Excess Cover
Car Rental Excess Cover
Covers all eligible drivers listed with rental company. International drivers welcome. Cover starting from $5.69 per day (hires over 15 days).
  • Car rental excess up to $4,000 or $6,000 covered
  • Luggage and personal effects covered up to $1,500
  • No distance restriction from main residence
Get Quote More info
Car Rental Excess Cover
Car Rental Excess Cover
Guarantees that you will pay minimum 50% less compared to the rental company's excess reduction.
  • Guaranteed 50% saving
  • Covers motorhome, 4x4, courtesy, replacement car hire
  • Comes with at least US$750 in Free Gap Cover
Get Quote More info
rental car on a highway

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 you're 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 excess over the counter can be over $30 per day. Standalone car rental excess cover starts as low as $6, meaning 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
  • 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 effects that are stolen, accidentally damaged or permanently lost. Maximum payment will be applied (usually around $500)

Which types of rental vehicles can I get cover for?

Most insurers will cover any vehicle that has been rented from a licensed motor vehicle rental company, up to a certain weight limit. This includes:

  • Cars. Sedans, hatchbacks, coupes, station wagons, SUVs
  • Four-wheel drives (4x4)
  • Campervans and motorhomes. Usually up to 4.5 tonnes
  • Minibuses. Usually up to a 12-seater

Make sure you read the PDS carefully to see if your vehicle type is automatically covered, as some insurers may require you to take out a separate policy for larger vehicles like campervans, motorhomes and minibuses. Commercial vehicles of any kind will not be covered by a standard rental excess insurance policy.

How can I reduce my excess?

When it comes to reducing the excess charged by a rental company, you typically have three options:

  • Standalone car rental excess insurance policy

    This type of cover is designed solely to cover any 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.

  This is a great option if you need a flexible policy designed specifically for car rentals.
  • 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.

 The most convenient option if you haven't already 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 deductibles 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.

  This option is ideal if you're already planning a trip that requires comprehensive travel insurance.

How do the costs of each insurance option stack up?

1. Car hire companyStandard excess liability*Excess reduced toDaily rate to reduce excess (on a 7-day hire)Price to reduce excess (per day)
Avis$3,017$342$24$24
Budget$2,850$342$22.73$22.73
Europcar$4,180$1,000$26.55$26.55
Hertz$4,000$1210$0$19.09$29$19.09$29
Thrifty$4,000$500$0$26.99$33$26.99$33
2. Domestic travel insurance (cover for one adult)Excess coverageExcess to be paid on claims?Daily rate to cover excess (on a seven day hire)**Daily rate to reduce excess (per day)**
Good2Go$4000-$6000$50$5.47$35.18
Worldcare Travel Insurance$6000$0$5.35$32.35
1Cover$5000$0$5.69$29.85
3. Standalone car rental excess cover (covers drivers listed on rental agreement)Excess coverageExcess to be paid on claims?Daily rate to cover excess (on a seven day hire)**Daily rate to reduce excess (per day)**
Allianz$4000-$6000$0$19.52$42.47
Hiccup$4000-$6000$0$19.52$42.47
RACV$1000-$8000$0$18$126
RentalCover.com$3200-$8200$0-$50$8.73$22.19
TripCover$4000-$6000$0
$300
$10.40
$7.11
$13.87
$9.49

These figures are based on Choice.com.au's 2015 study of 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. In comparison, the daily rate from TripCover to remove excess completely with cover up to $4,000 is just $13.60 per day*.

Why should I consider taking it out?

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% 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 tonnes for no extra charge. Exclusions usually apply to campervans on travel insurance car rental excess.
  • No distance restrictions. If you're taking out cover within Australia, there are generally no distance restrictions from your main residence.
  • Cover available for international visitors. Cover is usually available for international travellers visiting Australia from overseas.

What might not be covered?

  • 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 in 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 won't my claim be paid?

As a general rule, you will not be able to make a claim under your 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 motorsports 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. Read the fine print of any rental agreement before signing it to familiarise yourself with exactly how many excesses each policy contains, and in which situations they apply.

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 insuranceCover on travel insurance policies
  • Price not determined by driver age. Usually two age groups: 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
  • Provides cover for a whole range of other losses e.g. cancellation, medical cover (international trips)
  • Will usually have to be 250km from residence for cover to apply
  • Price can increase significantly for older travellers or those with pre-existing conditions

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.

Liabilities you need to be aware of when renting a car

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 is often referred to as:

  • Collision damage waiver
  • Loss damage waiver
  • Damage liability fee

You are liable for the excess in the event of an accident. This amount is usually around $3,000 to $4,000.  This is where car rental excess insurance can come in.

How do I avoid unexpected expenses?

  • 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.

What are my rights when I rent a car?

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 means 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, you'll most likely need an official report from the local police or a representative from your transport office
  • 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

*Prices correct as of February 2015 Picture: Shutterstock

Was this content helpful to you? No  Yes

Related Posts

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, read the PDS or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms and Conditions and Privacy Policy.

34 Responses

  1. Default Gravatar
    andyJuly 2, 2017

    Your google entry mentions annual policies for excess cover – but can’t find it on your website.

    • Staff
      JhezelynJuly 2, 2017Staff

      Hi Andy,

      Thanks for your comment.

      You have contacted finder.com.au, a comparison and information service and we are not an insurer. We currently have three insurers in our panel for car rental excess insurance. For an annual car excess policy quote please click on the green ‘Get quote’ button and select the dates manually.

      You would be well advised to get in touch with with your insurer and discuss your options.

      Regards,
      Jhezelyn

  2. Default Gravatar
    DennisApril 18, 2017

    I have just arranged for a Pajero 4WD from Europcar.
    Policies refer to an age group either finishing at 71 or 75 years of age. I am 76 so does that mean I am ineligible for this car rental excess insurance.

    • Staff
      ZubairApril 19, 2017Staff

      Hi Dennis,

      Thank you for your inquiry.

      finder.com.au is a comparison and information service and not actually an insurer.

      Please note that 75 may be the age limit for that specific vehicle, best to get in touch directly with the insurer.

      All the best,
      Zubair

  3. Default Gravatar
    SnarfMarch 15, 2017

    How do I get a quote for an annual car excess reduction policy. Is there an option to increase the level of cover to $6-8,000?

    • Staff
      ZubairMarch 16, 2017Staff

      Hi Snarf,

      Thank you for your question.

      You have contacted finder.com.au a comparison and information service and not an insurer.

      The table on the top of the page lists all insurers in our panel who offer car hire excess cover. The Car Hire Excess brand in our panel offers cover from $4,000 up to $8,000, you can select your desired excess amount on the insurer website and for a quote please click on the green ‘Get quote’ button.

      All the best,
      Zubair

    • Default Gravatar
      March 16, 2017

      I get that part, but I cannot see an option to get a quote for an annual car excess policy only. Can you walk me through it please.

    • Staff
      ZubairMarch 17, 2017Staff

      Hi Snarf,

      Thank you for your question.

      Currently, we have three insurers in our panel for car rental excess insurance. I just visited their websites and did not find any option of annual car excess insurance on their home quote engine pages. You will need to select the dates manually. Also, may I know the name of the website you have gone too?

      All the best,
      Zubair

  4. Default Gravatar
    AustinAugust 4, 2016

    Thanks Richard,

    So, let’s keep this, as you say, as a comparison.

    From what you say I take it that there are circumstances in which, I would have to pay for the total cost of a loss (to the rented vehicle and to other property etc) even if I purchased insurance from the rental company?

    If this is so, have you any suggestion as to how one’s loss could be limited if one rents a car in Australia. I find it totally frightening that under some loss circumstances, no matter what insurance I took from the renter, I might be up for a huge sum.

    Regards…Austin

    • Staff
      RichardAugust 9, 2016Staff

      Hi Austin,

      finder.com.au is a comparison service and we are not permitted to provide users with personalised financial advice. You should contact your rental company to discuss these matters.

      Cheers,
      Richard

  5. Default Gravatar
    AustinAugust 3, 2016

    I’ve just rented a car in Townsville from Thrifty. Prominent on the counter was a notice saying that none of their insurance covers me for water damage. That is, the “default” $3000 excess does not apply so that if a car is, for example, totalled through a flood, storm or accident involving driving into a water-filled ditch, there is NO coverage–the bill could be for a complete new car.
    In the light of this I see that external coverage (which I have) covers up to %6000, but not the total value of the car in the event of such water damage.

    Am I right? I haven’t done my homework but to all Australian car hire companies exclude water damage from their default (and other) coverage? Have you any ideas– a solution to this problem?

    • Staff
      RichardAugust 3, 2016Staff

      Hi Austin,

      Thanks for your question. finder.com.au is a comparison service and we are not permitted to provide our user with personalised financial advice. According to the terms and conditions on the Thrifty website:

      Even if you purchase collision damage waiver protection from Thrifty you will have to pay for the full cost they incur as a result of each separate instance of an accident, damage to or loss of the vehicle or any equipment, together with the cost of any damage you cause to other property, where the damage or loss, whether to the vehicle or to the property of others, is of any of the following types: damage or loss caused to the vehicle due to hail, flood, fire, storm, cyclone or other natural disaster where such damage exceeds the amount of the DRF.

      For more information about cover from Thrifty you should contact them either by calling 1300 367 227 or by emailing reservations@thrifty.com.au.

      All the best,
      Richard

  6. Default Gravatar
    JohnNCNovember 13, 2015

    I live in Australia and will be travelling to the UK in June 2016 where I intend to hire a car for 2 to 6 weeks.I have travel insurance with a $3000 excess for damage caused to a hire car. Is this enough cover. Am I covered comprehensively by the car hire firms?

    • Staff
      RichardNovember 16, 2015Staff

      Hi John,

      Thanks for your question. finder.com.au is a comparison service and we are not permitted to provide our users with personalised financial advice. Whether you’re covered comprehensively will depend on your policy, along with the cover provided by the rental company.

      I hope this was helpful,
      Richard

  7. Default Gravatar
    August 11, 2015

    My son hired a car in Queensland yesterday and didn’t get insurance. Can I purchase insurance for him today 11th of August until 16th August 2015 please.

    • Staff
      RichardAugust 11, 2015Staff

      Hi Jo,

      Thanks for your question. finder.com.au is a comparison service and not an insurer. If you would like to compare the products from our providers, please see the table above.

      I hope this was helpful,
      Richard

  8. Default Gravatar
    maisieMay 12, 2015

    Hi, I have taken out travel insurance for our holiday in europe and the uk. This insurance is comprehensive and includes car hire excess of $3000. Does this mean I don’t need to take out excess insurance with the car hire company. Or does this just pay me back the amount I have to pay.
    Just a little confused. I had read somewhere not to take insurance with the car hire company because it was already covered in my travel insurance.

    • Staff
      RichardMay 13, 2015Staff

      Hi Maisie,

      Thanks for your question. The insurance through the rental company cover things relating to the car and acts like a temporary version of your normal car insurance. Car rental excess insurance covers the gap between what is covered by your insurance and the actual cost of damages. This gap can run into the thousands of dollars, so some people choose to take out the additional protection provided by car rental excess insurance. As you already have a comprehensive policy, you might be covered for car rental excess. You may want to have a look through your policy document to confirm whether or not you already have this cover.

      I hope this was helpful,
      Richard

  9. Default Gravatar
    MickApril 5, 2015

    We shall be hiring a car for 34 days whilst visiting the UK.

    Most insurer’s I have looked at only provide cover for the first 14 days, or, 30 maximum.

    If I buy Car Rental Excess Insurance from you will it cover the whole period of hire?

    Thank you.

    • Staff
      RichardApril 7, 2015Staff

      Hi Mick,

      Thanks for your question. Unfortunately, finder.com.au is a comparison service and not an insurer. If you would like to receive a quote from one of the insurers in our panel, please consult the table above.

      I hope this was helpful,
      Richard

  10. Default Gravatar
    JOHNFebruary 17, 2015

    Hi,
    I have an annual travel insurance policy(domestic)

    I need to hire a car whilst mine is in the panel beaters, and the rental company want to basically double the rental to reduce the excess

    I thought I’d be covered by my annual policy – but careful reading revealed I must have travelled a minimum of 250km from home to be covered.
    Can I purchase a policy that will ever me in my home city (Sydney by the way)
    Thanks Regards JOHN

    • Staff
      RichardFebruary 18, 2015Staff

      Hi John,

      Thanks for your question. Travel insurance is designed to cover you while you are travelling, which is why you can’t be covered in your home town. You can take out car rental insurance excess with Tripcover from $5.51 per day (over 15 days), which is cheaper than the car rental companies rates and is underwritten by Allianz.

      I hope this was helpful,
      Richard

Ask a question
feedback