A cheap car hire excess insurance policy can be a good way to bring down the expensive excesses rental companies typically charge if your rental is damaged or stolen. However, cheap policies usually come with a few sneaky exclusions, so don't get ripped off with a bargain policy.
*Prices are based on a 15-day hire in Australia, as of March 2024. Benefits vary from brand to brand. Always read through the product disclosure statement (PDS) to make sure the product is suitable for you.
Is it a good idea to get cheap car hire excess insurance?
Without car hire excess insurance, you might have to fork out up to $8,000 if your rental car is damaged in any way. Cheap car hire excess insurance is helpful if you want to reduce that excess but your wallet will still take a hit. Your excess won't be thousands, it's more likely to be a couple hundred bucks, so you'll still be out of pocket.
If that doesn't bother you, then cheap rental car insurance could be just right. It's definitely better than not getting any cover at all.
Just keep in mind that your cover will be limited to your rental agreement without any extra provisions the way other policies might. As an example, if your rental agreement doesn't cover damage to windscreens, then your rental car excess insurance won't cover it either. Some brands like Rentalcover.com and Car Hire Excess actually do cover this as an added benefit.
If you're someone who prefers more comprehensive cover, then getting a cheap policy might not be the best idea. As you can imagine, with any cheap policy, you get what you pay for. Most cheap car hire excess insurance policies will have more restrictions.
What's not included in budget policies
Budget policies have appealing price tags but don't let that trick you; they often come with a catch. Here's what to look out for.
Excluded cover. Windscreens, tyres, roof and underbody are often excluded from cheap car hire excess insurance policies, which doesn't really help you, considering that a chipped windscreen or flat tyre are among the most common things to go wrong.
Cover for specific vehicles. Some policies will only cover certain types of vehicles so make sure your car is included if you opt for a cheap policy.
Excesses. With a cheap policy, you'll probably still have an excess to pay. Sure, it won't be thousands but you could still looking at a few hundred out of pocket.
Additional drivers. Budget cover may exclude additional drivers or charge more to add them onto the poli
Cover for lost keys. More comprehensive policies can also include cover for lost keys and replacements.
Cover for administration fees. If you need to make a claim on your rental car, some rental companies actually charge administration/processing fees. This will be a further out of pocket expense with a cheap policy.
Other ways to save
You don't need to get cheap car rental excess insurance to save money. There are other options out there that give you better value for your money. These include:
Increase your excess option. Choose a brands that lets you select a level of excess that you're comfortable with and hope you don't have to make a claim.
Discounts/coupons. Take advantage of available coupons to save a few more dollars off your policy.
Get an annual policy. If you hire cars regularly, then an annual car excess insurance policy is a cost-effective way to go.
A travel insurance policy. Are you travelling overseas, interstate or at least 250km away from home when you hire a car? If so, you'll probably already get some kind of travel insurance. All you need to do is take out a policy that includes car rental excess cover.
Jessica Prasida is a travel insurance expert for Finder. She lives and breathes travel, having worked as a travel agent and branch manager at STA Travel for over 4 years, then writing about travel insurance with Finder for another 5 years. Jess has a Bachelor of Business from the University of Technology, Sydney and a Tier 1 General Insurance qualification.
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