If you would rather pay $2.25* a day to avoid losing $4,608** on an excess to your car rental company, then you need domestic car rental excess insurance. As well as potentially saving you thousands, car rental excess insurance in Australia can provide you with cover for vehicle repairs that rental companies typically exclude. This includes body, windscreen, tyres, roof and underbody damage.
*Prices are based on a 15-day hire in Australia, as of April 2024. Benefits vary from brand to brand. Always read through the product disclosure statement (PDS) to make sure the product is suitable for you.
What is domestic car rental excess insurance?
When you rent a car in Australia, the rental company will charge you an excess if the car is damaged or stolen, which can be as much as $8,000. If anything goes wrong, you're liable to pay that excess. Domestic car rental excess insurance is designed to help you reduce the amount you have to pay to the rental company. You pay for a premium and in exchange, get peace of mind knowing that your domestic car rental excess insurance policy will protect you from extra fees if an accident occurs and the car is damaged.
5 ways car rental excess insurance can help you in Australia
Whether you're travelling for work or doing a road trip across Australia, domestic car rental excess insurance can be a trusty companion. Here's 5 ways it can help.
If you hit an animal.
Most rental agreements won't cover you if you hit an animal. As anyone who has travelled outside the main cities of Australia will tell you, it's really common to hit a kangaroo and it can cause some serious damage to your car. Fortunately, some rental car excess companies will cover you if you hit an animal, so if you're planning a road trip, be sure it's not excluded from your policy.
If you car share.
Do you use Go-Get or Car Next Door? Car-sharing services are becoming increasingly popular. These companies will usually offer some form of excess insurance or reduction but it pays to compare. Generally, you can save some money by buying car rental excess insurance separately instead of adding it onto your rate.
Extra inclusions.
Unlike the cover provided by rental companies, car rental excess insurance in Australia can include cover for damage to the windscreen, tyres, roof and underbody.
Reduces your excess to zero:
Rather than pay thousands of dollars, a domestic car excess insurance policy can reduce your excess to zero so you won't have to worry about huge out of pocket costs.
Cover for all types of vehicles.
You can get cover for sedans, hatchbacks, coupes, station wagons, SUVs, 4x4 vehicles campervans and motorhomes (usually up to 4.5 tonnes) and up to 12-seater minibuses.
How do the costs compare?
For a clearer indication of the costs, check out how the car rental excess insurer compares to car-sharing and rental company insurance.
Brand
Rentalcover.com
Car-share brand
Rental company
$0 excess
No, $300
No, $634
Cover for windscreens, tyres, roof and underbody?
Unknown
Cover for key loss/ replacement?
Price
$9.48
$18.00
$19.28
Rentalcover.com. You can get cover from $8.10 and reduce your excess to zero. You'll also get cover for all single and multiple vehicle accidents and vehicle repairs including body damage, windscreen, tyres, roof and underbody damage. It also comes with key loss cover and coverage for theft, fire and vandalism.
Go-Get. Insurance is included in your rental price, but for a standard car you are liable to pay $2,000. You can reduce your damage excess cover to $300 by paying $18 extra per day. Keep in mind though that this will not cover you for all loss or damage.
Avis. Avis's standard liability excess is $4,608. To reduce your excess to $634 dollars, you will likely pay in the region of $30 a day. For instance, it will cost you $19 per day for a compact car in Sydney. This does not include cover for certain loss or damage, including overhead, underbody and water damage.
* Prices are based on a 14 day hire in Australia for a 25+ year old driver. Quotes were retrieved in October 2019
What's the difference between domestic car rental excess insurance and getting cover from your travel insurance?
Some travel insurance policies actually cover rental car excess insurance but it's good to understand what that cover includes. Domestic car rental excess insurance is its' own specific type of insurance so generally, you'll find it has more inclusions.
Feature
Domestic car rental excess insurance - Rentalcover.com
Domestic travel insurance policy
No further excess payable
No distance limit
Cover for overbody/underbody of the vehicle
Maximum excess cover
No maximum
$8,000
What's not covered by car hire excess insurance in Australia?
In most cases, you won't be covered for the following:
Motorhomes, specifically vehicles that have a toilet or shower
Some campervans with sleeping berths or any vehicle exceeding 4.5 tonnes
Vehicles, including 4x4s, that are used on unsealed roads
Minibuses that require a specialised drivers licence
Damages resulting from a breach in your rental agreement or where you have broken the law.
* Prices in introduction are based on a 14 day car rental excess insurance policy in Australia with RACV. ** Price is based on the standard liability excess of Avis.
Rental vehicle excess insurance is another form of insurance designed to reduce the amount you have to pay if you're rental car is damaged or stolen in your care.
When you hire a car in Australia, it will usually come with some form of insurance included in the rate of your rental. Then if damage is caused to the vehicle, this insurance will cover you but the rental company will charge you an excess to process your claim. Rental vehicle excess insurance will cover this excess amount.
It really depends on how much risk you're willing to take. Most people like to travel with peace of mind, so if you're like that, then we do recommend some form of rental excess insurance.
No. Rental cars will some sort of insurance called a Collision Damage Waiver or a Loss Damage Waiver which insures the car. This is usually included in the hire rate of the rental car.
While there is this insurance included in the rate, you might still be charged an excess amount which is why you would want rental vehicle excess insurance to cover you for that.
Excess reduction is offered by rental companies to reduce the amount of out-of-pocket expenses if you're rental car is involved in an accident or stolen. While it reduces the excess, you may still be liable to pay the remaining excess which can be hundreds of dollars.
Gary Ross Hunter is an editor at Finder, specialising in insurance. He’s been writing about life, travel, home, car, pet and health insurance for over 6 years and regularly appears as an insurance expert in publications including The Sydney Morning Herald, The Guardian and news.com.au. Gary holds a Kaplan Tier 2 General Advice General Insurance certification which meets the requirements of ASIC Regulatory Guide 146 (RG146).
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