How you can avoid paying a hefty excess when your hire car is crashed, stolen or damaged.
When you’re picking up a rental car, buying extra insurance probably isn’t the first thing on your mind. If you’ve already spent big on flights, accommodation and the hire car, why would you want to fork out even more for insurance you may never use?
The reality is that insurance to reduce or eliminate your liability for damage to your rental car is often a very wise investment. Read on to find out why.
Save yourself the trouble. Compare car rental excess insurance.
1. Excess charges are way higher than you expect
Have you ever taken the time to take a good look at a car rental agreement, or listened closely to rental agency staff when you pick up a hire car? If you haven’t, you might be surprised to learn that car rental companies can charge you for any damage to the vehicle. You’ll be charged up to the excess amount listed on your rental agreement – this is usually between $3,000 and $6,000, but could be more than $8,000 in some situations.
That’s a lot of money for most people, and driving around in a hire car with that sort of figure in the back of your mind could be enough to stop you enjoying your holiday. Worse, if the car is damaged and you don’t have any rental car insurance excess cover in place, your bank balance will take a big hit.
2. You can't predict the future
Not worried about the excess because you’re a safe driver? Well, we hate to be the bearer of bad news, but you don’t have to be responsible for the damage in order to be charged for it.
That’s right – if the car is damaged while in your possession, the hire company will hold you liable. Even if the accident was entirely not your fault, or it was stolen or maliciously damaged by some unknown third party, you’ll need to pay for the cost of repairs (up to the excess amount).
Accidents and unexpected mishaps can and do happen at any time, so it’s well worth your while to take out protection.
3. You can shop around for cover
If you don’t want to purchase excess reduction insurance from your rental provider, you don’t have to. In fact, the policy your rental provider offers will usually be quite expensive, ranging anywhere from $20 to $50 per day, which can dramatically increase the total cost of car rental.
Leaving it until the last minute can also mean that you end up settling for a policy that offers a low level of cover. Many over-the-counter insurance products have a range of exclusions and restrictions, such as no cover for windscreen or tyre damage, so it’s worth shopping around to see what other protection is available well in advance of picking up your rental.
The good news is that there are several other cover options available to help protect you against a big rental car excess:
- Standalone cover. Select insurers offer car rental excess insurance as a standalone policy. This cover is much cheaper than the policies offered by hire agencies and is specifically designed to provide financial protection when renting a car.
- Travel insurance. Many comprehensive travel insurance policies include rental car insurance excess cover as a standard feature, while others offer it as an extra-cost option. Not only does this mean that you’ll be covered if your rental provider slugs you with a hefty insurance excess, but it also means you can enjoy the broad range of benefits also included in a travel insurance policy.
- Credit card travel insurance. You may not even need to purchase any additional insurance to get the cover you need. If you have a high-end credit card that includes complimentary travel insurance, check to see whether car rental excess cover is one of the standard benefits. If it is, remember to make sure you take whatever steps are necessary to activate cover, such as using your card to pay for your holiday.
4. It’s more affordable than you might think
No matter what type of insurance you’re shopping for, cost is always going to be an important factor. You’ll need to weigh up the cost of buying cover against the financial impact of having to pay the rental company’s excess.
As we mentioned above, excess reduction products purchased directly from the rental agency rarely offer good value for money. Depending on the length of time for which you’re renting a car, these policies can potentially add several hundred dollars to the cost of car hire.
However, you may be surprised to learn just how affordable it can be to get cover elsewhere:
- Standalone cover. Standalone car rental excess policies can provide the cover you need from around $6 a day.
- Travel insurance. Use our travel insurance quote engine to find out how much it’ll cost you to purchase travel insurance (including many other benefits on top of car rental excess cover) for your entire trip.
- Credit card travel insurance. This cover is “free” – sort of. While you’ll already be paying an annual fee for your credit card and you’ll probably need to pay for a certain portion of your travel expenses with the card, there’s technically no additional expense to worry about.
Check out our guide to car rental excess insurance to find out how you can compare your options and find affordable cover.