Protect your plans and your car when overseas
Car hire is one of the best ways to get around overseas. It gives you more freedom to take the trip at your own pace and see the sights you want. However, it also puts you at increased risk of other drivers, poorly maintained roads and potentially enormous rental car insurance excess costs.
Fortunately, travel insurance can cover rental cars in a number of ways, letting you get the same benefits without the same risks.
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Does travel insurance cover the use of rental cars?
Travel insurance will can cover the costs of car rental insurance excess charges that you may be required to pay in the event of a claim with your car rental company.
- Rental car excess cover will not pay for the cost of renting a car in itself, or related costs in an accident, such as injuries caused.
This would require separate travel insurance liability cover. Other related costs, such as towing or vehicle storage fees, should be paid for by the rental car provider’s insurer.
How does travel insurance cover rental car excess?
If you’ve ever rented a car, you might have balked at the listed rental car excess prices. This is how much you’ll have to pay in the event of an accident in the rental car, even if it’s just a minor ding, and in many cases even when it’s not your fault. Car rental excess prices can be as much as $8,000.
That’s where travel insurance for rental car excess can help. This inclusion can pay these astronomical costs if they arise, and is strongly recommended if you plan on renting a car overseas.
- If you have an accident in a rental car, the car hire company will charge you a very substantial fee.
- With travel insurance that includes cover for rental car excess, you can make a claim and have your travel insurance provider pay for it instead.
This is recommended wherever you plan on renting a car, both in Australia and overseas.
What about the excess waiver option?
Some car hire brands will offer you an excess waiver, or excess reduction, option. This reduces your excess, but increases your car hire prices. In other words, car hire companies give you the option of paying a small amount regularly to avoid the risk of needing to pay a much bigger sum at some point, just like insurers.
Travel insurance car hire exclusions to be aware of
Your travel insurance policy will only pay benefits if the situation meets requirements, and if no applicable exclusions are present. They will not pay if:
- The incident was the result of you failing to obey signs, warnings or official instructions
- You were drunk or under the influence of drugs at the time of the incident
- The incident was the result of you behaving recklessly, illegally, dangerously or unreasonably, whether or not you were under the influence of anything
- Your travel insurance policy does not specifically have cover for the relevant rental car situation. Rental car excess insurance, for example, is not always included by default
You should also be aware of the limits of your policy. Even if your policy includes up to $4,000 of rental car excess cover, this may not be enough and you’ll have to pay the difference yourself. Similarly, if you’re depending on cancellation or travel delay cover then you might run up the limits very quickly.
How to claim rental car costs on travel insurance
- For rental car excess, you may be able to provide your travel insurance details to the car hire company, and they can sort it out directly. Sometimes you may have to pay the excess out of pocket and then make a claim later. Remember to provide relevant police reports and other documentation, similar to if you were making a car insurance claim.
- For travel cancellation or delay cover you will probably need to call your insurer and work with them more proactively. You cannot simply rent a car and then expect your insurer to cover it, even if you feel that the situation is one that’s covered by your policy. Contact your insurer first and follow their procedures.
How travel insurance can save you money on car hire
- Travel insurance can pay the car rental excess if needed, up to the applicable limits and if you have it included in your policy. Your other option for avoiding the excess is to get excess waivers or excess reduction options from the car hire company, but this is generally not as good value as travel insurance excess. You can get this by itself, or as an inclusion with other travel insurance policies.
- In some situations, depending on your travel insurance policy, your insurer might pay the cost of renting a car for specific purposes.
Car rental and travel insurance frequently asked questions
What kind of situations does rental car excess cover protect me from?
Any situation where you’d have to pay the specified excess to the rental car company, barring exclusions. This might be if you’ve scratched the paint, put out a headlight, or even totalled the car or if it’s been stolen.
How can I tell if an insurer will pay for me to rent a car?
Your travel insurance policy will typically specify the possibility of claiming car rental under the relevant sections, such as cancellation cover, or special event cover. Do not assume that your insurer will cover it, even if you feel that it’s applicable after reading over the policy. You should contact your insurer in the event of cancellations or trip adjustments as usual, and you might raise the possibility of car hire with them if you feel it’s the best option for the situation at hand.