Does travel insurance cover car hire excess?

Travel insurance with rental car excess cover

Many comprehensive travel insurance policies come with rental car excess cover. If you're involved in an incident and your rental company charges you an excess, you can claim this back with your travel insurance.

If something happens, the rental company will typically charge you the excess amount then you can get reimbursed by your travel insurer. Just make sure you get a copy of the receipt showing the excess amount charged by the rental company.

Rental vehicle excesses range from around $2,000-$8,000. Travel insurance policies differ in how much they cover you for though the minimum for most is $2,000. Some go further than others. For example, Southern Cross Travel Insurance can cover you for up to $10,000.

What does travel insurance with rental car excess cover?

The car rental excess

If something happens and you need to pay the car rental excess, travel insurance can cover the costs. You can get overseas and domestic travel insurance rental car excess with most comprehensive policies. Some policies cover you for up to $10,000.

Transportation of the vehicle back to the car rental depot

If you suffer an injury or illness during your journey, you may not be in a fit condition to drive your rental car to the nearest depot. When this happens, some insurers will cover the cost of returning the car to the nearest depot, as long as you can obtain written confirmation from your medical adviser that you are unable to drive.

Medical expenses if you get into an accident

If you crash your car and need ambulance transportation, medical treatment, hospital accommodation and even repatriation to Australia, comprehensive travel insurance can cover the costs.

How Nicola avoided paying a $1,400 car rental excess

"I knew we were hiring a car and had heard stories of the crazy repair costs and excess fees so I got a domestic travel insurance policy, mostly for the rental car excess cover. I paid just $48.96 for a domestic plan with InsureandGo for the 10 days. At less than $50 for 10 days, the entire policy was cheaper than the excess insurance offered by the rental car company. Lo and behold, I ended up hitting a wallaby on our drive back from Cradle Mountain. I was devastated, but I didn't give much thought to the car. The damage seemed pretty minimal and I figured it would be a couple of hundred dollars at most. It was not. I was immediately charged the full excess of $2,750. $1,475 of that was considered damage (the rental company charged additional fees including a claims fee and a charge for time off-road), and I was eventually refunded $909. But as soon as I got home, I filed a claim with the travel insurer and they were great – far better to deal with than the rental company. There were no further shocks or surprises. I had a policy excess of $100 but InsureandGo paid out $1,375 within a matter of days."

Nicola Middlemiss

Journalist

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Travel insurance car rental excess vs waiving my excess

Before you sign the rental agreement, car hire companies will offer the option to reduce your excess charge for a daily fee. This is often referred to as an excess waiver or excess reduction option.

Often you'll be able to reduce the excess to zero if you're willing to pay the additional amount. While this may sound like an attractive option, paying a daily fee to reduce your excess can actually work out to be quite costly. A travel insurance policy that includes car rental excess cover is usually a much more cost-effective way to take out financial protection.

Frequently asked questions

• What types of vehicles are typically covered for rental car excess?

  Travel insurance policies generally cover standard passenger vehicles like cars, vans and utes. However, there are often exclusions for certain types of vehicles such as motorhomes, caravans, campervans, motorcycles, scooters, mopeds, commercial vehicles, trucks, trailers, off-road vehicles or any vehicle not suitable for public roads. Always check your policy's Product Disclosure Statement PDS to confirm what is covered.

• Am I covered if someone else is driving the rental car?

  Yes, typically your travel insurance will cover rental car excess even if another authorised driver is behind the wheel, provided they are listed on the rental agreement and meet your policy's conditions. It is crucial that all drivers of the rental car are included on the official rental agreement for the cover to be valid.

• Does travel insurance cover damage to tyres, windscreens or the undercarriage?

  Cover for specific parts like tyres, windscreens, roof, headlights or the undercarriage can vary significantly between travel insurance policies. While some comprehensive policies may include this cover, many exclude it or treat it as an optional extra. Always review your policy's PDS to understand exactly what is and is not covered regarding these specific components of the vehicle.

• How do I make a claim for rental car excess through my travel insurance?

  To make a claim for rental car excess, you will typically need to contact your travel insurer as soon as possible after the incident. You will need to provide documentation such as a copy of your rental agreement, evidence of the excess charged by the rental company, a police report if applicable, repair invoices and any other relevant details or photos of the damage. Always follow the specific claims procedure outlined in your policy's PDS.

• Are there any common situations where rental car excess cover would not apply?

  Yes, there are several common situations where your travel insurance may not cover rental car excess. These often include damage from driving off-road, driving under the influence of alcohol or drugs, dangerous or reckless driving, using the car for racing or commercial purposes, failing to report an accident to the police or rental company or leaving the keys unattended.

• Does my credit card provide car rental excess cover?

  Some premium credit cards offer complimentary car rental excess cover as a benefit when you pay for the rental car with that card. The level of cover and terms can vary greatly between different credit cards and card providers. It is essential to check with your credit card issuer directly to understand any exclusions, maximum cover limits, geographical restrictions or activation requirements before relying on this benefit.

• What is the maximum amount my travel insurance will pay for rental car excess?

  The maximum amount your travel insurance will pay for rental car excess varies by insurer and policy. Most comprehensive travel insurance policies offer cover ranging from $2,000 to $10,000 or more. You should always check the specific limits stated in your policy's Product Disclosure Statement to ensure it meets your needs, especially if you are hiring an expensive vehicle with a high excess.

Written by

Gary Ross Hunter

Journalist

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Gary Ross Hunter has over 6 years of expertise writing about insurance, including life, health, home, and car insurance. Having reviewed hundreds of product disclosure statements and published over 800 articles, he loves simplifying complex insurance topics for everyday readers. Gary has contributed to major outlets like Yahoo Finance, The Sydney Morning Herald, and news.com.au, and holds a Bachelor of Arts (Honours) in English Literature from the University of Glasgow, along with a Tier 2 General Advice certification, ensuring his work adheres to ASIC’s RG146 standards. See full bio

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Gary Ross has written 521 Finder guides across topics including:

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