What is car rental excess insurance?

There can be various reasons why you might need to rent a car, such as when your own is being serviced or when you need a larger vehicle for moving houses. You’ll likely need to buy a car insurance policy covering the rental car for possible damage, theft, or vandalism during the time you’ve hired it. However, you may have to agree to pay a significantly high excess, which could potentially cost thousands of dollars. Since this can be quite a hit to your savings, consider buying rental car excess insurance, preferably as a standalone policy from a different insurer to the one covering your rental car.

Can I buy a car rental insurance policy with no excess?

When you rent a car and buy a car insurance policy to cover it, you may not have the choice of forgoing an excess. In any case, this is not typically recommended as it can shoot up the cost of rental car insurance. If the rental agency offers you the option of lowering your car rental excess, consider checking how that impacts the rental fee as it may make the rental expensive enough to be unaffordable.

Buying a zero excess car rental insurance policy is usually not recommended as it may increase the cost of renting the car, even making the rental unaffordable. Consider asking the rental agency about the difference lowering the excess makes to rental costs.

You may find buying car rental excess insurance, which can cost less than ten dollars per day, more affordable but you’ll need to buy such a policy before you rent a car. If you’re travelling away from your home city or even overseas and need a rental car, consider checking if your travel insurance includes coverage for car rental excess. You may also want to see if your credit card benefits or rewards include travel insurance as well as car rental excess insurance.

What should I check when buying car rental excess insurance?

If you are buying standalone car rental excess insurance, the first thing you need to check is whether there are any restrictions on the type of car you can rent and what the driving conditions need to be. For instance, you may be planning to drive a four-wheel-drive vehicle in off-road areas, but if your car rental excess insurance policy doesn’t cover either the vehicle or the off-road driving, you could end up having to bear the excess yourself in case of an accident or theft. If you’re travelling internationally, you may need to check whether the excess insurance is valid in all countries.

In some cases, car rental excess insurance may also cover windshield damage, or damage or theft of personal effects, which may not be covered by the car rental insurance. Equally, you may want to check the exclusions of the policy so that you aren’t caught unawares if the rental car is damaged. For instance, you may not be able to file a car rental excess insurance claim if your name is not listed in the car rental agreement, or if you’ve violated any of the terms of renting the car.

Usually, the type of excess covered by such a policy is the accidental damage excess, which applies to accidents involving at least one other vehicle besides yours. This will cover incidents such as your car hitting a tree or an animal when no other car is present. To cover these, you’ll likely need coverage for single-vehicle excess. It is unlikely that this coverage will be included by default in the car rental excess insurance policy, in which case you should speak to the insurer.

Can I avoid buying car rental excess insurance?

You may not be able to rent a car unless you agree to cover the excess either out of your pocket or through a car rental excess insurance policy. However, you may not need to buy a separate excess insurance policy if it is already covered in your travel insurance policy or is available as a benefit through your credit card. In general, considering that your excess liability for damage to a hired vehicle can be a significant expense, buying a separate excess insurance policy can often be worth the additional effort and cost.

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