Are you planning on renting a car soon for a holiday or road trip? Don’t get stung paying the car rental excess insurance - at least not before you check your credit card policy.
Many credit card providers offer complimentary excess insurance on rental cars as an added perk.
What is car rental excess?
Excess is the agreed amount of money that you would be liable for if there was any damage to your rental car during the rental period. The amount of excess can put consumers in a tricky position, tacking on hidden fees and rates to what may have appeared from the outset to be an affordable rental car.
For example, you may find a rental car rate that you are happy with, only to discover that it includes insurance with a $4,000 excess. This means that you would need to pay $4,000 out of your own pocket to cover the cost of any damage to the rental car.
Here’s the kicker - you can reduce your car rental excess, for a price. This means paying more to hire the car in the first place, turning your affordable rate not-so-affordable in a very short space of time.
How can my credit card reduce my car rental excess?
Many credit cards offer free car rental excess insurance as an added benefit.
This benefit usually comes bundled with other travel insurance perks, such as lost or stolen personal property, medical and hospital and travel cancellations.
What should I look out for in a credit card with rental car excess insurance?
It’s important to remember that your credit card doesn’t automatically cover you for rental car excess. Rather, your credit card provider may offer a complimentary insurance policy that could partially or entirely cover the cost of your car rental excess (should you need it).
Like all insurance policies, it’s important to find out the policy name, and read the product disclosure statement (PDS) before you rely on it. Many of these insurance policies will not cover your car rental excess in certain situations, such as if you violate the terms of the car rental agreement or if the cardholder is not driving the car at the time of the damage or accident.
How do I find a credit card with free car rental insurance?
When comparing credit cards, look out for phrases such as “rental vehicle excess insurance”. You should also look out for cards that are marketed as a travel credit card, or advertise travel insurance perks or benefits. Rental car insurance can usually be found bundled into a more comprehensive travel insurance policy, and less often as a standalone perk.
As with all credit cards, make sure to weigh up the cost of the annual fee and interest rate compared to the perks or benefits before committing. If everything else adds up, you may have found a way to reduce your car rental excess without paying through the nose for it.
^The best credit card for you may not be the best option for somebody else in different financial circumstances. As well as looking at the excess insurance options, it's important to consider the other features and benefits from a variety of credit card providers to ensure you're receiving value. If you're not sure which credit card could be the best option for you, consider contacting a qualified financial adviser.