Cheap car hire excess insurance

A cheap car hire excess insurance policy can help give you peace of mind when you're hiring a car. Without excess insurance, you risk being out of pocket by thousands of dollars the hire car company will typically charge if your rental is damaged or stolen. But the cost of the policy can be high – sometimes, almost as much as the cost of hiring the car!

Though taking out excess insurance with your car hire policy can be expensive, many people don't realise you can skip the pricey policy the car hire company is trying to sell you and buy your own insurance. Keep in mind, cheap policies can come with a few sneaky exclusions – the devil is in the detail. Here's how to make sure you the pay the least amount possible for protection and you don't get ripped off in pursuit of a bargain policy.

Compare cheap car rental excess insurance

Name	International or domestic cover	Eligible driver age	Features	Starting price (per day)	Apply
Car hire excess	Both	21–75 years	Cover from $4,000 to $8,000 Additional cover for damage to windscreens, roof, tyres and underbody Underwritten by HDI Global Specialty SE - Australia No further excess payable	$9.29 ($0 excess)	Get quote
Rentalcover.com	Both	19–99 years	Complete vehicle coverage for up to $100,000 in damages Coverage for theft, towing, damage to tyres, windscreens, roof, underbody, and key loss Coverage for accident-related charges e.g. admin/processing fees, "loss of use", relocation fees, and more Cancel anytime up until pickup, and for any reason No further excess payable	$7.92 ($0 excess)	Get quote

*Prices are based on a 15-day hire in Australia, as of April 2024. Benefits vary from brand to brand. Always read through the product disclosure statement (PDS) to make sure the product is suitable for you.

What is the excess charge on a rental car?

The excess is the maximum amount payable by you in the event of damage to your hire car – such as a car accident, hitting a pole, someone reversing into you or other types of damage. When you hire a car, the hire company expects the car to return to them in the same condition as when you hired it. If it comes back damaged, they'll charge you to repair it.

Most car hire arrangements in Australia come with some form of protection included – it's called Collision Damage Waiver, and it covers most of the cost of repairs. But there is typically an excess due, which is the most amount you could be charged for the damage. The exact excess amount depends on the hire company, but as a guide, the standard car excess is usually between $3,000 and $8,000, with luxury cars being higher.

Finder survey: Do Australians from different states understand rental car excess cover?

Do I need excess insurance when renting a car in Australia?

Without car hire excess insurance, you might have to fork out up to $8,000 if your rental car is damaged in any way. Cheap car hire excess insurance is helpful to reduce that excess, but your wallet will still take a hit in the even of damage. But your excess won't be thousands, it's more likely to be a few hundred bucks.

Your cover will be limited to your rental agreement without any extra provisions the way other policies might. For example, if your rental agreement doesn't cover damage to windscreens, then your rental car excess insurance won't cover it either. Some brands like Rentalcover.com and Car Hire Excess actually do cover this as an added benefit.

If you prefer more comprehensive cover, then a cheap policy might not be the best idea. As you can imagine, with any cheap policy, you get what you pay for.

Expert insight

"I was travelling in a large van for 6 weeks and decided not to take out the expensive excess insurance offered by the rental company. At one point I went under a bridge and caused some damage to the roof, and I had to pay a $7,000 excess payment! I'll never skimpt on an excess policy again."

Sue

Mother, grandma and travel enthusiast

Does travel insurance cover excess on car hire?

Many comprehensive travel insurance policies include cover for car hire excess cover on both domestic and international policies, so that if you're involved in an accident and your rental company charges you an excess, you can claim on your travel insurance to cover this amount. There can be some restrictions and limitations to look out for; for instance, it might cover a maximum excess of $3,000. Check the details of your specific policy if you're not sure and if the cover isn't enough to give you peace of mind, you can always take out another policy to give the level of cover you want.

How much can I save with a cheap car excess insurance policy?

As an example, in August 2024, we took out a quote on car hire for a compact SUV in Brisbane with a major car hire company. The car hire period was for 7 days, with pick up and drop off at Brisbane Airport.

• The cost of insurance was $751.67.
• CDW is included in the hire. This basic form of insurance covers most of the repairs, subject to an excess.
• The cost of adding Loss Damage Waiver directly with the car hirer to reduce the excess to $0, is $286.37.
• By comparison, taking out a standalone policy with RentalCover.com, costs just $88.26.
• Bottom line: you can save almost $200 by buying your policy directly.
  

  What's not included in budget policies

  Budget policies have appealing price tags but check the policy details to make sure the key things for you are covered:

  • Excluded cover. Windscreens, tyres, roof and underbody may be excluded from cheap car hire excess insurance policies.
  • Cover for specific vehicles. Some policies will only cover certain types of vehicles or exclude non-standard cars, so make sure your car is included if you opt for a cheap policy.
  • Excesses. With a cheap policy, you'll may still have an excess to pay.
  • Additional drivers. Budget cover may exclude additional drivers or charge more to add them onto the policy.
  • Cover for lost keys. More comprehensive policies can also include cover for lost keys and replacements.
  • Cover for administration fees. If you need to make a claim on your rental car, some rental companies actually charge administration/processing fees. This will be a further out of pocket expense with a cheap policy.

  Frequently Asked Questions

  • What is the best way to cover rental car excess?

    The best way to cover rental car excess is often by purchasing a standalone car hire excess insurance policy, which can be cheaper and more comprehensive than coverage offered by rental companies.

  • How much is excess on a hire car?

    Excess on a hire car in Australia typically ranges from $3,000 to $6,000, depending on the rental company and the type of vehicle. Excess reduction options can lower this amount.

  • Do you have to pay excess on a hire car?

    Yes, if your hire car is damaged or stolen, you are usually required to pay the excess, which is the amount you contribute towards the cost of repairs or replacement.

  • Is it better to have a higher or lower excess insurance?

    Whether a higher or lower excess is better depends on your risk tolerance. Lower excess typically means higher premiums, while a higher excess can reduce your premium but increase your out-of-pocket costs in a claim.

  Read more:

  • What's a collision damage waiver?

  • Learn about travel insurance with car rental excess

  • Learn more about Rentalcover.com

Written by

Sarah Megginson

Head of editorial

As an authority on all things personal finance, Sarah Megginson is passionate about helping you save money and make money. She is an editor and money expert with 20 years’ experience and an extensive background in property and finance journalism. Sarah holds ASIC RG146-compliant Tier 1 Generic Knowledge certification, and she's a regular media commentator, appearing weekly on TV (Sunrise, Channel 7 news, Nine news), radio (KIIS FM, Triple M, 3AW, 2GB, 6PR) and in digital and print media. See full bio

Sarah's expertise

Sarah has written 191 Finder guides across topics including:

• Home loans
• Personal finance
• Budgeting and money-saving tips
• Managing the cost of living