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

Senior writer

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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 as shown below.

Frequently asked questions

• What is rental car excess in travel insurance?

  Rental car excess cover is included with many comprehensive travel insurance policies. It pays for the excess if your rental car is damaged, stolen or involved in an accident.

• Does travel insurance cover motor vehicle accidents?

  Travel insurance will indirectly cover you for the costs involved if there's damage or loss to your rental car.

  When you hire a car, it usually comes with its own form of insurance called a loss damage waiver or the collision damage waiver. If you get into an accident and damage the car, you'll be charged an excess by the rental company and that's the amount your travel insurance should cover you for.

• Am I covered if I injure someone else or cause damage to their car?

  Travel insurance policies typically include personal liability cover, but they do not offer protection if you injure someone else or damage someone else's property while driving a rental car.

  You can get this cover through the compulsory liability motor vehicle insurance available from the rental company. Most travel insurers include a requirement for your car rental agreement to have third-party liability motor insurance.

• Am I covered for medical expenses if I get into an accident?

  Travel insurance provides cover for medical costs if you're injured in an accident overseas. If you crash your car and need ambulance transportation, medical treatment, hospital accommodation and even repatriation to Australia, your travel insurer will be able to cover the costs. You won't receive any cover if you break an exclusion on your policy, such as failing to follow the road rules in the country you're in, so make sure you're aware of the exclusions in your policy before you get behind the wheel.

Written by

Gary Ross Hunter

Editor, Insurance

Gary Ross Hunter was an editor at Finder, specialising in insurance. He’s been writing about life, travel, home, car, pet and health insurance for over 6 years and regularly appears as an insurance expert in publications including The Sydney Morning Herald, The Guardian and news.com.au. Gary holds a Kaplan Tier 2 General Advice General Insurance certification which meets the requirements of ASIC Regulatory Guide 146 (RG146). See full bio

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Gary Ross has written 644 Finder guides across topics including:

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