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Rental car insurance excess
Reduce expensive excess charges when your rental car is stolen or damaged with rental car excess insurance.
What is car rental excess insurance?
Car rental excess insurance is a type of insurance policy that will cover the excess charged by rental companies if the car is damaged or stolen.
That's helpful because it reduces your out-of-pocket expenses. These excess amounts can sometimes be as much as $8,000. So instead of risking thousands of dollars, get rental car insurance and pay as little as $2.83 per day.
Compare car rental insurance in Australia
Call it car hire excess insurance, rental car excess insurance, rental vehicle insurance excess, rental car insurance excess… it's all the same thing. There are different options to suit all budgets so you can save yourself from unnecessary out-of-pocket expenses.
Rental Car Excess Insurance Finderâ„¢ helps you easily compare car rental excess insurance
*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.
How does car rental insurance work?
What vehicles are covered by rental car insurance?
Surprisingly, car rental excess insurance can actually cover most vehicles that includes standard cars, luxury cars, 4WDs, campervans and even motorcycles. Limits to this include the weight of a vehicle (for campervans, the vehicle needs to weigh less than 4.5 tonnes for most brands), the engine displacement of a motorcycle and driving conditions (e.g. icy and off-road). Always check directly with your insurer for exact specifications.
Cars
Luxury cars
4x4s
Campervans
Motorcycles
5 benefits of car hire excess insurance in Australia and overseas
It's affordable
Getting standalone cover is usually much cheaper than cover purchased through a rental car company. On average, car rental excess insurance is three times cheaper than cover from the rental car companies.
Windscreens, tyres, roof and underbody can be included
Brands like Rentalcover.com and Car Hire Excess cover damage to the above even if it's excluded from your rental agreement. This is a special feature of these brands.
Get other helpful inclusions
Some brands will also include cover for your luggage and personal effects, and returning your vehicle to the correct location if you get sick or injured and can't return it yourself.
Covers all sorts of vehicles
Sedans, hatchbacks, SUVs and more – most policies cover an extensive range of vehicles as long as they weigh less than 4.5 tonnes.
Domestic and international policies available
Regardless of whether you're travelling within Australia or overseas, there are standalone car rental excess policies available to suit your needs.
Is it worth it? Yes
For some perspective, here are the minimum excesses charged by major rental companies in Australia. These charges are based on standard 2WD vehicles, that means that the excess amount can increase if you're renting a more expensive vehicle. If you decide not to take out any type of rental car excess cover, you risk having to pay these amounts if the rental car is damaged or stolen.
Alamo - $3,000
Avis - $4,608
Budget - $4,608
Dollar - $4,000
Enterprise - $2,750
Europcar - $5,500
Hertz - $4,800
Jucy - $3,000
Redspot - $4,400
Thrifty - $4,000
In the diagram below, we've compared the price of a policy from Rentalcover.com (in blue) against the price of purchasing cover through a car hire company (in red). You can see a significant difference in price with Hertz being almost five times more expensive than Rentalcover.com. Save money by buying a standalone policy instead of getting cover from a rental company.
Another consideration is that some of these rental companies may only offer an "excess reduction" which lessens your out-of-pocket expenses but doesn't always make it zero.
*Prices are based on a 15-day hire in Australia as of September 2019.
Excess reduction cover straight from rental company
Pros. This is the most convenient option if you haven't already got cover.
Cons. Usually the most expensive way to get cover for car rental excess.
Standalone car rental excess insurance policy
Pros. Affordable and flexible option that can give you additional benefits.
Cons. You'll need to take out cover before picking up the rental car.
Travel insurance including car rental excess insurance
Pros. Affordable option since it can be automatically included in some policies.
Cons. Sometimes not an option if you're hiring a car in your home city.
What's not covered by car rental excess insurance?
When choosing a policy, be mindful and make sure you understand your agreement. There can be big differences between policies so it's relatively safe to say that you get what you pay for.
Car rental excess insurance policies are designed to cover an excess charged by a third party. So if the damage caused to your rental car is not approved as an insurance claim, an excess isn't charged and you won't be able to use your car rental excess insurance policy.
There are some situations and events when car rental excess insurance will not provide any cover such as:
You use the rental vehicle in breach of your rental agreement
You use your rental vehicle without a valid licence
Your claim is for administrative fees charged by the rental company (unless this is included in your policy)
You were driving the rental car while under the influence of drugs or alcohol
You failed to act sensibly to protect the vehicle or your property
You did not do everything possible to reduce or minimise your loss
It arises because you break the law
You travel against medical advice
Your claim arises due to a pre-existing medical condition
Your claim is for consequential loss of any kind, for example loss of enjoyment
Your claim arises due to mental illness, depression, anxiety or stress
Your claim arises because you participate in any race, speed or time trial
Your claim arises from a government authority confiscating, detaining or destroying anything
With this in mind, make sure to check the terms and conditions of whichever cover option you choose to work out when you will and will not be covered.
Travel insurance can cover you for rental car excess insurance, but it doesn't cover your rental car as such.
When you hire a car, the rental company will usually include a loss damage waiver (LDW) or collision damage waiver (CDW) in the price of the hire. This will generally cover the car if you get into an accident or cause damage to the car. While you won't have to pay for the repair directly, the rental company will charge you an excess amount which can usually vary from $0 to $8,000. This is where travel insurance can help.
If your travel insurance policy includes rental vehicle excess insurance, then your insurer will cover the excess amount charged by the rental company so that you don't have to pay for it, as long as your limit is high enough.
An excess is a fixed amount charged to pay for losses/damage. The renter agrees to this amount in the rental agreement and it's usually an out-of-pocket expense if the renter hasn't taken out insurance against it.
Not really, both of them protect you from out-of-pocket expenses which is the most important thing. Rental car insurance will usually cover you for direct losses to the car, whereas car rental excess insurance covers you for the excess amount charged by the rental company for the losses.
Car rental insurance isn't usually compulsory but rules can vary between countries. At the very least, you will usually need a collision damage waiver or loss damage waiver that is the most basic form of insurance when renting a car.
In most cases, no. You can buy rental car excess insurance at any time up until the point of pick up.
Yes, as an overseas visitor you may be eligible for cover with brands such as Rentalcover.com, Car Hire Excess and Tripcover provided you have the right driving permits and stick to the rental agreement of your car hire.
If you purchase an annual multi-trip policy for domestic or international travel, it will provide car rental excess cover for all trips you take during a 12-month period.
No. If you hire two separate vehicles you will be liable for two sets of excess fees from your car rental company, so you will need to purchase separate policies. However, travel insurance can provide cover that applies to any vehicles you hire throughout your trip.
Most insurers will cover any vehicle that has been rented from a licensed motor vehicle rental company, up to a certain weight limit. This includes:
Cars. Sedans, hatchbacks, coupes, station wagons, SUVs.
Four-wheel drives. 4x4 vehicles.
Campervans and motorhomes. Usually up to 4.5 tonnes.
Minibuses. Usually up to a 12-seater.
Make sure you read the PDS carefully to see if your vehicle type is automatically covered, as some insurers may require you to take out a separate policy for larger vehicles like campervans, motorhomes and minibuses.
Commercial vehicles of any kind will not be covered by a standard rental excess insurance policy.
Driving on sealed roads only is a common condition on car rental contracts, and car rental excess insurance policies will not provide any cover if you breach your rental contract. Check the contract and your insurance PDS for more information.
Yes. No matter where you are in Australia, it's mandatory to have third-party insurance in order to register a car, so make sure the rental company has this type of cover in place. Third-party insurance covers you when you cause injuries to other people.
The rental company's basic level of cover will automatically set your liability in the event of damage to the vehicle at a certain level, typically around $3,000 or $4,000. This is the excess you will need to pay, but it can also be known by names such as collision damage waiver, loss damage waiver and damage liability fee.
If you want to reduce this excess, you can purchase cover through the rental agency or one of the other options.
Reading the fine print of rental car insurance cover may be a boring task but it's also an important one. Giving the terms and conditions a quick read is an easy way to pick up on any crucial distinctions that can make a huge difference to your level of cover.
For example, some insurance policies will only reduce your rental excess if your car is involved in an accident with another vehicle. This is called the accidental damage excess. However, many people are unaware that if they are involved in a single-vehicle accident, such as scraping the car on a wall or maybe hitting a kangaroo, a separate excess will apply on top of the accidental damage excess. This second charge is the single-vehicle accident excess, and can end up adding another couple of thousand dollars to your overall bill.
Most hire car companies will not make you aware of the single vehicle accident excess when you take out cover. Read the fine print of any rental agreement before signing it to familiarise yourself with exactly how many excesses each policy contains, and in which situations they apply.
Most comprehensive travel insurance policies, whether for domestic or international trips, will include car rental excess insurance as a built-in feature. Those policies that don't include it as standard will usually offer it as an extra-cost option.
So what's the difference between standalone car rental excess insurance and comprehensive travel insurance and which option is the best choice for you? Check out the comparison table below to help you decide.
Standalone car rental excess insurance
Comprehensive travel insurance
What is it designed to do?
Cover car rentals only.
Cover a broad range of travel risks and events.
How much excess cover is available?
Can cover up to $8,000.
Cover usually limited to $5,000.
What damage is covered?
Covers an extensive range of damage.
May exclude costs such as damage to bumpers, interior trims, windscreens, tyres and single vehicle accidents.
Does it cover anything else?
Yes. Luggage and personal effects.
Yes.
Overseas medical expenses
Trip cancellation and interruption costs
Lost and stolen luggage
Travel delay
Luggage delay
Many other benefits
How much does it cost?
Varies depending on insurance provider, length of car hire, standard excess payable and other factors. Prices start from around $6 a day.
Varies depending on many factors including length of journey, where you're going, number and age of travellers covered etc.
Why you should consider it
Designed specifically for rental cars and offers a higher level of cover for rental excess than travel insurance.
Offers cover for damage caused by a broad range of events.
Covers all drivers listed on the car rental agreement.
No distance restrictions applied to domestic journeys.
Provides crucial cover for car rental excess.
Also covers many other expenses that could ruin your holiday.
Can give you greater peace of mind when you travel.
If you think you could benefit from the extensive additional cover provided by comprehensive travel insurance, you should definitely consider buying it instead of standalone rental excess insurance. Travel insurance includes a long list of benefits for travellers, including cover for:
Overseas emergency medical expenses
Cancellation costs when unexpected circumstances force you to cancel your trip
Lost, stolen and damaged luggage and personal belongings
Travel delays and delayed or misplaced luggage
Theft of cash
Trip interruption
Personal liability for causing death or bodily injury to someone else
Particularly if you're planning an overseas holiday, travel insurance is simply an expense you must consider. Medicare doesn't cover your medical costs overseas, so unless you're travelling to a country with which Australia has a Reciprocal Health Care Agreement, travel insurance is the only thing standing between you and potentially massive medical bills.
If you're looking for peace of mind and protection for a broad range of risks and events, travel insurance may very well be the best choice.
If you purchase excess reduction cover from a car rental company, you'll simply have the reduced excess charged to your credit card after returning the vehicle. However, if you're covered by domestic travel insurance or standalone rental excess cover, you'll need to pay any excess you're charged out of your own pocket and then lodge a claim with the insurer to be reimbursed.
The process for lodging a claim will vary depending on the insurer, but you will usually need to follow a few simple steps:
Download and complete a claim form.
Provide copies of any supporting documentation requested by the insurer, such as police reports, repair invoices and copies of the rental agreement.
Submit your completed claim form and supporting documents by post, fax or email.
Your claim will then be processed and paid as soon as possible. Please note that the benefit you receive may not cover admin and/or transaction fees charged by the rental company.
Jessica Prasida is a travel insurance expert for Finder. She lives and breathes travel, having worked as a travel agent and branch manager at STA Travel for over 4 years, then writing about travel insurance with Finder for another 5 years. Jess has a Bachelor of Business from the University of Technology, Sydney and a Tier 1 General Insurance qualification. See full bio
Hi John, rental excess insurance usually does not cover you for damage to another vehicle or if the accident results in injuries. However it depends on the specific clauses and coverage in your policy.
I am looking at hiring a rental car for a trip within Australia from one of the major rental companies, All have ‘CDW’ with an excess. Do you know if the CDW insurance on the hire car also covers third party property and vehicle damage caused by an accident when the driver of the hire car was found to be technically at fault.
Inclusions of your Collision Damage Waiver (CDW) will depend on which rental company you hire the car from, they’re not all the same. So just make sure you read the fine print when you’re hiring. Most CDW’s will cover third-party damage but be careful when it comes to damage when you’re at fault.
If you’re trying to reduce your financial risk when hiring a car, you might also want to consider taking out rental car excess insurance to avoid more out-of-pocket expenses.
Hello, this week I hired a hitop campervan for the first time. I hired it on the Saturday intending to leave early morning Sunday. I unthinkingly drive it into an underground carpark which damaged the top. I did all the right things and took it back in the morning. They didn’t have another vehicle I could use and said the manager would contact me on Monday. We hired from another company and went on our trip. We didn’t hear from the manager until Thursday despite calls to them every day, he was always unavailable. I had the top insurance, no excess and covered overhead damage. But no where in their terms can I see anything about refunding us if they can’t supply us with another vehicle. The insurance covers for loss of use. No where did I sign anything that states I wouldn’t be entitled to a refund if amaccident iccurs and I can’t have another vehicle. . Should I be entitled to all or some of the fees paid? Cheers Shan
Sorry to hear about the rough start to your trip. This page is about car rental excess insurance which typically only covers the excess amount charged by rental companies if damage is caused to the rental vehicle.
You might be entitled to your expenses if you have any other insurance like travel insurance or maybe even the insurance offered by the rental company. It sounds like you might be able to claim under “Additional expenses”. I would still give them a call directly, explain the situation and ask if there is any benefit under your policy.
I hope this helps and that you enjoy the rest of your trip.
As an overseas visitor, you are eligible for car rental insurance in Australia provided you have the right driving permits and stick to the rental agreement of your car hire.
I have booked a rental car in WA and am looking for independent excess insurance,
I can find plenty of information that covers the rental vehicle but very little about third party property, as in having and accident that I am at fault. Do any of theses insurances including over the counter ones, cover the other vehicle?
You are correct – the page that you are checking is correct when you are ready to compare options for car rental excess insurance. You may refer to our page that compares property damage liability coverage policies and learn more about your options. On the page, you may read more about it and also compare companies that offer such coverage.
Please make sure to check eligibility requirements and T&C prior to applying.
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It's affordable
Windscreens, tyres, roof and underbody can be included
Get other helpful inclusions
Covers all sorts of vehicles
Domestic and international policies available
Hi John, rental excess insurance usually does not cover you for damage to another vehicle or if the accident results in injuries. However it depends on the specific clauses and coverage in your policy.
I am looking at hiring a rental car for a trip within Australia from one of the major rental companies, All have ‘CDW’ with an excess. Do you know if the CDW insurance on the hire car also covers third party property and vehicle damage caused by an accident when the driver of the hire car was found to be technically at fault.
Hi Stuart,
Thanks for reaching out to us at Finder!
Inclusions of your Collision Damage Waiver (CDW) will depend on which rental company you hire the car from, they’re not all the same. So just make sure you read the fine print when you’re hiring. Most CDW’s will cover third-party damage but be careful when it comes to damage when you’re at fault.
If you’re trying to reduce your financial risk when hiring a car, you might also want to consider taking out rental car excess insurance to avoid more out-of-pocket expenses.
I hope this helps.
Kind regards,
Jessica
Hello, this week I hired a hitop campervan for the first time. I hired it on the Saturday intending to leave early morning Sunday. I unthinkingly drive it into an underground carpark which damaged the top. I did all the right things and took it back in the morning. They didn’t have another vehicle I could use and said the manager would contact me on Monday. We hired from another company and went on our trip. We didn’t hear from the manager until Thursday despite calls to them every day, he was always unavailable. I had the top insurance, no excess and covered overhead damage. But no where in their terms can I see anything about refunding us if they can’t supply us with another vehicle. The insurance covers for loss of use. No where did I sign anything that states I wouldn’t be entitled to a refund if amaccident iccurs and I can’t have another vehicle. . Should I be entitled to all or some of the fees paid? Cheers Shan
Hi Shan,
Thanks for getting in contact with us at Finder!
Sorry to hear about the rough start to your trip. This page is about car rental excess insurance which typically only covers the excess amount charged by rental companies if damage is caused to the rental vehicle.
You might be entitled to your expenses if you have any other insurance like travel insurance or maybe even the insurance offered by the rental company. It sounds like you might be able to claim under “Additional expenses”. I would still give them a call directly, explain the situation and ask if there is any benefit under your policy.
I hope this helps and that you enjoy the rest of your trip.
Kind regards,
Jessica
I am Hong Kong resident, will travel to Australia, would like to rent a car , may I know can I buy this car excess insurance?
Hi Hong,
Thanks for reaching out to us at Finder!
As an overseas visitor, you are eligible for car rental insurance in Australia provided you have the right driving permits and stick to the rental agreement of your car hire.
I hope you found this helpful.
Kind regards,
Jessica
I have booked a rental car in WA and am looking for independent excess insurance,
I can find plenty of information that covers the rental vehicle but very little about third party property, as in having and accident that I am at fault. Do any of theses insurances including over the counter ones, cover the other vehicle?
Hi Eric,
Thank you for leaving a question.
You are correct – the page that you are checking is correct when you are ready to compare options for car rental excess insurance. You may refer to our page that compares property damage liability coverage policies and learn more about your options. On the page, you may read more about it and also compare companies that offer such coverage.
Please make sure to check eligibility requirements and T&C prior to applying.
Hope this helps.
Cheers,
Val