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.
| Name | International or domestic cover | Eligible driver age | Features | Starting price (per day) | Apply |
|---|---|---|---|---|---|
 | Both | 21–75 years |
| $9.29 ($0 excess) | Get quote |
 | Both | 19–99 years |
| $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.
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.
| Response | WA | VIC | SA | QLD | NSW |
|---|---|---|---|---|---|
| Yes | 4.96% | 7.26% | 6.45% | 4.61% | 7.03% |
| No | 0.83% | 0.33% | 3.23% | 2.3% | 0.61% |
| Somewhat | 1.98% | 3.23% | 0.46% | 1.53% |
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.
"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."
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.
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.
Budget policies have appealing price tags but check the policy details to make sure the key things for you are covered:
CDWs and LDWs can financially protect you and your rental car, but to what extent? Compare 5 major brands to find the best cover for you.
What to do if you have an accident in a rental car and how to protect yourself in the future.
Read the review for Car Hire Excess Insurance. Compare its cover features and receive a quote.
Avoid hefty car rental excess charges with rental cover.
