Rental car insurance excess

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. This feature is available on some credit cards.

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.

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:

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:

1. Download and complete a claim form.
2. Provide copies of any supporting documentation requested by the insurer, such as police reports, repair invoices and copies of the rental agreement.
3. 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.