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Does travel insurance cover car hire excess?

Don't paying extra to reduce your rental car excess. Your travel insurance may have it covered.

If you’re hiring a car as part of your trip, you might as well make sure your travel insurance also covers car rental excess. This will save you time and money. You won’t have to bother with shopping around and a fair few brands already include this benefit without having to pay extra.

What does car rental excess cover with travel insurance include?

Travel insurance can cover you for car hire excess and can be found with most comprehensive travel insurance policies. With this, you can get cover you for:

  • Travel insurance car rental excess. Car rental excess is the amount you are charged by a rental company if your rental car is damaged, stolen or involved in a collision. Travel insurance policies offer cover for car rental excess charges, which can be upwards of $3,000. You can get travel insurance rental car excess with most of the comprehensive policies.
  • 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. 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 Singapore, 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.

Travel insurance car rental excess VS waiving my excess

Before you sign your car rental agreement, car rental companies will offer the option to reduce your car rental excess charge for a daily fee. This is often referred to as an excess waiver or excess reduction option, and you will often be able to reduce the excess to zero if you are 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 a much more cost-effective way to take out financial protection as shown below.

Other car hire concerns

Am I covered for damages and repairs to the car?car-damage

Travel insurance does not usually cover you for the actual damage you cause to a car or the cost of getting that damage repaired. These costs can be covered by physical damage insurance provided by the rental company. This insurance is commonly known as the loss damage waiver or the collision damage waiver, and it’s usually automatically included in the basic cover provided by a rental company. Many travel insurers will only provide cover if your rental agreement includes some form of motor vehicle insurance.

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. This cover can be obtained through the compulsory liability motor vehicle insurance available from the rental company. In fact, 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 Singapore, 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.

Conditions you must adhere to in order to have car rental excess cover

In order to be eligible for travel insurance with rental car excess cover, you will need to make sure you have the following:

  • Basic motor insurance. The car rental company must include CTP (liability) and physical damage cover for the car itself. Most insurers will require both types of cover to be included in your car rental agreement in order for you to qualify for car rental excess cover.
  • Licensed rental company. The vehicle must be rented from a licensed rental company or agency.
    Rental agreement compliance. You must comply with all of the rental company’s requirements as outlined in the rental agreement.
  • Vehicle limits. There may be specific limits regarding the size of the vehicle’s engine or the number of people it can seat. For example, you may only be covered if the car has no more than nine seats.
  • Driving limits. There may be restrictions on where you can drive the vehicle. For example, you may be required to drive only on paved roads.
  • Time limit. Some insurers impose a maximum time limit on the rental contract, such as 15 days.
  • Insured drivers. The car must only be driven by insured persons listed on your travel insurance policy and the car rental contract.
  • Provide documentation in event the event of a claim. You may need to provide copies of supporting documents in order for your car rental excess claim to be approved, such as your rental vehicle agreement, an incident account, an itemised repair bill and written notice from the rental company about the excess you must pay.

What isn’t covered by rental car excess cover

Although cover differs between insurers, your car rental excess claim will usually not be paid if:

  • You fail to comply with the terms of your rental agreement
  • You rent certain excluded vehicles such as commercial vehicles, buses, motorbikes, limousines, or expensive or exotic cars
  • You failed to take out collision damage waiver and third-party insurance cover through the rental company
  • Your claim is for damage sustained on a road that is not cement or tarmac
  • Your claim is for losses sustained because you were driving under the influence of alcohol or drugs, or because you were driving recklessly
  • Your claim involves an unauthorised driver not listed on the rental agreement
  • Your claim is for theft and you cannot produce the keys to the vehicle due to your own negligence
  • Your claim is for theft or damage and your vehicle has been left unlocked or unsecured
  • Your claim is for wear and tear or mechanical or electrical breakdown or failure
  • Your claim is for blowouts or tyre damage, unless caused by fire, malicious damage or vandalism
  • Your claims is for intentional damage caused by you
  • Your claims is for a loss resulting from any sort of illegal activity
  • Your claims involve the use of your rental vehicle to carry passengers or property for profit
  • You were driving the vehicle without a licence

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