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Whether you’re hiring a car for a week or two to get you and your family around on a foreign holiday or need a car for a day or two in the UK – for a big IKEA trip, perhaps – car insurance will typically come as part of the package. But the excesses on rental car insurance can be sky high. If you want to avoid the risk of paying a small fortune if your rental car is damaged or stolen, you’ll need car hire excess insurance. You can buy this directly from the rental company, but you can often get a better deal with a standalone policy. We explain how to get the best cover.
If you rent a car and it’s damaged, lost or stolen, the car insurance you’ll get as part of the rental package should protect you from the worst of the financial impact. But you’ll be charged an “excess” by the rental company – this is the amount you have to pay towards any insurance claim. Excesses for hire cars are typically several hundred pounds and can top £1,000.
Car hire excess insurance covers this amount so you don’t have to pay it.
Excess insurance lets you claim back the excess that would otherwise be payable if your hire car was stolen or damaged following an accident.
Some policies will cover the full amount of the excess, while others will only cover part of it, so check the details before you buy.
There can also be differences in exactly what damage is covered. For example, some policies may exclude damage to peripheral parts of the car, such as tyres, wing mirrors or windscreens.
There are two main ways to get car hire excess insurance.
If you’re taking out a travel insurance policy for the same trip you’re hiring a car for, it could also be worth checking if your travel insurer offers car hire excess insurance as an add-on. If it does, compare the cost of the add-on to the cost of buying a standalone policy.
Bear in mind that if you don’t buy excess insurance directly from the car hire company, it may ask for a large upfront credit card deposit to cover the excess amount. You’ll get this back if you don’t need to claim.
Most policies will protect you from having to pay an excess in the event of the following:
As well as covering the excess, policies may include cover for damage to areas that may be excluded by the rental company’s standard insurance, such as the windscreen and tyres. Additional drivers named on the rental agreement are also usually included on the policy.
When you hire a car, you’ll typically get a basic level of insurance for damage to the car and protection against theft. Usually, this is included in the rental deal; in some countries, such as the US, you may need to pay extra. You may see the following terms used:
However, in the event of an accident or theft of the car, you will be liable to pay an amount towards the claim – known as the excess. All car insurance policies have an excess, but the excesses for hire cars are usually much higher – usually at least several hundred pounds and sometimes more than £1,000.
This is where car hire excess insurance comes in, as it will dramatically reduce or even totally eliminate the amount of excess you have to pay. You’re under no obligation to take out excess insurance, but it can offer a financial safety net should the worst happen.
If you buy cover directly from the company you’re renting the car from, you’ll typically only be covered for the specific car rental period.
If you’re buying a standalone policy, you can choose to buy car hire excess insurance by the day, to cover a specific trip (or trips) or as an annual policy. A bit like annual travel insurance, an annual car hire excess policy covers you for multiple trips within a 12-month period. There may be a limit on each trip length.
You may also have a choice of UK-only, European or worldwide cover.
The best option will depend on how often you need to hire a car and where you plan to travel. If you only hire a car once a year, a single-trip policy will probably be cheaper. If you expect to hire a car more often, check the cost of annual cover too as it may work out cheaper than buying several single-trip policies.
It depends on how you buy it, whether you’re buying a single-trip or annual policy and where in the world you’re hiring a car.
One thing that’s certain is that buying car hire excess cover directly from the rental company is likely to be much more expensive – many firms charge £25 or more per day, adding up to the best part of £200 for a week’s car rental.
Buying it in advance from a standalone insurer could cost as little as £30, or in some cases even less, for the same period of cover.
It’s really worth looking for the best deal well in advance of your trip.
As is often the case with insurance, exactly what is covered and any exclusions will differ between policies. Depending on your needs, it’s worth checking the following:
As well as checking the features and exclusions above, which can vary by policy, as a general rule, you will not be able to make a claim under any car rental excess insurance policy in the following situations:
Some, but not all, car rental companies publish the cost of their car hire excess insurance on their websites. You may be offered the chance to buy it when you book your car hire and doing this is likely to be cheaper than buying it at the desk when you pick up the car.
Before you hit the buy button, though, compare the cost of standalone policies, such as those in the table at the top of this page. Make sure you think about exactly what cover you are likely to need – for example, single-trip or annual cover and European or worldwide cover.
Use the following tactics to avoid paying more than you need to for car hire excess insurance.
It depends on whether you bought your excess insurance directly from the car rental company or from a third-party insurer.
If you bought car hire excess insurance directly from the car rental company and need to make a claim, your cover should be applied automatically. Depending on the terms of the cover, this will either dramatically reduce the excess you need to pay or mean you don’t have to pay any excess at all.
If you bought standalone car hire excess insurance and need to make a claim, the car rental company will deduct the excess from the card you used to pay for the rental. You will then need to claim for the amount of the excess from the third-party provider, which will reimburse you. Make sure you keep hold of any paperwork and receipts relating to the car hire and the claim, as you may need to show these to the third-party insurer.
Here at Finder, we’re all about helping consumers get the best deal. And if you’re looking to get the best price on car hire excess insurance, buying a standalone policy is a no-brainer. Buying a policy from one of the third-party insurers in the table at the top of the page is likely to cost only a fraction of what you’ll pay if you buy cover directly from your rental company.
You’ll also be able to shop around to get cover that has the features you need. If you buy direct from the rental company, you’ll be tied to whatever their policy happens to cover (or not cover). Its policy may, of course, be exactly what you need…but it may not be.
One caveat: if you prize convenience over price, it could be worth considering buying direct. It should make things more seamless in the event of a claim, whereas if you have a standalone policy, you’ll need to pay the excess to the rental company and claim it back from the insurer. But whatever you do, don’t leave that decision till you’re at the rental desk. Doing so could leave you with no choice but to buy an expensive policy that may not cover everything you need.
If your rental car is stolen or damaged, by default the rental company will charge you an excess. The only way to avoid this is by getting car hire excess cover. It can be tempting to assume you won’t have any problems and decide not to pay the extra fee for this, but when excesses can exceed £1,000, this could be a false economy in the event of a claim. Buying from your rental company when you collect the car can be convenient, but also pricey. To keep costs down, shop around among standalone insurers before you go and consider an annual policy if you expect to hire a car more than once a year.
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Do you know of an insurance company who will insure us driving an Avis Hire Car in Capetown, so that it will bring our excess down to Zero. Problem is that my husband is 86 (no one seems to insure anyone older than 85)
Hi Anne,
Thanks for getting in touch with finder. I hope all is well with you. :)
It is true that the age of your husband may decrease your the number of your options. However, it is still worth the try. On this page, we have two options on our panel that you may want to explore. Please review the criteria, details of the insurance policy, and its conditions, then contact the insurer directly to discuss your loan options and eligibility.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua