What's in this guide?
- Compare car hire excess insurance providers in 30 seconds
- What is car hire excess insurance?
- What type of damage does excess insurance cover?
- What else will I be covered for?
- How much does car hire excess insurance cost?
- What options do I have for reducing car hire excess?
- Car hire excess insurance vs travel insurance
- Liabilities to be aware of when renting a car
- Pros and cons of car hire excess insurance
- When you won’t be paid
- Accidental damage vs single vehicle accident excess
- How do I avoid unexpected expenses?
- What are my rights if I rent a car?
- Making a claim – tips to make sure you’re paid
- Bottom line
Compare car hire excess insurance providers in 30 seconds
If you rent a car and it’s damaged, lost or stolen, you’ll be charged an “excess” by the rental company (the amount you have to pay before the insurance cover kicks in). It’s typically several hundred pounds. Car hire excess insurance covers this amount so you don’t have to pay it.
Buying car hire excess cover from your hire car company can cost £100 more per week than getting it from a third party provider before you go, so it’s really worth looking for the best deal.
What type of damage does excess insurance cover?
Most policies will cover you for the following types of damage:
- Multi- and single-vehicle accidents
- Cracked or damaged windscreens
- Overhead damage
- Cracked or damaged lights
- Damage to the car undercarriage or wheels
- Damage to bumpers and trim
What else will I be covered for?
- If the vehicle is stolen while you have it
- Cost of returning the vehicle to the nearest car hire location if you’re unfit to take it there
- Repair cost of value of luggage and personal effect that are stolen, accidentally damage or permanently lost. Maximum payment will be applied.
How much does car hire excess insurance cost?
While prices will vary between car insurance companies, the cost of car rental excess cover can be anywhere from £4 to more than £20 per day. It’s particularly worth considering if you won’t be able to afford the excess charge set by your car hire company following any damage.
What options do I have for reducing car hire excess?
You typically have three options
- Excess reduction cover straight from rental company. This is the simplest option in that you can arrange it directly through the rental company. It reduces the excess you will have to pay to a much more reasonable amount, but it’s an expensive option compared with third party cover. However, you won’t have to deal with a separate insurance provider to get your excess is refunded.
Why choose this option? This is typically an option for convenience if you have not bought travel insurance or car hire excess insurance.
- Travel insurance policy with rental excess insurance feature. Usually a feature on comprehensive travel insurance policies, this benefit will reimburse you up to a certain limit for any excess or other deductible you become liable to pay under your rental agreement. This cover kicks in if your rental car is involved in an accident or is stolen, and the hiring arrangement must incorporate comprehensive motor insurance against loss or damage to the car. However, the downside of this cover is that you won’t find it on basic travel insurance policies.
Why choose this option? This is a great option if you are travelling and need travel insurance too.
- Standalone car hire excess insurance policy. This type of cover is designed solely to cover any car rental excess you may become liable for. You can choose from annual or daily cover, and these policies often include cover for damage to areas usually excluded by the rental company, such as the windscreen and tyres. Additional drivers named on the rental agreement are also included on the policy.
Why choose this option? This is a great option if you specifically need a flexible policy designed specifically for car rentals.
Car hire excess insurance vs travel insurance
A few travel insurance policies offer car rental excess insurance as an add-on. The decision of which option to go for will really come down to your own situation and what you want to be covered for. Here are some points on how the two compare:
Standalone car hire excess insurance
- Price not driven by driver age. Usually two age groups of 21-24 and 25-75
- Some policies cover campervans at no extra charge
- No distance restrictions for domestic journey
- Price not impacted by pre-existing medical conditions
- Cover provided for all drivers listed on rental agreement
- Daily rate may work out to be much more expensive than just taking out travel insurance
Car hire excess add-on for travel insurance
- Price can increase significantly for older travellers or those with pre-existing conditions. May end up being much more expensive if you are an older traveller or have pre-existing conditions
- Will usually have to be 250km from residence for cover to apply
Liabilities to be aware of when renting a car
Understanding your car rental agreement and the insurance that applies can be confusing. There are a few key points to remember.
Car hire companies typically offer a basic level of insurance for damage to the car, these are called:
- Collision damage waiver
- Loss damage waiver
- Damage liability fee
Pros and cons of car hire excess insurance
As with any financial decision it is important to weigh up the benefits and the costs of standalone rental vehicle excess insurance cover. We’ve summarised the below to try and make that decision easier for you.
Benefits of car hire excess insurance
- Pay the same despite age. Most insurers will apply the same premium rate for drivers aged 21 – 24 and for drivers aged 25 – 75. By comparison, premiums for UK travel cover usually increase significantly with age.
- Affordability. This type of insurance cover can be up to 60% cheaper than taking out a rental company’s excess reduction option.
- Good option for people looking for basic cover. This type of cover is designed solely to cover any car rental excess you may become liable for, and often covers areas of the car excluded from rental company policies.
- Most policies include cover for luggage and personal effects. If any of your luggage or personal belongings are stolen, accidentally damaged or permanently lost during your journey, your policy will cover the repair or replacement costs. This adds extra peace of mind when you’re travelling.
- Cooling-off period. If you decide that your policy is not right for you, check with the insurance provider to determine the cooling-off period available to you. You will be given a full refund of the premium you paid, provided you have not started your journey and you do not want to make a claim or to exercise any other right under the policy.
- Cover can be taken out on a daily, single-trip or annual basis. Cover can be purchased for just a single day, or on a single-trip basis to cover you for the duration of your rental agreement. Some providers will also offer annual cover to provide a more cost-effective option for those regularly hiring and driving rental cars.
- All drivers are covered. All drivers listed on your rental agreement are typically covered under this type of insurance policy.
- All excess fees covered. Standalone hire car excess insurance cover protects you against all excess fees, even single-vehicle accident excesses.
- Better coverage than rental company cover. Excess reduction cover direct from car rental companies excludes certain types of damage, such as overhead damage, water damage and underbody damage. However, all of these are usually covered under standalone policies.
- Can cover campervans. Most policies will allow you to cover campervans up to 4.5 tones for no extra charge…exclusions usually apply to campervans on travel insurance car hire excess.
- Cover available for international visitors. Cover is usually available for international travellers visiting the UK from overseas.
Disadvantages of car hire insurance excess
- Cover is generally limited to rental insurance excess and luggage and personal effects. However, if you get car rental excess cover as part of a travel insurance policy, this will include cover for other events, such as medical emergencies.
- You may have to pay the excess amount upfront to the car hire company and claim it back from the insurer. If you’ve got a cash flow problem or simply don’t have access to enough money to cover the excess, this could be a significant problem.
When you won’t be paid
As a general rule, you will not be able to make a claim under your car rental excess insurance policy if:
- You were under the influence of alcohol or drugs at the time the loss occurred.
- You do not act sensibly and responsibly to protect yourself and your property.
- You do not do everything possible to reduce your loss.
- Your claim is a result of you breaking the law or breaking any government ban or regulation.
- Your claim is a result of any act of war, rebellion, revolution etc.
- Your claim is a result of any act of terrorism or nuclear contamination.
- Your claim is related to depression, anxiety, stress or other mental or nervous conditions.
- Your claim arises from motor sports of any kind.
- The loss or damage is caused by detention or confiscation by customs or other officials or authorities.
- You are travelling against the advice of your doctor, or if you’ve booked or undertaken your trip after being diagnosed with a terminal illness.
- Your claim arises from or is exacerbated by an existing medical condition.
- Your claim is somehow related to pregnancy.
- Your claim involves suicide or a self-inflicted injury.
Accidental damage vs single vehicle accident excess
When taking out an insurance policy to reduce your excess, it pays to read the small print and make sure you fully understand when your cover will and won’t apply. For example, some insurance policies will reduce your rental excess only 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 an animal, 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 more than a thousand pounds to your overall bill.
Most hire car companies will not make you aware of the single vehicle accident excess when you take out cover. So be ready to read the small print of any rental agreement before signing it to make sure exactly how many excesses each policy has and when they apply.
How do I avoid unexpected expenses?
- Inspect first. Make sure you give your rental car a thorough inspection before you drive away and make sure any existing damage is included in the condition report.
- Read the terms and conditions. Take a close look at your rental agreement and the insurance you have in place. Make sure you’re aware of when you are covered and what is excluded.
- Shop around for insurance. If you’re looking for cover to reduce the excess you’ll have to pay in the event of an accident, compare your options and shop around for a better deal. You may be able to find superior cover directly from an insurer rather than buying from the car rental agency.
- Return time. Arrange to return the vehicle at a time when it can be handed over to a person. Get that person to sign-off on the vehicle’s return so that you are not liable for any damage. Consider taking photos of the vehicle when you return it.
- Pay for tolls yourself. If you can, use your own e-tag so that you aren’t hit with any extra administration charges.
- Damage list. If the car is damaged while it’s in your possession, ask the rental company for an itemised account of any repairs required.
What are my rights if I rent a car?
Most of the rights you have when renting a car are governed by the rental agreement you sign with the car hire agency, so it pays to read the document closely. However, in the UK, you also have some protection under British law. Some of these rights include:
- Consumer guarantees. These mean that the vehicle you rent must be of a reasonable quality (roadworthy, clean, free from defects), must match the model you booked and must be fit for the purpose specified by you or the rental company.
- Protection against unfair terms. In most cases, customers are given protection against things like false and misleading claims, and conduct that is deceptive and misleading.
Making a claim – tips to make sure you’re paid
- Before you travel, make sure you know what evidence you will need to make a successful claim. If you are travelling with expensive items that you wish to cover, it is likely you will need original receipts or proof of ownership. Similarly, in the event of an accident you may need to obtain police and medical reports to validate your claim. Take photos of damage. If another car hits yours, get the driver’s details.
- Contact your insurer as soon as possible. Don’t leave it till you get home to speak with your insurer, contact them as soon as possible so you know exactly what they require for your claim to be paid
- Co-operate. Make an effort to work closely with your insurer to provide them with everything needed for your claim
- Get evidence from officials. If you are trying to claim for loss or theft, or damage to your rental vehicle or luggage, receive an official report from the local policy a representative from your transport official
- Take your time with the claims documents. Make an effort to fill out all the necessary documentation as best you can and provide all the necessary supporting documentation on time
If something goes wrong with your rental car, the rental company will definitely charge you an excess. The only way to avoid this is by getting car hire excess cover. The premiums will significantly vary so it’s always best to shop around to find the most competitive deal for you.
Read more on this topic
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