What is Car Rental Excess Insurance?

Car rental excess insurance provides cover for the excess charge imposed by a car rental company when your hire vehicle is involved in an accident, damaged or stolen.

When you pick up your rental car, you will be asked if you want to take out additional insurance. If you decide not to take the excess reduction insurance and the car is damaged you will have to pay to cover the cost of the damage up to a pre-determined amount – this is known as an excess charge. Depending on the car hire company this excess charge can be up to $5,000. To reduce this excess cover to $0 or a smaller figure, eg $500, you need to take out excess reduction insurance, sometimes referred to as additional car insurance or SuperCover by the car hire companies.

Rather than adding the cost of car hire excess insurance to your car hire cost you can purchase car hire excess insurance from other insurance companies at a much lower rate.


Car and Campervan Rental Insurance Excess Options

When I hire a car I have found the most economical way to cover car rental excess insurance is to buy a seperate travel insurance policy that includes car rental excess insurance cover, or use an insurance company that specialises in car rental excess insurance.

Example – I regularly hire a Hertz car in Brisbane. Rather than pay the Hertz Supercover Excess Insurance, I have the option of purchasing a Travel Insurance Policy for Australian domestic travel, or choosing one of the insurance companies that specialise in car rental excess insurance, eg Rental Car Protection. I have used both of these options in the past, see below for an example of costs for a 7 day hire:

  • Hertz Supercover 7 days @ $25.90/day = $181.30
  • Travel Insurance Australian Domestic Policy 7 Days: $71.00
  • Rental Car Protection Policy 7 Days: $61.67

In this example the Rental Car Protection Policy is cheaper, however for the extra $10 you get other policy benefits with the Travel Insurance policy such as cancellation costs, theft of personal items, medical costs etc. Note that the above Travel Insurance and Rental Car Protection policies are for one driver, if you insure two drivers this will double the cost. The Hertz Supercover covers additional drivers.

Disclaimer: the above applies to my personal situation and does not take into account your individual requirements, age, medical situation etc. Please ensure you read the Product Disclosure Statement (PDS) for each policy to ensure the travel insurance meets your needs and situation.

Travel Insurance Discounts, ABN 70 659 650 230 is a distributor of nib Travel Services (Australia) Pty Ltd (nib), ABN 81 115 932 173, AFSL 308461 and receives a commission for nib products purchased through Travel Insurance Discounts. Travel Insurance Discounts acts as an agent for nib and not as your agent. Travel Insurance Discounts cannot give advice about nib products, and any factual information provided is not intended to imply a recommendation or opinion about nib products. Before you buy, please read the Product Disclosure Statement, Financial Services Guide and Target Market Determination (TMD) available from us. If you have a complaint about a nib product, see the Product Disclosure Statement for the complaints process. This insurance is underwritten by Pacific International Insurance Pty Ltd, ABN 83 169 311 193.