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The Official Car Rental Blog
22 January, 2013 - Peta Daniels Peta Daniels

Car Hire Insurance & Excess Reduction Options

Insurance is one of our top enquiries received by our customer service team. In many instances, there is a lot of confusion surrounding what is covered, the excess payable, and the amount of standard excess applied to a rental package. We hope this article will assist in explaining the insurance component and the options available to you when selecting a vehicle for hire.

Car Hire Insurance

What Insurance is Included by the Suppliers?

All suppliers displaying their car hire packages with Car Rental Buddy include basic insurance coverage - collision damage waiver, theft waiver, and third party protection.

Insurance Cover

When Do I Pay the Excess?

Excess is the amount you are liable to pay in the event of an accident or if the rental vehicle is stolen. As with your personal car insurance, if you are involved in an accident or theft has occurred, to make an insurance claim you will need to pay the detailed excess as per your policy.

If your rental package has an excess payable of $3,300, it means that you are only liable to pay up to a maximum of $3,300 in the event of theft or an accident. If the damage cost is $10,000, you still only pay $3,300.

Insurance Comparison

Why is the Standard Excess Amount Payable so High?

The standard excess amount for a hire vehicle is generally quite high and is much higher than the standard excess payable for your personal car insurance. It also varies between suppliers, the type of rental vehicle, location, and age of driver.

The important aspect to remember is that rental vehicles are not in the same category as personal vehicles. Car hire vehicles have scheduled bookings and an accident or theft will result in loss of business for the supplier.

Furthermore, every driver that rents a vehicle will have their own driving history and insurance claim record. Whilst the circumstances surrounding the purpose of insurance are similar between your personal and car hire policies, the consequences are different for a supplier and an individual. Unfortunately, car hire suppliers are unable to determine or detail whether a driver is a rating one or not.

Remember: When organising your own personal car insurance, there are various questions insurance companies will present, and the premium you pay can change based on the responses you provide. For example, you generally list on your insurance policy the main drivers of your vehicle. Should a person not listed on the policy be driving your vehicle and they have an accident, your insurance company may void your policy cover.

How Can I Reduce the Excess Amount Payable?

When organising your personal car insurance, you are able to change the excess amount payable. The higher the excess the lower the premium and vice versa. The same situation exists with car hire insurance. If you wish to reduce your excess payable, you are able to purchase excess reduction. Options are usually to reduce the excess to a lesser amount or, in some instances, you can purchase a complete package that offers nil excess.

Excess Reduction Options

Choose What is Right For You

Always select your insurance based on your personal needs and requirements. If you are unsure about any aspect of your car hire terms and conditions, please do not hesitate to contact the supplier directly prior to your pick up date to discuss any concerns, or you may like to ask the customer service representative during the collection period.