Car hire excess insurance 2024 | The Independent (2024)

When you hire a car either in the UK or abroad, the car hire firm will usually include basic insurance.

But this insurance will come with an excess. This is the amount that you, the policyholder, will need to pay towards any claim.

Car hire insurance excesses can be very high – much higher than the excess on a standard car insurance policy and often much higher than the cost of hiring the car for a couple of weeks.

Car hire excess insurance can protect you from having to pay the excess in the event of a hire car insurance claim. Read our guide to find out how car hire excess insurance works and how to find the right policy.

What is car hire excess insurance?

Car hire excess insurance helps you avoid a large bill if you need to make a claim on a car hire insurance policy for a vehicle that’s damaged or stolen while in your care.

The excess on car hire insurance can be very high. As an example, the excess on a Jeep Renegade hired from Record Go Rent A Car at Madrid-Barajas Airport is €1,200 (£1,022), whether the claim is for damage or theft. Further afield, excesses can be even higher. If you hired an MG ZS from Goldcar at Sydney Airport in Australia, the excess for damage would be AU$5,500 (£2,844).

In comparison, the excess on a standard car insurance policy is normally £250 to £350.

Car hire excess insurancereimburses you for excess costs in the event of a claim.

It’s not just collisions and damage you need to worry about when you hire a car. If a rental car is stolen, the person renting it is nearly always liable for the excess for theft.

Car hire firms usually try to sell you excess insurance as an add-on either at the time of booking or when you collect the car. It’s typically called a Damage Waiver or a Super Collision Damage Waiver.

But these policies are often overpriced and of poor value – buying a standalone excess insurance policy before you travel is usually better value and often offers superior coverage.

This type of insurance is also known as:

Car rental insurance
Excess waiver insurance
Excess waiver cover
Excess reimbursem*nt insurance

What does car hire excess insurance cover?

Standalone car hire excess insurance typically offers more comprehensive coverage than the policies offered by car hire companies.

The following table shows the cover offered by insurers on Confused.com (correct as of 8 March 2024).

Cover details	Amount
Excess reimbursem*nt	Up to £10,000
Loss damage waiver	Up to £10,000
Towing	Up to £750
Administration charge	Up to £500
Misfuelling	Up to £500
Key cover	Up to £500
Cancellation	Up to £500
Curtailment cover	Up to £300
Drop-off charges	Up to £300
Personal effects	Up to £300
Locked out	Up to £100

One of the biggest names in excess insurance is iCarhireinsurance.com. It offers excess protection of up to £6,000 as standard and a collision damage waiver of up to £100,000 on US, Canadian and worldwide policies.

Another firm, Reducemyexcess.co.uk has a standard cover limit of £10,000 for excess reimbursem*nt.

Car hire excess insurance usually covers damage to tyres, windscreens and the car’s undercarriage. For example, Questor Insurance includes “tyres, windscreen, roof and underbody” damage of up to £10,000.

Some policies contain other extras. RAC’s excess insurance includes cover of up to £1,000 for carjacking or road rage incidents and hotel expenses of up to £150. There’s also the option to add cover for motorhomes and campervans.

How does car hire excess insurance work?

You normally need to be at least 21 to buy car hire excess insurance, and you’ll need to buy cover before booking a rental car. Any cars that you hired before the policy starts won’t be covered.

If your hire car is involved in an accident or is stolen, the hire company should handle it. You’ll need to pay the excess on any claim as normal – so make sure you have sufficient funds in your bank account or available on a credit card. You then claim this money back from your car hire excess insurance provider.

What are the benefits of car hire excess insurance?

For a relatively small outlay, car hire excess insurance provides thousands of pounds worth of cover and peace of mind.

Car hire firms have previously been accused of routinely ramping up the cost of repairs, meaning a small bump or scratch could cost you dearly if you don’t have excess insurance.

Standalone car hire excess cover is almost always cheaper than excess insurance and waivers offered by car hire companies and normally offers more comprehensive cover.

With cover in place before you hire a car, you won’t be pressured into buying extra insurance at the car hire rental desk.

Annual policies are a good deal and are convenient if you hire a car twice or more each year.

Do I need car hire excess insurance?

Car hire excess insurance isn’t compulsory – but it’s well worth having. Without cover in place, drivers could be forced to pay thousands of pounds if their rental car is damaged or stolen.

You can buy car hire excess insurance from the car rental provider, but you’re usually better off buying this cover from a separate specialist company. Stand-alone policies tend to offer more enhanced coverage than those offered by hire companies.

Bear in mind that even minor damage to a hire car can cost you dearly, as evidence shows that car hire firms routinely inflate the cost of small repairs.

How much does car hire excess insurance cost?

Exact policy costs will depend on personal circ*mstances, such as your age and driving history. Where you plan to hire a car matters too – excesses in countries such as the US and Australia can be higher than in Europe, and policy premiums reflect this.

Cover from iCarhireinsurance.com costs from £3.49 a day. Frequent travellers can save money with an annual car hire excess policy, costing from £41.99 for drivers aged between 25 and 80 travelling in Europe.

Reducemyexcess.com offers single-trip cover from £2.57 a day and annual policies from £45.06 for cover in the UK and Europe.

Car hire excess insurance FAQs

Drivers have the option to buy car excess insurance from the hire company – but it’s not a good idea.

Research shows that cover such as a Damage Waiver or a Super Collision Damage Waiver bought from car hire companies tends to be expensive and poor value. Buying a standalone policy from an independent company is a better idea – you’ll usually get a better policy at a cheaper price.

Be wary if a car hire company tries to tell you that a policy with an independent insurer isn’t valid – this isn’t true.

Yes, you can buy annual car hire excess insurance. Whether this is better value than daily or single-trip cover is dependent on the length of your trip and how many times a year you rent a car.

Generally, if you’re looking to hire a car for more than two weeks, it’s normally better value to buy an annual policy instead of a single-trip policy.

However, it also depends on where you’re going, as policies covering the US and Canada will be more expensive than cover in Europe. The best option is to check the numbers on price comparison websites to determine if it’s cheaper to cover all your trips individually or to buy an annual excess policy.

One advantage of annual policies over multiple single-trip policies is that it reduces your admin – and you also know you’ll be covered if you need to hire a car overseas in an emergency.

Multi-trip car hire excess is the same as annual car hire excess insurance – both cover you for unlimited trips in a 12-month period.

Check the small print on annual or multi-trip policies though, as some will set a 31-day limit per car hire.

Travel insurance does not include car hire excess. However, a travel insurance policy may cover some of your costs if you’re involved in a car accident – for example, medical expenses, legal expenses and lost or damaged possessions.

Emma Lunn

Money Writer

Emma Lunn is a multi-award winning journalist who specialises in personal finance and consumer issues.

With more than 18 years’ experience in personal finance, Emma has covered topics including mortgages, first-time buyers, leasehold, banking, debt, budgeting, broadband, energy, pensions and investments.

Emma’s one of the most prolific freelance personal finance journalists with a back catalogue of work in newspapers such as The Guardian, The Independent, The Daily Telegraph, the Mail on Sunday, and the Mirror.

As a freelancer she has also completed various in-house contracts at The Guardian, The Independent, Mortgage Solutions, Orange, and Moneywise. She also writes regularly for specialist magazines and websites such as Property Hub, Mortgage Strategy and YourMoney.com.

She has a real passion for helping people learn about money – especially when many people are struggling to get by in today’s challenging economic climate – and prides herself on simplifying complex subjects.