If you have financial products such as home insurance or regular car insurance then you may have heard of the ‘excess’. Typically the ‘excess’ is the amount of money that you need to pay toward any claim that you make on the insurance policy. If you are renting a car, you generally have insurance included in with the rental and this insurance policy comes with a certain amount of excess. You may therefore wish to take out car excess insurance to help cover the cost of the excess.

Why do I need two different types of insurance?

When you rent a car, the company typically wants you to take out insurance in the event of you;

• causing an accident with the rental car which damages the car;
• causing damage or harm to a third party or their property.

The standard form of insurance policy typically pays out toward the above if you make a successful claim, but there is the generally an excess to be taken off any claim you make. The amount of excess may differ depending on the rental company, so it may pay to check this out.

The car excess insurance policy provides you with insurance solely for the amount of excess you have to pay if making a claim and the claim is successful. This type of insurance policy does not payout for anything else, such as third party claims or damage claims.

Do I have to take out insurance?

The answer to this question may depend on the country that you are in when hiring the car and the company you choose. Without insurance you may end up having to pay out an unexpected sum of money if you have an accident in the rental car. If you only have standard rental car insurance, you generally have to pay the excess for a successful claim and the rental company usually takes this from your credit card. If you have rental car excess insurance, the excess is still taken from your credit card and you then claim it back (up to a set limit).