How much is the excess on a policy?

The amount of excess you may have to pay typically depends on your rental company. Some may ask for a lower amount than others. Whatever the amount of excess, this is money that has to be found out of your own pocket. However, with a car hire excess insurance policy behind you the financial costs for the excess generally come from the insurance policy. Your excess policy may cover the whole amount of the excess or up to so much of it. Even if you have to pay a small amount of the excess yourself, the insurance may save you a great deal of money in the long run.

So where might I get insurance for the excess?

The car rental company may ask you to take insurance from them, and they may even offer car hire excess insurance. However, you may be able to make savings on the cost of the insurance premiums simply by going to a specialist hire car excess insurance online provider. When taking on any form of insurance there are typically terms and conditions, so always ensure that you have checked these. Finding out that you cannot make a claim on the policy when you need may be devastating financially.

What are excess charges?

When renting a car you usually have some form of insurance with the company you are renting from. This insurance typically provides protection against damage to the rental car, along with liability insurance for the third party. Typically a policy comes with what is known as excess. This is the amount that you need to pay if you make a claim before the insurance company takes over the rest of the claim. Typically this amount is taken off the credit card you paid with when renting.

What does the policy cover?

Car hire excess insurance typically covers or reduces the amount of excess you have to pay, up to a set limit.

Frequent users of rental cars

If you are a frequent user of rental cars you may be wise to check if you are able to take out an annual rental car insurance policy.

Typically car hire excess insurance is taken out at the time you hire a car. However you do not have to take out excess insurance with the place you hire your car from, you are able to search for a policy independently, and this may be a suitable way to save on the cost of cover. As with any type of insurance policy always check over the small print of any rental insurance you are offered.

If the idea of purchasing ‘additional insurance’ for a rented car doesn’t immediately seem to sound like the best idea you’ve ever heard, it may pay to read on. You may save yourself some serious amounts of money!

Rental company insurance cover

The rental company’s insurance whether purchased separately or included in the rental cost, typically provides cover against third-party claims (third party liability insurance) and damage to the rental car (CDW or Collision Damage Waiver).

It may also come with what’s called an ‘excess’.

The excess is a financial amount, usually set between £500-£1500, (though it can vary from this) that you agree to pay as the ‘first part’ of any future claim during your confirmation of the booking and signing of the contract at car collection.

Once in place, it means that you may find significant amounts of money being billed to your credit card after an accident.

The maths is typically pretty simple. If you have an excess of £750 and there is a £500 repair bill to the hire car following an accident, you will find the entire £500 billed to your credit card. Had the damage cost £1000 to repair, you would have been billed for £750 as the full excess and the rental company’s policy would have paid the remaining £250.

Protecting yourself against excess charges

The excess constitutes a considerable financial risk for renters and the hire companies recognise that fact.

They may offer the option of protecting yourself further by paying them additional sums for what they sometimes call ‘top-up insurance’ or perhaps ‘Super-CDW’. For an additional sum, this form of additional car hire excess insurance will typically reduce or even possibly remove the excess from the policy.

What the car rental company may be less inclined to tell you though, is that you may be able to achieve the same degree of protection (or possibly even more) and at a lower cost by purchasing your car hire excess insurance not from them but from an Internet based specialist provider of car rental insurance.

The Internet car hire excess insurance market

On the Internet there are companies that specialist in car rental insurance cover and typically their prices will be lower than those of the rental companies. They also sell something that they may call ‘excess insurance’ and if you are charged an excess by a rental company, then all you have to do is get this reimbursed to you through your own direct excess policy.

Another potential advantage of purchasing this insurance from a direct provider is that they may also offer it on an annual basis. If you have an annual policy then subject to a few restrictions around specialist vehicle types (e.g. sports cars) it would typically provide financial protection for any vehicle you rent during the life of the policy.

If you rent regularly or even more than once in a year, an annual policy may offer even more scope for saving both time and money.

The car hire excess insurance sold by the specialist providers may be worth investigating further if you’d like to improve your peace of mind when driving that hire car.