The origin of the ‘excess’

The ‘excess’ is a common insurance technique used by insurance companies to help keep the cost of the insurance (the premium) a little lower to you the client.

It means essentially that if you take the car rental company’s ‘basic’ insurance, you also agree to pay the ‘first-part’ of any subsequent claim to the limit specified by the excess.

That’s a bit of a mouthful and it’s perhaps more easily explained with an example.

The excess on your car hire insurance policy is set at say 750 pounds (and it is typically between 500 and 1500 pounds). You subsequently have an accident resulting in a claim for 2000 pounds. The rental company will debit your credit card for 750 pounds as ‘the excess and first part’ of the claim. They will then recover the remaining balance of 1250 pounds from their insurance company.

Had the claim totalled say 500 pounds, you would have had to pay it all even though you had insurance in place.

The excess is frequently controversial and is disliked by many car hire clients, particularly as you may have no control over who assesses any damage involved in an accident or who repairs it and at what cost.

Options to avoid the risks of excess
The car rental companies will reduce the excess or remove it entirely – for an extra cost. This they may refer to as ‘top-up’ insurance, ‘excess car hire insurance’ or in some cases perhaps ‘super CDW cover’.

You may though wish to consider another and usually far cheaper option to deal with the risks of excess, but to explain this we’ll need to think a little about car hire insurance.

The nature of car rental insurance
Your car rental company may have rented the car to you and included some components of insurance in the deal. If they didn’t, they will probably try to sell it to you separately. Whatever the situation in your case, their basic cover will usually include hefty excess.

You are though under no obligation to take the insurance they included in the deal or offered you for sale (with some exceptions such as some fly-drive holidays and perhaps some special offers). Even if it is already included, you can ask for a rental-only price and then purchase and use your own versions of car rental insurance.

On the Internet you will find a very active and competitive Insurance market including the specialist providers of various forms of car rental insurance. Their prices are almost invariably far cheaper than those of the rental companies and they may well carry no excess at all. If they have no excess then clearly you don’t need to purchase additional excess car hire insurance – because you have no such risk!

The specialist providers and excess insurance
For whatever reason, you may have decided to accept the rental company’s insurance but remain worried about their excess. The good news is that you don’t have to pay yet more money to them for excess insurance.

The specialist providers can also sell excess insurance that means they will reimburse you should you be charged excess by your rental company. Their excess car hire insurance typically will be much cheaper than that of the rental company and it can even be sold as an annual policy to cover you for any vehicles rented in the period (subject to some exclusions for very specialised vehicle types). It might be worth looking at in more detail.

The origin of the ‘excess’
The ‘excess’ is a common insurance technique used by insurance companies to help keep the cost of the insurance (the premium) a little lower to you the client.

It means essentially that if you take the car rental company’s ‘basic’ insurance, you also agree to pay the ‘first-part’ of any subsequent claim to the limit specified by the excess.

That’s a bit of a mouthful and it’s perhaps more easily explained with an example.

The excess on your car hire insurance policy is set at say 750 pounds (and it is typically between 500 and 1500 pounds). You subsequently have an accident resulting in a claim for 2000 pounds. The rental company will debit your credit card for 750 pounds as ‘the excess and first part’ of the claim. They will then recover the remaining balance of 1250 pounds from their insurance company.

Had the claim totalled say 500 pounds, you would have had to pay it all even though you had insurance in place.

The excess is frequently controversial and is disliked by many car hire clients, particularly as you may have no control over who assesses any damage involved in an accident or who repairs it and at what cost.

Options to avoid the risks of excess
The car rental companies will reduce the excess or remove it entirely – for an extra cost. This they may refer to as ‘top-up’ insurance, ‘excess car hire insurance’ or in some cases perhaps ‘super CDW cover’.

You may though wish to consider another and usually far cheaper option to deal with the risks of excess, but to explain this we’ll need to think a little about car hire insurance.

The nature of car rental insurance
Your car rental company may have rented the car to you and included some components of insurance in the deal. If they didn’t, they will probably try to sell it to you separately. Whatever the situation in your case, their basic cover will usually include hefty excess.

You are though under no obligation to take the insurance they included in the deal or offered you for sale (with some exceptions such as some fly-drive holidays and perhaps some special offers). Even if it is already included, you can ask for a rental-only price and then purchase and use your own versions of car rental insurance.

On the Internet you will find a very active and competitive Insurance market including the specialist providers of various forms of car rental insurance. Their prices are almost invariably far cheaper than those of the rental companies and they may well carry no excess at all. If they have no excess then clearly you don’t need to purchase additional excess car hire insurance – because you have no such risk!

The specialist providers and excess insurance
For whatever reason, you may have decided to accept the rental company’s insurance but remain worried about their excess. The good news is that you don’t have to pay yet more money to them for excess insurance.

The specialist providers can also sell excess insurance that means they will reimburse you should you be charged excess by your rental company. Their excess car hire insurance typically will be much cheaper than that of the rental company and it can even be sold as an annual policy to cover you for any vehicles rented in the period (subject to some exclusions for very specialised vehicle types). It might be worth looking at in more detail.

Get a quote for Excess Car Hire Insurance from Insurance 4 Car Hire.