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What is car hire excess insurance and how to get the best policy

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Michael Brown

Acting Editor

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Guide contents

In many countries, car hire companies are required to take out an insurance policy to protect their vehicles. However, in the case of theft or damage, these companies usually require you to foot the bill for an excess amount.

That’s why, for a fee, you can pass this responsibility on to an insurer instead, and continue your travels stress-free. Below, we explain what car hire excess insurance is and how it works.

What is car hire excess insurance?

Instead of paying for this excess yourself, you could take out an insurance policy which covers your excess in the case that your hired car is damaged or stolen. Also known as excess waiver insurance to some readers, these policies can often be tailored to your desire, adding on cover for other areas such as windscreen or tyre damage.

To purchase car hire excess insurance travellers have two choices; either they can purchase their policy through an insurer or directly through a car hire company. 

What insurance do I need when hiring a car?

When choosing your car hire insurance excess plan, it is important to read your policy carefully to find out what it covers. Some of the cheaper policies carry more risk, and your insurer won’t pay your excess for certain damages.

Not only this, but the underlying basic insurance policy on your car rental agreement can be basic. This means you might be liable for the full cost of repairs for areas of the car that are not covered by the insurer.

This is why a comprehensive insurance policy may be best, and why the cheapest insurance policies do not necessarily offer the best value.

Can I get an annual car hire excess insurance policy?

Car hire excess insurance policies can be bought to cover a set period, or they can be bought on an annual basis.

This might suit those who travel frequently, for example if you travel abroad multiple times a year on business. So, instead of continually buying one-off policies, it could be cheaper to buy annual car hire excess insurance in this scenario.  

If buying annual car hire excess insurance is right for you, then it is worth looking at how many times your insurer will let you claim throughout the year. Some insurers put a limit on the amount of claims you can make in one year, which is a factor you will need to take into consideration when taking out your policy.

How can I get cheaper car hire excess cover?

When searching for the best car hire excess insurance there are several different ways to get cheaper cover.

Firstly, it is always best to purchase your insurance well in advance of your travel dates. Those who leave it to buy at the airport generally pay more for the same level of cover.

That said, purchasing an insurance policy through a third party insurer rather than the rental company is usually cheaper, so before you finalise your car rental agreement it is best to shop around for the best deal. 


What is a Collision Damage Waiver?

This is a basic level of cover included in most car rental agreements. Essentially, it limits how much you will be required to pay for a damaged or stolen rented vehicle. In some cases your car rental company will offer you a Super Collision Damage Waiver, which removes your responsibility to pay any form of excess.

Do car rental companies pay for scratches?

This depends on how much it will cost to fix the scratches. If the damage is less than the value of the excess, you might be liable to pay for the damages yourself. If it exceeds the value of your excess, you can use your insurance policy to claim for these damages.  

Is it normal for me to pay excess charges to the car rental company even though I am insured?

It is worth noting that in the event of a claim it is not uncommon for a third-party insurer to make you pay the excess fee. In these instances the third-party insurer will pay you the excess amount directly once your claim has been processed. 

Does car hire excess insurance cover multiple drivers?

Yes, but this depends on your policy. Always check the terms of your policy before committing to an insurer.

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice. will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by will always be from Be ScamSmart. will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by will always be from Be ScamSmart.