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

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.

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. 

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.

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.

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.