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Rental Car Excess Insurance
Rental Car Excess Insurance
Written by
Rachel Gregg
Edited by
Laura Crowden
Reviewed by
Adrian BennettEasily compare Travel Insurance
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What is rental car excess insurance?
Long story short
Rental car excess insurance can help you save if an accident happens while travelling
You can usually get it from your rental car company, but you can add it to many travel insurance policies too, to help cover excess costs.
Some travel insurers won’t cover all vehicle types
If you’re renting a scooter or campervan over 4.5 tonnes, check your policy details since not all two-wheeled or large vehicles like these will be covered.
There’s usually a maximum excess amount that you can be covered for
Rental car excess cover often ranges from $2,000 to $10,000, depending on your coverage level and insurer, so you can match it with your rental car agreement details.
What is rental car excess insurance?
Rental car excess insurance is the seatbelt for your finances when you’re cruising along new and unfamiliar roads in a new and unfamiliar vehicle on holiday. Car excess is something that most people would be familiar with due to their own car insurance policy, and it pretty much works the same for your rental car, too. So if a rental car is a must-have for your travel itinerary, then rental car excess insurance should be factored into your holiday budget too.
Most car rental companies will charge an excess fee if your rental car ends up getting damaged or stolen, which can quickly burn a huge hole in your travel fund. That’s where rental car excess insurance can come into play. It can help cover your rental car excess if you get into trouble so you don’t end up paying hundreds, if not thousands, of dollars, on damage that might not have even been your fault. It’s like double bagging your green curry from the local Thai place, less mess for you in case the ride gets a bit bumpy.
You can usually opt to pay the additional costs (per day) to reduce your excess, with your rental car company. But most travel insurance policies let you add it on too. You’ll often get flexible excess amount options as well, which could save you a bunch of time and a decent portion of your travel budget.
What is and isn’t covered by your insurance policy?
Like most insurance policies, there are things that you will and won’t be covered for. When it comes to rental car excess, these are some general things you might find are and aren’t included in your coverage.
The ability to increase your rental vehicle excess cover, giving you more coverage for larger vehicles like campervans
Cover for accidents, damage and stolen vehicles
Cover for returning a rental if you are medically unfit to be able to.
If the rental car was being driven by someone not listed on the insurance policy or rental contract.
If the rental car was being driven while under the influence of alcohol or drugs or breaking the law.
If you were driving the rental car without a suitable license.
If the vehicle doesn’t meet the guidelines by your insurer (i.e. a motorbike)
The ability to increase your rental vehicle excess cover, giving you more coverage for larger vehicles like campervans
Cover for accidents, damage and stolen vehicles
Cover for returning a rental if you are medically unfit to be able to.
If the rental car was being driven by someone not listed on the insurance policy or rental contract.
If the rental car was being driven while under the influence of alcohol or drugs or breaking the law.
If you were driving the rental car without a suitable license.
If the vehicle doesn’t meet the guidelines by your insurer (i.e. a motorbike)
Is it cheaper to reduce my excess by paying my rental car provider more?
Probably not. While it might be more convenient, it can often be the more expensive choice. So, make sure to weigh up all your options before locking in.
Getting excess coverage directly from your rental car company is called the rental excess waiver, or sold as part of a protection package. It’s works like the rental excess insurance in your travel insurance to reduce or wipe out the hefty excess you’d normally have to pay if your rental gets damaged or stolen. You can usually choose a rental car excess policy at levels that reduce your excess or put it to zero, so you won’t have anything to pay out of pocket, but it can cost more than an extra add-on to your travel insurance policy.
What are the alternatives to paying for rental car excess with your rental car provider?
You don’t have to sign up for the excess protection package when picking up the keys for your rental. Many travel and car insurers will often offer excess insurance options for renting a car while travelling, so you’re not cornered into one option.
Travel insurance
For some travel insurance policies, you’ll find that a rental excess coverage will be included as standard within your policy. But for others, this might only be available as an optional extra at an additional cost. How much is covered depends on the policy but generally ranges between $2,000 to $10,000, with some insurers allowing you to choose from different excess coverage amounts.
Car insurance
Some domestic car insurers also offer standalone rental excess cover to help lower the excess of your rental car. But there’s a catch, you’ll need to be a policyholder with them before being able to get this benefit. It will also most likely only work when hiring a rental car in Australia.
How much will I be out-of-pocket without rental car excess insurance?
Finding out which rental excess coverage will work for you is kind of like ordering a pizza; there are so many topping options to choose from. So, let’s break it down with an example from Kirsty’s recent trip.
Kirsty went off on a two-week road trip through Italy with her best friend to celebrate their 30th birthdays. She rented a car so they could cruise through Tuscany one week and drive down to Palermo the next. It sounded like a dream until she hit a literal bump in the road and ended up with a pizza-sized dent in her rental car. Let’s look at what she could be out of pocket depending on the cover she picked:
Scenario 1: No rental excess cover
She books her rental car for $850 (for two weeks). Which sounds great for her budget, until the dent happened. Now Kirsty could be looking at an excess of just under $4,000. Ouch. Now that’s nearly $5k, she’s had to spend on her rental car.
Scenario 2: Choosing the rental company’s protection package
Kirsty opts for the rental company’s top-tier protection plan for a zero-dollar excess on top of her rental costs for an added $50 a day. That brings the total rental cost to $1550 for two weeks. After the accident, she still has to pay an excess of $1,300, making her total rental car costs $2,850. Not ideal, but still better than forking out the full excess all by herself.
Scenario 3: Adds rental car excess cover to her travel insurance policy
Kirsty already had her travel insurance locked in but added rental vehicle excess cover to her travel insurance policy for an extra $65 total (not per day). That covers her for up to $8,000 in excess. So, with the original rental cost of $850 + $65 for the insurance add-on, her total is $915. And the best part is she doesn’t have to pay a cent more for the damage (as long as it’s under the $8,000 limit).
Moral of the story? Having rental excess in your travel insurance could be a much more budget-friendly option to keep your holiday on track (depending on your trip needs).
Note: This is a hypothetical scenario created to illustrate potential cover considerations. Indicative prices calculated on 12 May 2025 for a 30-year-old female. Your cover needs may be different.
What should I consider when choosing rental car excess cover?
Thinking of adding rental car excess cover to your travel insurance? Smart move. But before you sign on the dotted line, keep these things in mind:
Excess limit
Your travel insurance policy will have a capped rental excess limit. This will be the maximum amount your insurer will reimburse you if your rental car gets dinged, scraped, or stolen. Most policies will cover from $2,000 to $10,000, depending on your level of cover, with some insurers allowing you to choose from various options within that range.
Types of vehicles covered
Love the idea of zipping around Bali on a scooter or road-tripping in a camper? Make sure your policy agrees. Most will not cover rental excess for two-wheeled vehicles like motorbikes and scooters, or vehicles that exceed 4.5 tonnes (mainly for campervans and motorhomes). So, make sure to check if your rental vehicle type is included in your travel insurance policy details.
Driver information
To be covered by your travel insurance, most policies will need the same relevant drivers listed on both the rental agreement and travel policy. No name means no claim. So, if you’re listed on the travel policy but not listed on the rental insurance agreement, your wallet might not be seeing happier days. So, double-check that everyone is listed properly before you hit the road.
What type of driving will you be doing?
If you plan on taking your holiday off-road or know you’ll be driving down a heap of unsealed roads, you’ll need to check that your rental car company is okay with it. Some might need you to take out extra cover for this adventurous driving or might not cover it at all. If your rental car company does allow driving wherever your GPS might take you, then the rental excess from your travel insurance will still be in place.
Helpful tip
Do you have plans to drive around your holiday destination of choice? Before you hit the road, make sure that your travel insurance and rental car driver’s list all match up. While it sounds like an unimportant step, not checking all the details could end up costing you. And it makes sense. If you and your travelling companion want to take turns driving, then why wouldn’t you have the driver listed on both the travel policy and rental agreement?
One easy fix is to buy a family or couple travel insurance policy. That means that no matter who hits a bump in the road or backs into a bush, you’ll all be covered for the same things.
Adrian Bennett
General Manager for General Insurance
Frequently asked questions
What extras should I consider when choosing travel insurance with car hire excess?
If most of your trip depends on a car to get around, there could be a few other things to think about on top of rental car excess cover. It’s important to make sure your travel insurance policy also covers you for things like personal liability (to cover accidents to yourself or other people’s property). Especially if you’re driving in unfamiliar or high-risk areas.
It’s also worth checking out other extras available direct from the rental car company, as they may help cover any gaps your travel insurance policy can’t reach. Things like windscreen and tyre protection, kids car seats, or snow cover.
What is the difference between a car hire excess and a collision damage waiver?
When you hire a car in Australia, your rental car company will likely have some standard coverage included within the rental price. This is known as the collision damage waiver. This stops you from being liable for the entire cost if something goes wrong, since it’d be silly to lend out cars with no protection. But to be clear, even with collision damage waiver, you’d still have to pay an excess if your rental car was damaged. Car hire excess, on the other hand, is an optional extra that can reduce the excess amount you’d have to pay. Think of it like tapping up a broken finger with a few band-aids compared to a splint.
Do I need a different cover if I rent a two-wheeled vehicle?
That depends on your chosen insurer. Most travel insurers won’t cover two-wheeled vehicles like scooters, mopeds, and motorbikes. So, if you’re planning on zipping through the streets of Bali, check if your travel insurance policy offers motorbike coverage or optional add-ons to cover you.
What happens if I’m injured in a car accident with a rental car?
After making sure that everyone is okay, you should call up your car rental provider and tell them all the details. Once you’ve got the paperwork rolling, it’s time to let your insurance provider in. You’ll need to provide them with a few details like the rental vehicle agreement, a completed incident report, and a repair bill with all the damages listed. This list might change a little between insurers, but once they’ve got what they need, they’ll start to process your claim.
Find a wheely good insurance policy for your road trip
Whether you’re cruising along Italy’s Amalfi Coast or road-tripping New Zealand’s South Island, a rental car can help you explore more on your trip. But it can also mean more trouble if something goes wrong. Luckily, with the right travel insurance policy, you can cover all your bases and get coverage that ticks all your boxes (like rental vehicle excess cover). Start comparing online from a range of policies and providers to make sure your travel insurance ticks all your boxes.
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