Insurance for car rental – what is car hire excess cover?

Excess cover is essentially an additional insurance policy which can protect you from the excess costs you would otherwise have to pay, should your rental car get damaged or stolen.

Car hire excess is the amount you have to pay towards repair costs if your rental car suffers any damage. The excess amount varies among different car hire providers. The insurance policy for rented cars operates on an excess reimbursement basis. Excess Reimbursement is designed to repay you the amount of any excess or repair costs you have to pay (up to the policy limit) under the terms of the rental agreement following damage to the rental vehicle.

Damage includes scratches on the car body, windows (including a chip), tyres and wheels, headlights, mirrors, the undercarriage and roof. The damage can be caused by fire, vandalism, accident and theft.

Each car rental company has its own policy and procedures on deposits for excess cover. A number of companies will either pre-authorise or debit a sum equal to the excess from your credit card, while others may merely take an imprint. Your rental agreement specifies the policies, waivers and other options appropriate to your needs. Note that there are often hidden charges such as airport fees, fuel and refuelling.

Collision damage waiver (CDW) limits your financial liability for damage to the rented vehicle. CDW is subject to a non-waivable excess fee. Car rental companies offer additional cover against the excess fee. Customers who buy separate insurance to cover the CDW excess fee from a third party should note that in such circumstances rental companies will require a security deposit. The security deposit is most often taken, at the point of car pick-up, via a refundable pre-authorised charge to your credit card. A security deposit does not apply if you purchase an excess waiver directly from a car rental company.

Motorists need to be aware that they need to pay extra for Personal Accident Insurance, Supplementary Liability Protection, Super Collision Damage Waiver, Super Loss Damage Waiver and Super Personal Accident Insurance. These additions significantly drive up the cost of car rental.