When hiring a car abroad you can save money and provide peace of mind by being prepared and organising the rental and insurance before you go. This is because rental companies often use scare tactics to try and sell you overpriced insurance policies with low levels of coverage claiming that these prevent you from having to pay a high excess if you crash or damage the vehicle.
In this article, we explain how car hire excess insurance works, whether you need car hire excess insurance and how much it costs to take out a policy.
What is car hire excess insurance?
Car hire excess insurance - also known as excess waiver insurance or excess insurance - is an insurance policy that covers the cost of the excess amount charged by car hire and rental companies should you crash or damage your hire vehicle when driving abroad or if the vehicle is stolen. It's possible to purchase a single or annual car hire excess insurance policy which can cover you for one or multiple trips abroad and some even offer additional cover for hire vehicles in the UK.
Most hire vehicle companies offer standard vehicle hire insurance, depending on where you are travelling to, which should help to cover some of the cost of damaged or stolen vehicles. However, when hiring a vehicle you are asked to pay an excess contribution in the event that an accident does happen. Car hire excess insurance is a purchase to consider if you want to avoid having to pay thousands of pounds for the hire car insurance excess.
What does car hire excess insurance cover?
Below we list some of the things a typical car hire excess insurance policy is likely to cover. The list below is not representative of every car hire excess insurance policy and so it is therefore important that you read your policy documents carefully before purchasing.
You can usually expect the following cover with a standard car hire excess insurance:
Towing & breakdown cover (this may be an optional extra or not covered by some policies)
Car key replacement and lockouts of the vehicle (optional extra with some policies)
Some comprehensive policies may also include cover for:
Road rage incidents
Travel and hotel expenses
Damage to windows, tyres and wheels
Drop off charges
It is worth noting, however, that most car hire excess insurance policies won't offer cover for:
Interior damage to the vehicle
Damage as a result of wear and tear
Damage caused to third-party vehicles
Best car hire excess insurance policies
Below, we compare some of the best car hire excess insurance policies on the market. We include some of the cover levels you can expect with each insurer as well as the cost for an annual and single trip policy to Europe/Spain. The quotes are based on a 30-year-old individual and may therefore vary depending on the age of the main driver. For the purpose of the quotes, there are no additional drivers. The information in the table is based on an annual policy with each provider and therefore the cover levels may vary if you choose a single trip policy. As with all insurance policies, it is important to thoroughly research and read your policy documents carefully before purchasing a policy.
How much does car hire excess insurance cost?
|£10,000 (max £7,500 per incident)
|£2,000 (£500 per claim)
|£1,000 (£500 per claim)
|Rental car key cover
|£2,000 (£500 per claim)
|£2,000 (£500 per replacement and £200 for lockout)
|£500 lockout (Key replacement is an optional extra)
|Up to 7
|Up to 8
|Up to 7
|Up to 8
|Up to 9 (incl driver)
|Annual maximum trip length
|Single cost (7 days Spain)**
|Annual Cost (Europe)
*Individual restrictions may apply **Cover limits are based on annual policies and therefore may reduce for single trips. Check your cover carefully when getting a quote.
Do I need car hire excess insurance?
Car hire excess insurance is not a legal requirement, however, it may be a good idea if you don't want to fall foul of high excess fees when hiring a car abroad. You also cannot guarantee the actions of other drivers which could mean that the hire vehicle ends up damaged or stolen. Purchasing car hire excess insurance means you will be able to claim for any excess charges you could be subjected to if any of the aforementioned happens. It is important to note that you will still be liable to pay the car hire excess in the event of any incident but the purchase of the excess insurance policy means that you can reclaim the costs.
It's unlikely that your UK car insurance policy will cover you to drive a hire car abroad and you will therefore need to ensure you are suitably covered before you travel. Additionally, you may need to ensure that you have the correct documentation to drive abroad depending on the country that you are travelling to.
How to save money hiring a car abroad
Hiring a car abroad can be expensive and so below we have listed some of the ways in which you can save money:
- Shop around - One of the quickest and easiest ways to save money by hiring a car abroad is by shopping around. You can use comparison sites such as TravelSupermarket and Skyscanner to search multiple car hire sites at once to find the cheapest deals for your trip.
- Book in advance (and pay online for a cheaper rate) - Booking your hire car in advance can save you money. For example, when we compared hire cars booked at different times the cheapest hire car booked 1 week before travel was £96 compared to £46 when booked 2 months in advance. Additionally, when booking online you may save money compared to paying on the day at the rental desk.
- Buy car hire excess insurance before you travel - Purchasing car hire excess insurance will save money in the event of damage or theft of the car hire insurance and can also prevent the car hire company from trying to sell you overpriced excess waiver insurance policies. It's likely that you will need to pay a refundable excess amount on the day which will be refunded if no damage is noted. Car hire excess insurance will mean you can reclaim the costs in the event of damage or the vehicle being stolen.
- Use your credit card for Section 75 protection - Making a payment for the vehicle on your credit card can ensure you are protected under Section 75 as long as the minimum amount paid is £100. Additionally, using your credit card to pay the refundable deposit will mean that the amount can be held on your credit card and is less likely to affect any holiday spending. Ensure you have a high enough credit card limit before making the payment.
- Take photos of the car before driving - It is important to take pictures of the vehicle before driving away. Also, ensure that you make a note of any damage or scratches that are already on the vehicle and get them noted by the hire car company to ensure you are not liable for any damage that you did not cause.
- Check if you need the extras - A number of rental companies include optional extras to the policy such as a sat nav and child car seats which can work out expensive e.g. at £10 a day. You may be able to save money by taking your own car seat or using an app on your phone as a sat nav.