2018 Ultimate Guide To Rental Car Insurance

The good, the bad, and the ugly

You’ve heard this one before.

It’s the birthday of someone special. In your spirit of kindness and generosity, you plan to put them behind the wheel of a nice car and embark on a road trip to somewhere magical. You didn’t purchase rental car insurance, and things didn’t go as planned.

It might have been an accidental dent on your door from a child jumping out of a nearby car, or perhaps they blamed you for damage that you missed during the inspection. After all, you were at your peak excitement for the adventure ahead. Was it really your fault?

You hand the keys back with a whopping $5,000 hit to your credit card and a sour taste in your mouth as you utter…

Bastards! We’ll never do that again!

The leading cause of frustration, anxiety and financial distress when renting cars is damage and rental insurance. Whilst airport waiting times, car swapsies, and unfair rental terms come in succeeding places on the frustration-o-meter (official Ride Hacks term), nothing ruins a well-planned trip more than an insurance claim.

Let me show you how to save some dollars and your sanity.

Note from the editor:

This article has been (by far) my most popular on Ride Hacks. It was originally published in 2016 and I’ve had dozens of emails from readers like you who have resolved what would have otherwise been nasty damage penalties. I’ve revised this article in 2018, reflecting changes in policies of rental providers, and adding Thrifty, Budget and Enterprise/Red Spot. I hope for Ride Hacks to continue leading the way in insurance transparency so that all enthusiasts can enjoy their dream driving experiences.

This article deals with rental car insurance for prestige cars. By prestige cars, I’m referring to European cars that have a higher daily hire rate, cost more to repair, and always come with a higher damage ‘excess’. This guide may also be useful if you’re looking for a budget rental, although I’d recommend the generic article by Choice as a good start. Or if you want to be brave, you can work your way through this one first.

Instead of rehashing the same concepts as any other source you can find online, my goal is to dig deep into the key considerations for excess and excess insurance on prestige rental cars, and provide you with the tools to confidently hire from any rental company.

Want to skip reading? You can buy a special insurance policy that covers the excess you might be required to pay to a rental provider. It’s called ‘Rental Excess Insurance’. Whilst it’s worth understanding how the system works, here is a shortcut to skip to that section.

Required Reading: How Rental Car Insurance Works in Australia

When you rent a car in Australia you are, by default, 100% liable for all damage to the car, and any damage to other cars or property.

The only liability that you don’t have to worry about is that from injuring another person. This is always covered by the compulsory CTP insurance required on all cars in Australia.

But don’t stop reading. You don’t have the full story.

Providing you are not breaking the terms of the rental agreement (some terms can be bent, others can’t), then your liability is limited to the amount of ‘excess’ noted on your rental agreement. Different rental companies call this excess different things. These inconsistencies lead to a lot of confusion, so let me make it easy for you:

Company What they call ‘Excess’
Hertz Accident Damage Excess
Europcar Damage Liability Fee
Avis Excess Amount
Budget Excess Amount
Thrifty Damage Recovery Fee
Enterprise Red Spot Loss or Damage Liability
DriveMyCar Damage Liability Charge

The common term for the reduction from 100% liability down to the Excess is Loss Damage Waiver.

Regardless of what they call excess, this is simply the reduction of your liability from the full amount of damage (the rental car and the car you ran into) down to the limit on the rental agreement providing you meet the terms of the agreement.

But did you know that all rental companies apply your excess on an event basis? That is, if you suffer multiple losses – perhaps theft AND the car runs into a shopping centre – then you will need to pay for the excess multiple times. This is clear as day in the policy of each rental company above (except one, keep reading to see the full table).

Whilst I’ve personally never heard of a claim where multiple excesses have been charged, the possible combinations of multiple damage/loss are endless. This worries me a lot. Enterprise / Red Spot are exhaustive when listing the conditions where you would pay more than their excess. They state:

8.3 Your liability for the charges specified in clause 8.2 shall not exceed the Loss or Damage Liability unless:
(o) More than one accident or incident occurs. Should more than one accident or incident occur Your liability for each subsequent incident (after the first) will be the Subsequent Loss or Damage Liability noted on your Rental Agreement Part A for each subsequent incident.

In this case, they actually have a clear “Subsequent Loss or Damage Liability” or “SLDL”. I haven’t rented with Enterprise / Red Spot in Australia so I can’t provide any feedback on the SLDL.

The excess is generally considered as the most you will have to pay if any damage occurs. This is a complete myth. Sometimes you will be up for much more. So, the big questions are:

  • If something happens, how much could I be up for?
  • In what circumstances could this happen?
  • How can I minimise the chance of anything happening?

This guide will address each of these questions and point out the differences between rental companies, insurance policies and simply good practices. Buckle up for the academy of hacking rental car insurance.

Quick links

All definitions are in a table at the bottom of this page. Just search (Ctrl + F or Cmd + F) in your browser to search through the definitions. I’ve also tried to mention the specific rental provider differences by name, so you can easily search for ‘Europcar’ or ‘Hertz’ to find specifics for their policies.


Declining Excess Reduction

Reducing Rental Excess

Going Commando

First thing’s first. In Australia (unlike North America), this isn’t no insurance. It simply means that you haven’t opted for any option to reduce your excess — your portion of any damage costs. This cap on your liability is the default for all drivers (providing you don’t break the agreement). Occasionally, you might have the customer service agent scaring you, pointing to horror stories, all in an attempt to sell you their excess reduction policy. It’s worth us considering what it means to simply say no thanks.

Here is what you would be liable for:

  • Damage to the vehicle before you pick it up, if you haven’t marked it on the damage report.
  • Damage to the vehicle during your rental, e.g. a scratch or dent
  • Additional charges if you are involved in an accident, e.g. vehicle recovery, third party damage, loss of use etc.
  • Single vehicle accident excess, on top of the regular excess (if the particular rental provider charges it).
  • Any exclusions (e.g. tyres, not locking the car), on top of the excess you pay for other damage.

Each of these above assume you haven’t done anything that would void the rental agreement (more on that below). If you do break the agreement, the entire damage cost (plus more) could be in your hands.

Sounds scary? Let’s work through it together.

Damage Missed During Inspection

Rental Car Insurance Nightmare

The Nightmare During The Dream

As I have written about in my other reviews, I’ve always gone to extreme lengths to meticulously mark the damage report before I pick up the car. Typically, they will make you sign the damage report in the office, agreeing there is no damage, before you see the car and can inspect it. This is wrong, but it’s purely for the ease of logistics. After you check the car, do you really want to line up again? At this point, it’s your responsibility to ensure that you didn’t just sign away next month’s salary.

Despite already signing the damage report, it’s not until you drive away that you will be liable. It’s time to walk around and check the entire car for damage.

Work top-down. This means you walk around the car five times, methodically inspecting from roof to rims. Don’t try look up and down whilst walking around a single time, you’ll miss stuff. It will bite you in the ass, and you’ll hate me for using less bold text in this article.

Here’s a checklist:

  • [ ] Roof. Pay attention to dents and scratches from trees or low parking spaces on the edges of the roof. This is a critical step as you have unlimited liability with any rental company for roof damage. If there is a scratch or dent, you’re paying for it.

  • [ ] Windows and glass. It’s likely that you will be in a dark area (fluorescent lights are the worst). Use the torch function on your phone to shine a bright light on each section of the car. Europcar and Thrifty explicitly exclude window and glass damage by default. Finding any damage now will save you real dollars. Guaranteed.

  • [ ] Primary panels — doors, wheel arches, bonnet, rear boot door. Also open all doors and check the edges to see if they have been slammed into another car. You will always find something here. Ensure it is marked. Ignore the front and rear bumpers at this stage. If you try to inspect too much in a single 360° inspection, you are much more likely to miss something. Do it slowly, walk around a few times.

  • [ ] Bumpers, including the center-bottom and lower-sides of the front body kit (think about gutter scrapes and parking bumps). Also check the rear bumper for remanence of some other car’s paintwork and parking damage.

  • [ ] Underbody, specifically under the doors for any damage caused by mounting gutters. If there is anything suspect of potential gutter-mounting, look further under to see if there is any hidden damage. Underbody damage also has unlimited liability for every rental company. Just like the roof, you will pay every cent of damage found here after your rental. If it looks dodgy, reject the car.

  • [ ] Rims for scratches and tyres for any side-wall damage or nails. It’s easy for this to be missed, particularly with dirty wheels, and it’s also to use photos as evidence. Tyres and wheels are typically excluded by default by most rental companies. Don’t skimp on this. You can read about my adventures with the Hertz Audi A4 with a screw in the tyre.

When they won’t mark the damage

Okay, this does happen. I’ve had countless arguments with lazy garage attendants who won’t mark damage, mostly because they can’t be bothered. There is only so much of a fuss you can kick up, so I suggest simply recording a video as you inspect the car. Hold it with one hand and talk as you point out anything you find.

If you’re really concerned, you can send the video back to the rental company straight away before you leave. There’s your evidence. I would only do this if they are being nasty about it. The email will likely go unanswered.

Company Customer Service
Hertz [email protected]
Europcar [email protected]
Avis [email protected]
Budget [email protected]
Thrifty [email protected]
Enterprise Red Spot [email protected]
DriveMyCar [email protected]

Damage Check Warning

Roof and underbody damage is never covered by your maximum excess. Put simply, you have unlimited liability if there is damage here. If not anything else, please thoroughly check these areas.

When it comes to glass, headlights, wheels and tyres, Europcar and Thrifty are now the only two rental providers who exclude these in your excess. For example, if you have damage on the front of the car, they’ll take the excess amount (let’s say it’s $5k) and you’ll also need to pay for any windscreen damage separately. Even if the accident is not your fault!

Avis only excludes tyre damage, but windscreen, glass, headlights and wheels are all included as normal damage. Hertz previously had this same policy but seem to have removed it from their T&C’s. However, I did find a 1 Sept 2017 version of Hertz’s Glass and Tyre Charge List. It’s not clear whether this is included or on top of your excess, but it does detail the pre-authorisation amount they will take if you damage your windscreen or a tyre.

Those Hertz Porsche Cayman tyres will be setting me back $500 a pop.

Other tips for pickup

  • If the car is dirty, demand ask nicely they wash it because you cannot see if there is damage. They’re unlikely to want to do this. In this case suggest they walk around touching the dirty paintwork to differentiate between dirt and damage. Or ask for another car. Whilst I don’t always do this, I typically do once I find some significant damage that they didn’t tell me about.
  • Take photos and video of any concerning areas. Video provides context. This will save your ass if you ever have an argument with the rental provider — you can count on them not having videos or photos before your rental. Particularly focus on those areas where you have no coverage.
  • Take a photo of the odometer before you drive away. If they tell you it has 23,456km and it actually has 23,460, then you have grounds to argue that damage may have occurred from when they checked the car in till when you picked it up. The more evidence on your side, the better.

Accidental Rental Damage

Car rental damage

Whoopsie!

You may be unfortunate and incur some damage during your rental. If it is minor, not involving another car or someone’s property, then take lots of photos so that you can protect yourself if they come back with an over-the-top repair fee. If your rental is for several days, you might want to drop into a vehicle repair shop for an estimation. A friend of mine had some damage that was missed during the initial inspection on a Europcar VW Golf. The letter from Europcar stated:

“If no other parties were involved and if the damage costs are $500 or less no further action is required. If the damage exceeds $500 we will debit your selected payment type for our loss up to a total amount not exceeding the Damage Liability Fee (DLF) shown in your Rental Agreement.”

Two months later he was charged with $545.17 on his credit card, that’s convenient… If there was ‘Third Party Loss’, such as another car involved, they would have taken the full excess from his credit card whilst the claim is being processed.

When it comes to how much you pay and when, here is how the rental companies differ:

Company First charge to your credit card
Hertz Estimate, refund difference if less
Europcar Estimate, refund or debit (up to limit) after assessment
Avis Full excess, until…(not clear)
Budget Full excess, until…(not clear)
Thrifty Estimate, refund or debit (up to limit) after assessment
Enterprise Red Spot Full excess, until after repair
DriveMyCar Full excess, until after repair

It seems with Hertz that their estimate will be on the high side. They only include a provision for refunding you if the repair is cheaper and don’t refer to charging you more. This means their incentive is to over-estimate for the damage.

Generally, the excess or estimate is taken from you immediately and you would only receive any refund when all claims are settled. If another party is involved, such as a car or building (but not a person), this might be a very long process.

I have to make a special mention to Europcar and Thrifty here. Both seem slightly more agreeable to not charge you if you have followed the correct accident procedure and you are not at fault. e.g. almost all rear-end accidents are not your fault. Avis and Budget are close, but aren’t clear about whether they will take your excess. The others all take the excess first and refund you later.

Although, one note with Europcar. They have this crazy clause in 4.6 of their terms:

In making a refund We may take into account all reasonable administrative, collection agency and legal costs incurred in connection with the recovery of the Damage cost or rejection or defence of a claim for Third Party Loss.

So if they fart-ass around in court for a while, I pay for it?

All companies will charge a ‘Claims administration fee’ for processing your claim. Europcar will charge $55 for a Single Vehicle Accident (no other car involved), and $220 when another car is involved. Hertz will charge $60.50, and Avis/Budget will charge an amount they find ‘reasonable’. I don’t particularly like the sound of reasonable.

There are also a bunch of other admin and recovery fees you will need to pay. Some are transparent about it — Hertz will charge $60.50 for an external damage assessment — although some others simply insist you trust them.

I really tried to put a table of ‘admin fees’ in here, but there are so many gaps and it looked quite silly. There’s just not enough transparency here.

You’ll soon realise why having an rental excess insurance makes sense to eliminate all of this worry.

Additional Charges

Each rental company differs in exactly what they will charge above and beyond the standard excess. For example with the Hertz Porsche Cayman, there are ‘Additional Terms’ you will be required to sign. The alarming condition is that if you do not return the vehicle to the place where you rented it, you will be charged a $2,000 admin recovery charge, the physical recovery cost, and loss of use. Let’s talk about what this means. If you were to cause damage to the car where it wasn’t available for rental, let’s say you severely damaged a wheel from running into a gutter, you will be charged for a ‘Loss of Use’ in addition to the damage cost.

Each company applies Loss of Use in a different way:

Company Loss of use calculation
Hertz 70% of the daily rate
Europcar Your daily rate on the agreement (not their standard rate)
Avis Not charged unless you breach the agreement
Budget Not charged unless you breach the agreement
Thrifty Charged, but no calculation method in their terms
Enterprise Red Spot Charged, but no calculation method in their terms
DriveMyCar Charged, but no calculation method in their terms

For ‘Loss of Use’, Avis/Budget wins outright as they only charge ‘Loss of Use’ if you have actually breached the agreement. However as with a lot of their terms, there could be a lot of wriggle-room for blowing out charges.

The other rental providers include this loss in the damage cost by default. Also note that the Loss of Use applies for when the car is waiting to be repaired, being repaired, being replaced, and waiting to be returned. For a Prestige car, this may be a long time. Read my insight into the Dirty Secrets of Accident Replacement Vehicles to understand this further.

Thrifty adds an additional fee for a Single Vehicle Accident (SVA). That is, when you have an accident (or otherwise cause damage) without another car involved, except for a parked car which is still considered SVA, you will be liable for an additional $2,200 on top of your Damage Recovery Fee (AED). This includes if you can’t identify the car that crashed into you.

Enterprise Red Spot seems to only define their Single Vehicle Accident when hired from a remote location, and you drive between sunset and sunrise. In this case, you have absolutely no insurance coverage. None.

Kudos to Hertz for recently dropping their SVA which was the terrible combination of both Thrifty and Enterprise’s SVA fee. I whinged about this in previous versions of this guide, and it’s since been removed.

Rental Agreement Exclusions

Car rental excess exclusions

Gotcha! Damage to your back pocket

Exclusions are the situations that are simply not covered by the rental company. Even if you purchased their most expensive rental excess reduction, you must still pay for each case of damage or loss. Exclusions vary by company, but here are the most common:

  • Any damage to the windscreen, glass, or tyres (Europcar and Thrifty).
  • All damage to the roof or underbody.
  • Using the wrong fuel type.
  • Driving on unsealed roads, or above the ‘snow line’ unless you have purchased snow cover.
  • Admitting fault, or making any offers, promises or guarantees at the scene of an accident. The exception is if you are required to do so by law (e.g. to a police officer)
  • Loss or damage to any accessories added to the vehicle (GPS, baby seats etc).
  • Leaving the scene of an accident without collecting the required information (generally defined as their crash report in your agreement).

The last one is really important. You should absolutely be fully aware of what to do in an accident. Europcar and Thrifty won’t even charge you the excess if it’s very clear that you were not at fault and you have followed the accident protocol. It varies by company, but the details of what to do are in your rental booklet.

What you do in this situation makes a huge difference — possibly between a $5k debit on your credit card for the next few months, or handing the keys back with no more than a few hours collating evidence.

Snow and unsealed roads

Although the definition of the ‘snow line’ varies, it generally means you can’t drive in the NSW or VIC snowy mountains during snow season (June to Oct) or in TAS where snow chains are required. If you do, you will have absolutely no insurance coverage, a.k.a unlimited liability for any damages.

The wording around snow coverage is a bit odd. The ‘snow line’ tends to vary a bit and the times of year do too. If you’re heading to a potentially snowy place, here is your guide to how it’s treated:

Company Can you drive to the snow?
Hertz No. Snow coverage discontinued in Australia
Europcar Yes, with $27.50 per day snow cover (rate TBC) from selected locations
Avis No, don’t drive above the snow line
Budget No, don’t drive above the snow line
Thrifty Can buy a snow pass for $22 per day (rate TBC) from selected locations
Enterprise Red Spot No, don’t drive above the snow line
DriveMyCar No, don’t drive above the snow line

For unsealed (gravel) roads, only Avis/Budget accept that a ‘metalled or gravel’ road is still acceptable under their normal terms. Oddly enough, their 3.1 clause states:

You and any Authorised Driver must only use the Vehicle on a road which is properly formed and constructed as a sealed, metalled or gravel road (unless the Vehicle is a 4 wheel drive vehicle).

Unless it is a 4WD vehicle? So, if it’s designed for off road use, you can’t use it on gravel roads? Hmmm.

Europcar lets you purchase unsealed road coverage on 4WD vehicles only for $16.50 per day. This will keep your liability limited to your excess (sorta) if you have an accident and the evidence photos clearly show your dusty car is sitting on Australian red earth.

Company Can you drive on unsealed roads?
Hertz No, prohibited use – no insurance applies. Just don’t do it
Europcar Yes, for $16.50 per day for 4WD vehicles
Avis Yes, although weird term for 4WD vehicles
Budget Yes, although weird term for 4WD vehicles
Thrifty Yes, for only 4WD vehicles, no extra fee
Enterprise Red Spot It’s not breaking the agreement, but you’ll pay an extra excess
DriveMyCar Unclear. You can’t drive ‘off road’, so public roads might be fine

You really want to stay away from Hertz here, and Enterprise Red Spot seem to have that tricky Single Vehicle Accident loophole. Thrifty, Avis and Budget look like the winners. Although this depends on your car choice. Thrifty are explicit in stating in 7.10:

Parts of Australia are not suitable for access by rental vehicles. To prevent Damage to the Vehicle and for Your own personal safety We strictly enforce conditions that restrict Your use of the Vehicle and unless We have given Our prior written consent, You must never take the Vehicle:

(a) on any unsealed road unless it is a four wheel drive (4WD) vehicle which has a transfer case with an independent Low range and Hi range gearing capability;

This would exclude their Mercedes SUV GLE250D but include their Mitsubishi Pajero 4WD. On the other hand, Avis has a range of Selection models including the Mercedes GLC250, and the BMW X1, X2 and X5. I’m going to vote on Avis if you’re considering heading on an Australian outback roadtrip and you want to drive a European car.

A word of warning

There is a clear exclusion of unsealed roads for almost every excess reduction policy in the next section. If you are heading onto unsealed roads, choose the right rental provider, car, and rental excess insurance.

Breach of Rental Agreement

Breach of rental agreement

Time to mortgage the house

This is probably the worst thing that could happen with a rental car. The agreements aren’t necessarily the easiest documents to read and no one reads them entirely before driving away. The rental agreement isn’t only the single page contract you sign, but it’s the 20+ page terms and conditions in the pretty little booklet they give you.

I strongly recommend reading the most up to date rental agreement from their website before your trip. You can use the concepts in this guide to search for key words in the agreement. When you collect your car, check the dates to ensure they haven’t updated the agreement.

If you want to be super prepared, print out the PDF copy, highlighting the areas that are likely to concern your trip. This usually depends on where you want to drive. Keep it in the car glove box for a quick reference if you find yourself in a spot of trouble.

Here are the Rental Agreements I found online:

Company Rental Agreement
Hertz Download PDF here
Europcar Download PDF here
Avis Download PDF here
Budget Download PDF here
Thrifty View online here
Enterprise Red Spot View online here
DriveMyCar Download PDF here

When it comes to breeching the agreement, each company calls it something different:

Company Breech of agreement is called…
Hertz Prohibited Use (previously ‘Full Responsibility Use’)
Europcar Severe Breach
Avis Not given a name but described in 8.5 of the agreement
Budget Not given a name but described in 8.5 of the agreement
Thrifty Serious Breach, but common exclusions are not breaches
Enterprise Red Spot Not given a name but described in 8.3 of the agreement
DriveMyCar Major Breach

Now there is a distinction between the group of rental providers who simply leave you with unlimited liability, and those which define the same incidents as breaches (Europcar, Thrifty, DriveMyCar). Why does this matter? Because a breach of agreement means that a rental excess insurance policy (next section) also won’t cover the costs incurred. You could be deemed entirely liable for all costs, with no protection.

This is possibly the worst case you could be in.

A common example is overhead or underbody damage. All rental providers agree that it is excluded from the excess amount and you must pay these repair costs above any other damages, which are limited to your excess. But if you’re with Europcar, they define a ‘Serious Breach’ as breaking a list of clauses, including 5.3 which covers common exclusions such as overhead and underbody damage.

With such damage on a Europcar rental, you could be left without any protection.

There are certain exclusions that every company deems a breach of agreement. For example, street racing, driving when intoxicated, unauthorised drivers, or driving in certain areas of Australia.

Hertz has an interesting gotchya. Any offence where you could immediately lose your license is a Prohibited Use, and therefore you have unlimited liability. In NSW, this is only 30km over the speed limit. Yes, Hertz has an Audi R8 and Porsche Cayman in their fleet. Such cars are more than capable of exceeding 140km/h, or 30km/h over the 110km/h max.

What if someone else is driving?

Only Hertz, Avis, and Budget allow your spouse, employer or co-workers to drive the vehicle without explicitly being named on the policy. This is a huge win for convenience and peace of mind if you need someone else to take the wheel.

The other rental providers claim this a breach of their agreement, putting you in a very sticky situation if there is an accident. When time is money, this flexibility really helps. Kudos to Hertz for recently becoming more flexible.

One caveat: if you purchase secondary excess cover from any of the providers listed in the next section, they will not cover anyone not listed on the rental agreement. Get your spouse’s name on there if they will be driving.

Choosing Your Supplementary Rental Car Cover

Which rental car insurance suits you best?

Saving your ass (just in case)

Whilst you could accept the offer by the rental company to reduce the standard excess, it’s simply never the cheapest or most effective option. Putting aside the fact that the rate isn’t competitive, the exclusions are ridiculous. For example, with Avis and Budget, damage to the tyres are not included in their Excess Reduction. Each of the rental providers have their own wriggle room on different matters. Paying top dollar and not covering your ass doesn’t seem logical.

Although I could write you a colourful article showing you how such excess reduction options are not comprehensive nor competitive, I’ll move onto the real choices you need to make for your next rental. You can confidently decline that rental excess reduction if you’ve chosen an option below.

  • Rental excess insurance
  • Certain credit cards
  • Travel insurance

Full disclosure: Some of the links below are affiliate links. Yep, they give me a small commission if you buy a policy at no extra cost to you. If you want to skip the commission, just Google for the company name.

The purpose of this guide is to be exhaustive, so leave a comment below if you know of another option and I’ll update the guide. Thanks for your support!

Rental Excess Insurance Options

A better mousetrap

In recent years, insurance policies have come into the market to specifically covering rental vehicle excess. This is fantastic. Each provider has their own unique stance on what they will cover. This guide is aimed to be exhaustive and point out obvious advantages of one provider over another.

No small print needed. You know I can’t recommend you insurance for your personal situation. Instead, I’ll show the gaps in coverage and obvious advantages of one product over another. You can choose the right one for yourself.

Tripcover / Hiccup Car Hire Excess Rental Car Protection RentalCover.com Worldwide Insure
Cover Limit $4k, $6k, or $8k $4k up to $8k $10k $100k (AU Residents) £50k (Deluxe)
Cover Basis Limited (see below) Limited (see below) Up to policy limit Up to policy limit/sublimits
Age 21 to 24 & 25 – 74 19 to 99 🙂 Under 25 and 25-74 21 to 75 21 to 84
Who for Anyone renting in AU Anyone renting in AU Anyone renting in AU* AU residents only Anyone
Excess $0 or $300 $0 $0 to $500 (you choose) $0 $0
Where Aus policy OR International One worldwide policy Region or worldwide Worldwide, including AU Worldwide, including AU
Underwriter Allianz Lloyds Zurich Assetinsure (in AU) GBG Insurance Limited
Multi-rental No, single rental No, single rental Yes, for annual policy No, single rental Yes, for annual policy
Cover Basis Cover limit, excess, days Cover limit, days Single/multi, many options Days Days or Annual policy
Personal effects $500 per person No cover $600 per person (max $2.4k) No Cover £300 per person
Rental Providers Only ‘Licenced’ Only ‘Licenced’ Only ‘Licenced’ or Car Clubs All, including carshare All + car clubs, not carshare
Unsealed roads No cover No cover If upgrade selected Only if 4X4 cover purchased No cover
Admin fees Limited Limited Considered same as ‘excess’ Up to policy limit Up to £50
Car value limit Not stated Not stated $150k Not stated < £50k retail

Allianz — TripCover.com.au and Hiccup.com.au

Allianz has created a policy called Rental Vehicle Excess Reduction and Luggage Insurance. This product is marketed and sold by TripCover, Hiccup and Allianz themselves, however they all refer to the same policy document.

For disclosure, here are the same PDS docs on their respective websites:
– Tripcover – https://tripcover.com.au/Allianz_Tripcover_Policy.pdf
– Hiccup – https://app.hiccup.com.au/pds/AU/AGA/RVE

For this section, I’m going to use my pick of the three, TripCover.

These policies will pay up to $8,000 towards your rental vehicle excess reduction on their ‘Plan B’ or ‘Plan D’ for drivers over 25 years old, and up to $4,000 for ‘Plan A’ or ‘Plan C’ for drivers over 21 years old. All plans are for a single journey, meaning that you need to purchase this policy each time you rent a vehicle. This policy includes coverage for all of the items typically excluded within the primary rental agreement — glass, tyres, roof and underbody.

Despite being cheaper and comprehensive, by comparison to the rental provider’s excess reduction option, it still isn’t necessarily the cheapest option. But focusing on cheap may not be your ideal option either. The following are quoted from Tripcover:

  • 1-3 days with $4,000 excess coverage costs $13.60 per day, or $9.30 per day if you accept paying a $300 excess in the event of a claim.
  • 1-3 days with $6,000 excess coverage costs $29.70 per day, or $22.19 per day if you accept paying a $300 excess in the event of a claim.

Assuming you are over 25 years old.

For anyone renting a car who doesn’t want to think about it, I generally suggest to grab a TripCover policy and get back to driving. It’s not 100% perfect, but it will make most painful events 95% less painful, in most cases.

Trip Cover

Based on the upper limit of $8,000, this really isn’t really going to cut it if you regularly hire prestige cars. An extra $100 for a four-day weekend isn’t really good value for money. But it is peace of mind.

If you don’t rent cars very often and want to protect from anything going wrong, this is definitely the way to go. My personal preference is to pay the lower premium amount and cop the $300 if anything happens.

You can get a policy quote from Trip Cover here.

Hiccup also provide this same policy, but I found their prices to be slightly higher when I was poking around. At the end of the day, it’s the same policy.

The rental aggregators DriveNow and VroomVroomVroom both use the same Allianz policy when they upsell you the insurance at the end of your booking.

What I don’t like

In 1.1.1 (a) of the PDS, the document states:

If, during your period of cover, a rental vehicle you have rented from a rental company or agency is involved in a motor vehicle accident while you are driving it; or damaged or stolen while in your custody, then we will pay the lesser of:

• the specified excess, deductible or damage liability fee you are liable to pay under your rental vehicle agreement; or

• property damage for which you are liable.

My concern here is comes from the detail of the Rental Agreement. We saw several cases in the sections above where you might have to pay more than the excess amount stated on your rental agreement. If this policy is only covering the $5000 in the agreement, but the rental company charges me an extra $2000, this would seem to not be covered, even if I purchased $8,000 of rental excess insurance.

I haven’t heard of any cases where this has been challenged, but it makes me cautious.

CarHireExcess.com.au

Car Hire Excess is a new player to the market, backed by the UK Insurer Lloyds. Their policy is very similar to the Allianz policy, although it’s a bit easier to read. There are a few differences, such as the ability to pay for $4k, $5k, $6k, $7k, or $8k of coverage, instead of simply the $4k, $6k, and $8k options from Allianz. They also don’t have a $300 excess option, it’s only nil excess. And a unique point of difference is that Car Hire Excess has a single policy that also includes Australian residents hiring cars overseas. As the policy is for a single-use, I wouldn’t put too much emphasis on this because you will need to compare it to alternatives for the country you are visiting.

They also have a much more aggressive discount for each additional day you have the policy. I looked at quotes up to three months and the effective daily rate continues to drop for each day added.

Here is what I was quoted on their website (chosen for comparison to the Allianz quotes above):
– 1 day $4,000 excess = $18.71 per day
– 1 day $6,000 excess = $40.84 per day
– 1 day $8,000 excess = $47.57 per day

However, when we look at 3 days, we get:
– 1 day $4,000 excess = $12.26 per day
– 1 day $6,000 excess = $20.82 per day
– 1 day $8,000 excess = $24.26 per day

What I don’t like

Same as above for the Allianz policy. The policy states:

If during your journey, a rental vehicle you have rented from a rental company or agency is damaged or stolen while in your custody, we will pay the lesser of:

a) The amount of excess you had to pay under the terms of the rental agreement; or

b) Reimbursement for costs that you are charged under the terms of the rental vehicle agreement, for loss or damage to windscreens and auto glass, roof, tyres and underbody of the rental vehicle; or

c) The cost of repairing the rental vehicle. You must provide a copy of the repair account and/or quote.

The ‘lesser amount’ is what worries me here.

Overall, Car Hire Excess has made the simplest product for anyone to understand. I admire their product positioning of ‘Simple’ in this market of complexity.

Read their PDS here.

Get a quote here.

RentalCarProtection.com.au

Rental Car Protection is the newest player in the rental market. I learnt about their UK operations and they only launched their site in Feb 2018 a few days before refreshing this article. My first impressions are that they have the most customisable policy compared to their competition. Whilst the underwriter is Zurich, the creator of the policy is Covermore, a common travel insurance provider.

Generally, their policy is incredibly precise in its language. I like this. Less ambiguity is best for everyone. In particular, unlike the Allianz policies which seem to only pay up to your excess amount disclosed on the rental agreement (not always the amount you are liable for), their concept of Excess is simple:

The monetary amount for which You are liable for loss or damage to the Rental Vehicle under the Vehicle Rental Agreement.

The other classification I like within this policy is the wording for incidents where you are required to pay your excess to the rental provider. Here it is verbatim:

We will pay up to $10,000 for any single incident or for a series of incidents during any single Vehicle Rental Agreement for the reimbursement of the Excess applied by the Rental Company or Car Club Company caused by accidental damage to the Rental Vehicle including any caused by fire, the or vandalism, as well as for any repair costs that the Rental Company or Car Club Company charges You or for payments that You are responsible for under the terms of Your Vehicle Rental Agreement following accidental damage to windscreens, tyres, roof and under-carriage.

Note the wording about ‘series of incidents’. This is particularly useful for those rental providers who will charge you excess per incident, which could mean multiple charges to your credit card. This is another case of a fairly well though-out policy. Although there are some aspects I’m not so sure about.

Firstly, they include a definition of ‘Car Club Company’ in their policy that seems to include services like GoGet, and might include services like DriveMyCar. My best guess is that they are included, although their definition includes the notion of a ‘paid membership’:

A company or agency which is fully licensed with the regulatory authority of the country, state or local authority in which the company or agency provides the registered paying members use of all Rental Vehicles within the Car Club Company fleet. A car club provides its members with quick and easy access to a car or a van for short term hire. Members can make use of car club and van club vehicles, as and when they need them.
I also detest this notion of ‘full licensed’. Legislation is so incredibly slow in peer-to-peer such that licenses don’t exist. I can just picture myself submitting a claim and the insurance agent saying something along the lines of: In order to process your claim, we require a copy of the license from the rental company or car club company.

Another interesting difference with this policy is that Loss of Use is only an option if you select it. Every rental provider has the option to charge you Loss of Use in the result of an accident. This policy pairs well with Avis and Budget who only charge you loss of use if you breach the agreement, in which case your extra excess insurance would be void anyway.

In terms of additional cost for Loss of Use, it is a flat $16.66 for a single trip (limited by 31 days anyway) or $29.75 for a multi-trip annual policy. I can’t see the value here if you are renting high-end prestige cars because they only cover a max of $250 per policy.

Including unsealed roads as an option is a huge win for any of the rental providers who allow for unsealed roads in their policy. I would opt for Avis, Budget, or Thrifty in these cases. Paying extra to Europcar for unsealed roads, and paying again for the option on the excess insurance seems wasteful.

Standard policy

  • 1 day – $19.28 for the one day with no excess or $15.78 per day with $300 excess
  • 3 days – $12.85 per day ($38.56 total) or $10.52 per day with $300 excess
  • 7 days – $11.02 per day ($77.11 total) or $9.02 per day with $300 excess
  • Whole year Australia coverage – $152.40 annually, or $122.35 with $300 excess

With unsealed road cover

  • 1 day – $24.14 for the one day with no excess or $19.59 per day with $300 excess
  • 3 days – $16.09 per day ($48.27 total) or $13.06 per day with $300 excess
  • 7 days – $13.79 per day ($96.56 total) or $11.19 per day with $300 excess
  • Whole year Australia Coverage – $187.89 annually, or $157.29 with $300 excess

‘Excess’ here is the amount you have to pay to Rental Car Protection per claim. They cover up to $10k worth of the rental provider’s excess. I know a bit confusing!

Be carful when comparing the annual policies above with others below. The prices above are only for Australians renting in Australia. Worldwide policies are more expensive.

Read their full product disclosure statement here.

Generate your own quote here.

RentalCover.com

This policy has changed since I first wrote this guide. It’s transformed from a bad option into one of the best options for certain circumstances. They previously offered an amazing annual policy, but only daily rates per rental are currently offered as of publishing this post. Let’s take a closer look.

First thing’s first. Depending on your country of residency (defined as at least six months residence), you will have a different policy offered to you. We’ll only discuss the relevant facts for Australian residents in this article. The policy is backed in Australia by Assetinsure, which was acquired by CBL Corporation Ltd, an ASX/NZX dual-listed public company. RentalCover.com has been around since 2014 and has offices in Sydney and London.

Okay, now for the fun stuff.

What I love

  • $100,000 of cover, regardless of the claim the rental provider is making.
  • No excess when you make a claim
  • Worldwide coverage
  • The only policy that explicitly covers car share companies such as DriveMyCar
  • The only policy that covers unsealed road cover if you buy the slightly more expensive 4WD policy

Now this is simply awesome: a policy that clearly states:

Rental Car company means a commercial operation including online “share” or “peer to peer” websites, loan cars from a licensed mechanic or accident replacement vehicles in business to rent out vehicles that is fully licensed, where applicable, by the regulatory authority of that country, state or local authority.

One of the annoying things about the other policies is that they say the Rental Company must be a ‘Licenced’ rental provider. I’ve been looking for a long time and can’t find any license that makes you a rental car provider. Whilst it seems obvious in the case of Hertz, Avis, Europcar etc. I can see a scenario where the insurance company is up for a big pay out and they decide that DriveMyCar doesn’t have a license and therefore they won’t pay out. This always worries me.

The other awesome thing here is the unsealed road coverage. Although this must be purchased as part of the (slightly more expensive) policy. You can only use this policy with a rental provider who allows you to drive on unsealed roads. Read the sections above for details about which rental providers allow you to do this.

Quotes are on a per-day basis below include a 15% discount that was automatically applied when I requested a quote (should happen for you too).

Car only, not including 4WD

  • 1 day – $23.50 for the one day
  • 3 days – $13.96 per day ($41.89 total)
  • 7 days – $13.24 per day ($92.68 total)

Cars and 4WD vehicles

  • 1 day – $36.41 for the one day
  • 3 days – $21.64 per day ($64.92 total)
  • 7 days – $20.52 per day ($143.65 total)

They previously offered car + 4WD for a whole year for only $172. This was unbelievably good value. Whilst this was the best local policy available for people who rent nice cars a lot, we currently only have daily rates offered.

This is an absolute no brainer for anyone renting cars From DriveMyCar like the Mercedes-Benz CLA45 AMG, or the BMW Z4 Convertible I previously rented

Read the PDS (for Australians) here.

Get your own policy quote here.

Worldwide Insure

Worldwide was just about to make it into the original version of this guide until they pulled coverage for all non EU residents. Luckily, they have since reverted this change and continue to serve Australians looking for rental cover home and abroad. Whilst you’ll see the terms are not quite as compelling as RentalCover.com, it’s a solid product at a fair price.

To enable coverage in your home country, you’ll need to go with the Deluxe package, which comes in at £79.50 for a year, or around AUD$145 after any exchange fees are considered. You could also consider a 1 to 3 day package for a flat £15, or around AUD$28. Seven days will set you back £35 or AUD$65.

Annual cover restricts any one rental to be over 60 days, so you need to be careful if you’re doing a round the world trip. However, this does come out to be a better deal than most travel insurance policies who limit their coverage of rentals to 30 days.

Whilst their website looks very 2003, they are backed by GBG Insurance who are listed on the London Stock Exchange and self-declared as the largest independent, fully integrated provider of international benefits in the world.

Two years ago, when this policy first came on my radar, it seemed to be the best value for money in the market. RentalCover.com was basically a restrictive domestic travel insurance policy and the few local Australian providers only had per-rental policies. A lot has changed since then.

I still think that Worldwide Insure has a place, but here are a few things I’m not so keen on:
– Cars must have a retail value less than £50k or just under AU$90k (I’ve listed values in the next section)
– Admin fees are limited to £50 (yes, really)
– No coverage for unsealed roads (a must if you’re going to fork out for an annual policy)
– They explicitly don’t cover car share companies such as DriveMyCar

You can read their PDS here.

Generate your own quote here.


Complimentary Credit Card Insurance

Many premium credit cards come with complimentary insurance. However, like all insurance policies, you need to read the PDS to understand the inclusions and exclusions. The consistent requirement is that you pay for the car rental using your credit card. Seems obvious. Each of the cards listed below cover domestic rentals. The list of cards that cover international car rentals is much larger and typically combined with international travel insurance. You can always find the PDS for your credit card and search the word ‘rental’ to see what is offered.

A word of warning. If you tell the rental provider customer service agent ‘oh it’s ok, my credit card provides insurance‘, they will promptly tell you how it probably doesn’t cover the rental. This is half-true — most cards exclude domestic rentals — but also a scare tactic. I’ll give them the benefit of the doubt.

If you plan to use your credit card, be sure you understand if it provides the coverage you require.

American Express

I love Amex. My experiences as a long-time customer have been very positive. They previously only offered coverage on their top-end Platinum Charge card (personal and business). This has since been expanded to a more affordable card in the American Express Explorer credit card. One specific note for Amex is that the cards mentioned below are only for Australian cards issued by American Express. I recently discovered that many international equivalents of the same card don’t have the same level of insurance coverage. Once again, read the PDS.

American Express Platinum Charge

American Express Damage Waiver Insurance

The American Express Platinum Charge card is my go-to card. Sure, it comes with the whopping $1200 annual fee (the Platinum Charge Business card is $1500), however the benefits add up if you plan on using the card a lot. To get a good sense of what the card offers, check out this article from Point Hacks.

One of the best benefits of the Amex Platinum Charge card is their outstanding insurance coverage. Specifically for rental cars, you have $125,000 worth of coverage under their ‘Loss Damage Waiver Cover’. This isn’t just covering your Excess, but also includes all costs you are liable for in the case of any loss being incurred during your rental.

Why is this so important? As you read above (but I don’t blame you if you skimmed it), the rental companies have complex terms with lots of ‘gotchas’. What if you couldn’t get a new door for a Mercedes Benz E200 for 30 days? Europcar will charge you for a loss in revenue of more than $3000. If you’re covered by your Amex Platinum Charge card, Amex (or their insurer – Chubb) will pay this for you.

The coverage also applies to rentals in North America where you have full liability for the car. That’s $125k of protection to consider.

It’s not all rainbows and unicorns. Conditions do apply. For example, the Amex insurance doesn’t apply if you breach the rental agreement. This goes back to ensuring you avoid anything that could be deemed a ‘Breach’. Damage sucks, but don’t let it be something that also isn’t covered under your backup insurance policy. To this effect, certain rental providers may be better matched for Amex Platinum Charge cardholders when the ‘un excessed-ed’ items are not considered a breach of agreement. Here is the specific Amex term:

We will pay any amounts You are responsible for under the Rental Agreement, including the Deductible, if loss is incurred during a Covered Rental Trip, as a result of accidental damage, fire, vandalism, theft or loss of use of the Rental Vehicle. This will apply whether You are responsible or not for the accident.

There’s also one other condition that was the deal-breaker from this card from being my single catch-all rental insurance policy when I lived in Australia. It doesn’t cover rentals that are picked up and/or dropped off within 150km from my home. For someone like me who doesn’t own a car and hires cars whenever I want from my home city, it’s not going to work out. By contrast, any travel where I hop onto a plane and jump off into a car, it’s gold.

One final condition is that the car must have a replacement retail cost of under $125,000. Almost every car you can hire in Australia from the mainstream rental companies will fall under the limit. The notable exceptions are the Hertz Porsche Cayman and Boxster, coming in around the $130k mark, and the Audi R8 which is an easy $300k+ supercar.

Other things I love about the Amex Platinum Charge insurance are:

  • Worldwide coverage, as long as you’re 150km from your home.
  • No excess component — they pay your full amount to the rental company.
  • Covers primary and supplementary card members (which means it covers three extra cardholders on a personal account and 99 extra cardholders on a business account).

Some things to be aware of:
– Trip must commence and end in your ‘Country of Residence’. Keep this in mind if you keep the card but move away from Australia.
– No cover for unsealed roads.
– The Rental Company must be ‘fully licensed’ (you’ll see throughout this guide that I hate this vague term).
– Two claims per year.

Read the American Platinum Charge personal card PDS here

Read the American Platinum Charge business card PDS here

Case Study: Sean’s trip to the Italian Alps

Sean, a Ride Hacks reader, was taking a long-deserved break Skiing in Courmayeur. As public transport isn’t on-point up in the mountains, he grabbed a car at the Milan airport. His intention was to simply drive to Courmayeur and leave the car locked up for five days while he enjoyed the powder, and then drop it off in Florence to end the trip. The car was cheap (about $130!) although in the final moments before dropping the car back in Florence, Sean clipped the wheel on the gutter. The car rental company inspected the car in great detail and found the scratch. They quoted €200 to fix it. Sean paid.

After reading this article three months after the incident, he realised he had insurance and submitted the claim form to Ace Insurance who operate the insurance programme for American Express. Two business days later they responded with an email asking for some clarifications (how it happened, requesting the itinerary to ensure he started and ended the trip in Australia, and why he was late to lodge). Sean responded and four business days later he received an email with the subject ‘Settlement Letter’. An SMS arrived the next day saying that the payment was processed and the payment hit his bank account three days later. That was a total of two weeks (Friday 20th May till Friday 3rd June) for a complete settlement. Well done Amex!

Click here to check out the American Express Platinum Charge Personal Card.

American Express Explorer Credit Card

American Express Explorer Damage Waiver Insurance

Unlike the Platinum Charge card, the business version of the Amex Explorer Credit Card does not include the same Loss Damage Waiver Cover. For the personal version of the card, the policy is very similar but not the same as the Platinum Charge card. Notably, it does cover both the primary and all secondary card holders. Here are some differences:

  • The maximum coverage and value of the rental car must be below $100k, compared to $125k on the Platinum Charge card
  • Doesn’t include convertibles.
  • The rental doesn’t need to explicitly start/end in your Country of Residence.

For the first point, here is what you would miss out on:
– Hertz Audi SQ5 ~ $110k
– Europcar Mercedes-Benz C300 ~ $110k
– Europcar Mercedes-Benz E200 ~ $101k (ugh!)
– Europcar Mercedes-Benz GLE350D ~ $122k

Just scraping under:
– Europcar BMW 240i Convertible

Not including convertibles sucks. Here is what it says in Section L of the policy:

Rental Vehicle means any sedan, station wagon, hatchback or SUV rented under a Rental Agreement on a daily or weekly basis from a Rental Company within the Geographical Scope and which is also collected from the Rental Company within the Geographical Scope of this cover.

However, the good news is the last point. The Platinum Card explicitly says that a Covered Trip must start/end from your Country of Residence. For people like me, who live in another country but still hold an Australian Amex, this makes the Platinum Card’s cover pointless. The good news is that the Explorer Credit Card could fill this gap. Truth be told, the cars I would be missing out on are not worth applying for the Explorer.

Read the American Express Personal Explorer credit card PDS here

Read a full guide on the Amex Explorer card over on Point Hacks here.

ANZ Premium Cards

ANZ Rental Insurance

At first glance, the ANZ policy seems like it could be useful. It covers $5,000 of vehicle insurance excess and $750 of vehicle return charges. Although after I read the policy, it looks like is has more holes than the rental provider’s own excess reduction. And that’s bad! Here they are:

The vehicle must have comprehensive motor vehicle insurance for the period of hire.

For this section to apply, the rental vehicle must have comprehensive motor vehicle insurance for the period of hire.

This stupid exclusion:

What is not covered? Any cover for your liability resulting out of your use of a mechanically propelled vehicle (e.g. motor vehicle or motor cycle)

Not covering any rental company without a license:

We will not pay: any claim where the car rental company does not have a current licence under any applicable legislation to hire out vehicles.

It would seem they don’t pay anything if your liability is more than the excess on the policy:

We will not pay: for the collision excess, where the full amount payable by you under the vehicle rental agreement for damage to the vehicle is more than the collision excess.

Firstly, there is no proof in any rental agreement that the vehicle is comprehensively insured. In fact, it doesn’t matter whether the rental company self-insures or uses a comprehensive policy. Each rental agreement only deals with your maximum liability via the Loss Damage Waiver. You pay this whether you are at fault or not.

I’m not even going to continue with the other points. If you happen to have an accident and you paid with one of these ANZ Premium cards, it might get you out of trouble. Just don’t count on it in your planning. There is also a $350 excess on this policy. No thanks.

You can read the PDS here.

Westpac Group Premium Cards

Westpac-Altitude-Platinum-American-Express

The following banks all use the same Allianz complimentary credit card insurance policy:

  • St George
  • Westpac
  • Bank of South Australia
  • Bank of Melbourne

Although they offer a generous $5,500 coverage, the clause that worries me the most is:

the hiring agreement must incorporate the rental vehicle insurance

This is a similar clause to the ANZ policy. What does this really mean? For Hertz and Europcar, searching for the word ‘Insurance’ in the rental agreements finds nothing telling you whether or not the car is insured.

Avis is the only company that explicitly uses the term ‘Avis Insurance Policy’ referring to a third party damage policy for any Authorised Driver. However, this isn’t the comprehensive policy that the card insurance is asking for you to prove. Overall, I’m sure that you could use any of these cards as a backup if it’s already your main credit card. However, I wouldn’t be seeking any of them out exclusively for their rental excess coverage.

You can read the PDS here.

Commonwealth Bank Gold, Platinum and Diamond Cards

I’m including this as many people hole CBA cards from a long-standing relationship with the bank. Although I’m going to say very little about this policy. Why? It sucks. Here are the key reasons why:

  • You need to actually activate the policy before you travel to make it active.
  • The max excess cover is $2,250.
  • You must have purchased motor vehicle insurance or damage waiver from the rental company. (So why would you need second insurance if you spent $50 per day on the offered insurance?).
  • Doesn’t cover Tyres, Windscreens or any of the things that the rental company doesn’t cover.
  • They don’t pay for any admin charges or fees the rental company charges.

How is this useful CBA? It’s not, move on.

Domestic Travel Insurance Policies

Domestic travel insurance policies are an alternative way of covering your rental vehicle excess. There are many providers of such policies including Fast Cover, 1Cover, Good2Go, Coles, Woolworths, Virgin Money, Commonwealth Bank, and Qantas. Who to choose? For the purpose of comparison, I’m only going to mention two. You’ll realise that they aren’t quite as good as the dedicated rental excess policies listed in the first section.

I chose these two, in order to demonstrate some of the shortfalls. In my research for rewriting this guide, I found 5 other policies to be similarly as vague and inadequate to calm your nerves. If you want to compare your own choice, look at the key terms I’m analysing below and search them in your PDS.

RACV

RACV was originally included as a dedicated rental car excess option. However, it appears to simply be a domestic travel insurance policy. You have three domestic options, two which might be useful to us:
– Domestic
– Domestic Cancellation (ignore this one)
– Rental Car Excess only

Either way, it’s the same policy wording. The Domestic policy has a $5,000 excess limit where the Excess Only policy has a variable $1,000 to $8,000 coverage, depending on your preference.

The policy wording is very brief and disappointing. My comments in italics.

What is a rental vehicle?

Rental Vehicle means a car (sedan, station-wagon, coupe and hatchback), SUV, four wheel drive, mini bus or a campervan/motorhome rented or hired by You from a recognised motor vehicle rental company for the carriage of passengers and does not include any vehicle designed to be used for the carriage of commercial goods.

No convertibles 🙁 and I’m not sure who gets to decide who is a ‘recognised motor vehicle rental company’.

What they will cover:

The Rental Vehicle insurance excess or the cost of repairs which would have been covered under the excess, whichever is the lesser, if You rent a vehicle from a recognised rental company and it is involved in an accident or stolen whilst in Your control and You are legally liable to pay.

Legally Liableto pay would seem to include all costs issued by the rental provider. This is good.

But excludes:

Any costs You become liable for if the Rental Vehicle agreement does not include comprehensive insurance with an applicable excess.

Ahh, now we have a problem. As outlined in the previous section on credit cards, there is absolutely no guarantee that the rental providers carry comprehensive insurance. In fact, it simply doesn’t matter if they choose to self-insure or purchase a policy. This could be a painful claim process.

Overall, I feel the (up to) $8,000 limit and broad coverage to be agreeable, but I can’t get over certain clauses within the PDS that leave full discretion to the claims officer.

Read the RACV PDS here.

Check out the RACV website on this coverage here.

WorldCare — Frequent Traveller Australia

Before the days of Ride Hacks, I was more scared of what might happen if I was to have a damage issue with a rental car, especially if it wasn’t my fault. Maybe you’re feeling like this now. A domestic travel insurance policy was my lightbulb moment when I realised I could comfortably say no to all of those rental excess reductions and trust that I have a policy to cover my ass should anything go wrong. I reached for an amazing policy offered by WorldCare.

Unfortunately, the policy for WorldCare has since been updated to exclude:

This section does not cover items such as, but not limited to, tyres and/or windscreens, roof and underbody if they are not covered by the indemnity provided by the rental company or agency under the rental vehicle agreement to which the excess, deductible or damage liability fee applies.

Given this, I’m not going to write about it as a genuine option for someone looking to reduce their liability risk. We need full inclusive coverage, otherwise we aren’t much better off.

For transparency, you can read the Worldcare PDS here.

A Word of Warning

Like any financial product, an insurance policy needs to be matched to your personal circumstances. Whilst this guide can’t necessarily recommend which policy is best for you, we can list the key considerations to check off before your make a final decision.

Here are some questions to ask yourself:

  • Do you have a big rental week coming up? Usually a single week locally can make an annual policy pay for itself and you’ll have the rest of the year with paid up rental vehicle insurance. Sometimes it might make sense to undershoot an annual policy that covers 80% of your rentals, and buy specialty policies for once-off trips in cars that might not be covered in your annual policy. Be careful about over-insuring though – most policies will not pay anything if they think another policy will pay it instead.
  • Do you hire cars frequently but rarely in your local city (or within 150km from your home)? You may want to consider an American Express card. This can be particularly useful if you travel for work between cities.
  • Do you intend on driving in areas where there are unsealed roads? If so, you may consider Thrifty, Avis and Budget, and add on Rental Car Protection or RentalCover.com

I now live in Singapore, so my trips back to Australia need to be covered. I’ll be leaning on RentalCover.com as my primary annual policy for 2018.

Other Countries

Whilst it would be impossible to go into this level of detail for every country, it’s important to note that they are all very different. In particular, USA and Canada typically leave you with full liability or no liability, and nothing in between. Additionally, there is typically no Supplementary Liability Insurance (Third Party CTP) included by default. That means if you accidentally hit somebody, you may be up for their entire medical and property bills. North America is different. It deserves its own post and will come in time. Just be warned before you make a booking. The UK and Europe run the same system as we do in Australia, however if you are travelling from Australia your credit card insurance or purchased international insurance may cover you. Check the PDS before you set off.

This might be another good reason to consider a global policy instead of an ad-hoc local policy.

Closing Thoughts

As with my other Ultimate Guides, this is a living document. I’ll add to it over time, correct the inevitable mistakes and keep it relevant for the changing landscape of car rentals. I hope you have found this useful and can draw a few insights that will save you real dollars this year. Please get in touch if you feel I need to explain any particular section in more detail or a correction needs to be made. Good luck!

Guide last revised in March 2018

Car Rental Terminology Guide

Me, probably like you, and definitely like many, have found the jargon in car rental terms and conditions ridiculously confusing. There is a minefield of terminology and acronyms thrown around. It wouldn’t be so cynical of me to suggest that this is intentional. If there is something missing, leave a comment below and we’ll add it into the guide.

Term Meaning
Excess the maximum amount that you are liable to pay towards damages, providing you have not broken the rental agreement.
Rental Agreement both the document that outlines the vehicle condition and your rental charges, and the booklet of terms and conditions provided when you pick up the vehicle.
Accident Damage Excess (AED) Hertz’s version of Excess. However Hertz has an additional ‘Single Vehicle Accident’ fee which is applied on top of the AED.
Damage liability fee (DLF) Europcar’s version of Excess. The key difference is that Europcar works on an ‘event’ basis, where you are liable for paying the DLF for |
Loss Damage Waiver (LDW) Avis’ version of Excess. Unlike Hertz and Europcar, Avis explicitly states you have full responsibility of the vehicle and automatically. In fact, it is the same case for all of them. |
Damage Waiver (not to be confused with Avis’ LDW) an option by the rental company to reduce your Excess for each and any of the events where the Excess would apply. |
Super Damage Waiver the option to reduce your damage to less than the standard Damage Waiver. It sometimes includes additional items, e.g. tyre and glass damage, but only applies if you have not broken the terms of agreement.
Accident Excess Reduction (AER) Hertz’s version of the Damage Waiver. Excludes tyre and windscreen damage. AER costs $25.90 per day for Prestige cars. They also have |
Collision Damage Waiver (CDW) Europcar’s version of the Damage Waiver. Excludes windscreen, headlight, wheel and tyre damage. CDW costs $42.24 per day for Prestige |
Excess Reduction (ER) Avis’ version of the Damage Waiver. Don’t be confused with their LDW which is included in the rental cost. ER costs $26.40 per day, and there is no further reduction available.
Snow Line generally the mountainous areas in NSW, VIC and TAS during winter where snow chains may be required. Each rental provider has their own definition for the location and the time of year this applies.
Snow Cover (SNO) an option by Europcar and Hertz where they allow you to drive above the Snow Line during winter. If you will be driving in conditions where snow chains may be required, you will need to purchase this coverage or you will have deemed to have broken the terms of agreement and bear full liability for any damage to the car. Europcar charges $24.14 for standard and Prestige cars, and $38.40 for 4WD vehicles. Hertz charges flat $22 per day.
Unsealed Road Cover only Europcar offers unsealed road cover at $18.10 per day limited to 4WD vehicles only. This doesn’t include All Wheel Drive cars. However this |
Complimentary Credit Card Insurance insurance coverage that comes with many high-end credit cards that have a high annual fee. It is used as a benefit to sell the credit card, but usually had strong conditions for when claims can be made.
Rental Excess Insurance a specific insurance policy for covering rental vehicle excesses. They are typically comprehensive, but are priced on a per-rental basis instead of an annual basis.
Travel Insurance Policy a travel insurance policy for travelling domestically. Commonly used for recovering travel costs if a traveller gets sick, has an injury, or |
Damage recovery fee the fees for recovering a vehicle and taking it to a repair shop for assessment.
Insurance Exclusions the specific parts of the vehicle that are not covered under the Excess. E.g these are often Tyres and Glass of which if broken are paid for on top of any maximum excess you must pay.
Single Vehicle Accident an accident not involving another car. A parked car is still considered a Single Vehicle Accident. This is a term used by Hertz to push up your maximum liability when no other parties are involved and includes theft and weather damage.
Breach of contract when you break any clauses within the rental agreement. Each agreement has further clarifications on ‘Major Breach’, which means that any limit of |
Fair wear and tear although it’s never explicit, this refers to what would be an acceptable condition for the car to be returned and rented out to another customer. Some |
Third Party Loss any claim from another person or company for damage caused by you during your rental.

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19 Responses to “2018 Ultimate Guide To Rental Car Insurance — The good, the bad, and the ugly”

  1. I came here by chance looking for Car Rental Insurance reviews, etc in Google a couple of weeks ahead of my trip to AU. Your guide replied all my concerns and way more. I enjoyed the reading and appreciate your efforts to put this guide together! I found it very helpful. Thanks!

  2. Hi there,
    Great, easy to read and understand summary. Thanks!
    Just thought it might be worth adding/updating that rentalcover.com no longer issues an annual policy.
    I just had an online chat and phone call with them and both parties I chatted to confirmed this.

  3. Morna Mcrae

    I purchased an excess policy (trip cover) 2 hours after picking up my rental car today from Hertz. I’m wondering if any of these companies allow you to buy a policy AFTER you collect the car? Looks as though mine will be useless.😳

    • Hi Morna, unfortunately you are correct. Trip Cover won’t cover you if you start your journey before buying the policy. However, they do have a 21 day cooling off period so I suggest you call them and see if you can get your money back. Whilst this isn’t guaranteed, but it’s worth a shot.

      How long is your rental? If it is a long time, you might want to request for the rental agency to restart the rental for you. That is, take the car back, and start again. They may not do this, but it could allow you to purchase the policy before the second rental. It would be ideal for a longer-term rental.

      Finally, I haven’t heard of any insurance providers allowing for insurance after commencing the rental. This is mostly because you would have to prove the damage happened after the policy was purchased and not already on the car. No one can verify this, so they don’t cover these cases.

      Hope it works out for you Morna! Good luck.

  4. Hi Todd,
    Just following up from earlier comment re: rentalcover.com no longer doing an annual policy.
    Just wanted your thoughts on which policy would be the next best option as an annual one.
    I also used worldwide insure a few years ago when they were cheaper but even now, with their higher premium, they still seem to be the best bet (unsealed roads aside).
    I’ve got a few days of domestic (Australian) hire coming up plus 3 more international trips towards the end of the year.
    Cheers
    Daniel

    • Hi Daniel, nice to see you back on the site 🙂

      It would be hard to specifically recommend one policy, but here is how I would think about it for your situation. The domestic rental should be matched with a policy that ensures you are covered properly for that one occurance. And for international, I’d first look at whether your credit card has the appropriate insurance for international cover. This also depends on which countries you are going to. If it doesn’t, then you might be better off looking for a worldwide policy to cover domestic and international.

      Given that there are multiple options, the simplest would be something like Trip Cover domestically + credit card travel insurance (if you have a decent credit card) for international. But if you don’t have a decent credit card, something like Worldwide Insure would cover both sets of rentals, but be sure you don’t get caught on any of the policy limits I mentioned above.

      Because you have more risk internationally, I’d start by trying to optimise there first, and then see if domestic can be wrapped up in one policy. If not, then two usually works out to be a safer option.

      Happy to help! 🙂

  5. Hi Todd,
    Thanks for the information.
    I’ve got an ANZ platinum card which has been fine for domestic travel, I’ll probably go that way again.
    For international, where I’m travelling through Germany, Austria, Switzerland and France, I was leaning towards worldwide insure again, probably due to it being familiar to me and price wise, it’s still quite competitive. I could even go to the deluxe annual policy, for not much more, at GBP79.50 and it will cover me in Aus too.
    Hmmm, food for thought.
    I’ve still got a couple of months to sort it out but thanks again for your information and advice.

  6. Jodie

    Wondering if you would review East Coast Car rentals? They don’t operate in WA and NT, but do in the rest of Australia. They have very reasonable rates according to the website. Just unsure on the comparisons with other car rentals.
    Have used and had a small claim with Tripcover with no problems.

    • Thanks for your comment Jodie 🙂 I’m pleased to hear Tripcover have been good to you.

      Thanks for the tip about East Coast Car rentals. Almost all of our content (in terms of reviews) are based on premium rentals – usually sport or prestige cars. I’ve checked out East Coast Car Rentals and they look competitive in terms of price but don’t have the vehicle range that matches the other players in the market. For this reason, we won’t be reviewing any of their cars soon. However, a quick google search for ‘east coast car rentals reviews’ brought up plenty of results that provide a general impression for their level of service. Sorry we aren’t able to provide this content for you Jodie!

  7. thank you so much Todd.

    We have rented a campervan (no toilet, no shower) with Britz for 20 days, and we are thinking to take an insurance with Tripcover or Rentalcover. Rentalcover is cheaper 240 AUD , and also the provide road assistance, towing, etc… Tripcover is more expensive 370 AUD, but they do not provide road assistance if Britz do not provide it… but Allianza looks better company than Rentalcover insurance (Astrenska Insurance Limited.). You said Tripcover is the best option 95%, but I don’t know in this case… what should we do in your opinion?

    Thanks again.

    • Hi Ramon, thanks for your comment.

      Firstly, I should say that I can’t actually recommend what is best for you. Legally, I’m not able to do so. However, I should note that my analysis above is mostly based on cars and I’m not quite sure where a campervan sits within the mix. I personally rented a motorhome (a big one) in NZ last month and used RentalCover. Luckily nothing went wrong. I recommend coming up with a list of ‘what could go wrong’ and then comparing the different policies from their PDS. This is the way I approach it. Sometimes a feature like roadside assistance can look pretty poor in the fine print. Also consider if your credit card covers any part of roadside assistance or insurance.

      Good luck, hope you buy a policy you’ll never need to use!

  8. Rental car insurance can be confusing, complicated and costly. That is why if you’re not sure whether buying rental car insurance makes sense for you, it can help to first understand what coverage you already have. Talking to a local agent about your car insurance policy before you rent a vehicle may help you make an informed decision when you’re at the rental counter.

  9. Thanks for the great piece of research! Just want to clarify your point on the Amex Explorer card “Only includes the primary card holder, not supplementary holders.” It seems the supplementary card holder is eligible for Loss Damage Waiver Cover and have called Chubb insurance to confirm this too.

What do you think?