Do You Buy Excess Cover When Renting a Car?

witsa on 01/03/2020 - 09:23
Last edited 01/03/2020 - 09:30

About to hire a car for an interstate holiday for about a week . Usually it costs a bit more to get your excess reduced.

Do you guys normally do this?

Usually the excess is something crazy like $4000 - and the extra to reduce it is about $15 a day.

4000/15 = 266 days

Therefore, it probably doesn't make sense unless you average an accident every 266 days as if you hired your car for that long, you will have paid the same as the claim. I've been driving for decades and only made 2 claims.

Of course, there is the piece of mind factor and there's also the fact you're more likely to have an accident in an unfamiliar city.

Do you normally get the excess reduced? Why or why not?

EDIT

Actually it sounds like i may not even need it anyway as my Westpac Altitude Black credit card actually covers it.

https://www.westpac.com.au/docs/pdf/pb/credit-cards/consumer…

"We will reimburse you up to A$5,500 for any insurance excess or deductible which you become legally liable to pay in respect of a claim under the rental vehicle insurance policy of the rental vehicle during the rental period"

Will ring the bank to verify but still interested in whether people do the arguably economically rational thing and not get the excess reduced or the loss avoidance thing and get it reduced.

Travel Car Rental

Comments

  • IceCreamBandit on 01/03/2020 - 09:32
    +2

    4000/15 = 266 days

    Therefore, it probably doesn't make sense unless you average an accident every 300 days as if you hired your car for that long, you will have paid the same as the claim. I've been driving for decades and only made 2 claims.

    While the maths is technically correct, you may not be taking into account that you may be driving signifcantly longer distances compared to your normal driving habits in unfamiliar places which can increase the chance of an accident.

    Also, if an accident's going to happen, it's going to happen regardless of your driving history. Example being a during or after freak storm and a tree lands on your parked car or as you drive.

    Of course, you'd hope that nothing happens and that the money is just 'wasted'.

    Do you normally get the excess reduced? Why or why not?

    To answer your question, technically yes, but not through the rental company. When I go on trips that has flights and I hire a car, I just get travel insurance that has rental vehicle excess cover.

    • witsa on 01/03/2020 - 09:40

      Unavoidable accidents like storms - well that can happen at home too so I don't think you can factor that in.

      Driving in foreign place / longer distance - yes that definitely increases the probability of an accident but I would say not 10x fold.

      Good idea about the travel insurance - this is interstate so no travel insurance bought. But I did just find out my credit card covers this so as long as I pay via that card, it's fine.

      • Noblejoker on 02/03/2020 - 17:34

        But these unavoidable accidents still cost heaps for the excess
        Cheaper to buy travel insurance for interstate trip than the excess
        Family trip for 15 days would be $150 includes cancellation, some medical etc. - cheaper than what they sting you to reduce the excess
        But Yes - The OzB pro tip is always book through a compatible credit card with travel/excess cover
        Make sure that cover applies for domestic as well as international travel

  • cruiserbruiser on 01/03/2020 - 09:33

    Yes, just in case

  • oscargamer on 01/03/2020 - 09:49
    +2

    I never buy the in house insurance. Always get'holiday insurance' that covers the large excess.

    • dust on 01/03/2020 - 09:54

      Yes this. Especially if your credit card includes travel insurance!

    • dexx on 11/03/2020 - 16:14

      Would travel insurance cover rental car accident damage?

  • jjjaar on 01/03/2020 - 09:49

    I’m glad you’ve realised your credit card should cover it. Perhaps call them to confirm?

    I’ve taken out travel insurance in the past to cover this gap. I was only away for a few days so insurance was only about $100 and the peace of mind was worth it.

  • netjock on 01/03/2020 - 09:55
    +2

    You can also buy it separately Car Hire Excess dot come comes to mind. A lot cheaper than buying it from the rental company.

  • Heaps for Cheaps on 01/03/2020 - 10:00

    I sometimes need to hire a small van for a day and always get the excess insurance.

  • Ocker on 01/03/2020 - 10:22

    Just buy normal travel insurance, will give you hire car excess cover (check the policy amount) plus insurance for other events.
    Regardless, check the car for any existing damage when you collect it, and have them physically inspect the car when returning - save any nasty surprises.

  • crashloaded on 01/03/2020 - 10:28

    I've found the problem with hire cars in Europe is they won't offer you roadside assist unless you purchase insurance from them.

    • Ughhh on 01/03/2020 - 11:11

      unless you purchase insurance from them.

      Huh, they should have insurance on their cars, this is just the excess cover to initiate claim.

      • crashloaded on 01/03/2020 - 11:37

        When I hired a car in Croatia, they told me they won't offer any roadside assistance unless the insurance is purchased through them, not covered by cc.

        • Ughhh on 01/03/2020 - 12:07
          +1

          unless the insurance is purchased through them, not covered by cc.

          Insurance is not the same as excess…

          CC doesn't provide the car rental insurance, they just pay the excess to the rental company.

          • crashloaded on 01/03/2020 - 14:33

            @Ughhh: I see, so in order to get the insurance you still have to pay the rental company for the cost of the insurance, cc just pays the excess in the event you need to make a claim.

            • John Kimble on 01/03/2020 - 14:36

              @crashloaded: No, rental companies offer optional excess reduction fees they add to the daily rate. So for example you pay another $50 a day, and if you have an accident, the excess might only be $500 or less, otherwise it would be $2,000 or over.

              You forego this and buy a car rental excess insurance with a third party, covering you for for $2,000+ so you can give this to the car rental company if you make a claim.

            • Ughhh on 01/03/2020 - 15:19

              @crashloaded:

              so in order to get the insurance you still have to pay the rental company for the cost of the insurance

              No, at no point you pay for the insurance. The car is already insured and paid for by the owner of the car, the rental company (though actual cost would already be factored into the rates). Just like your own car insurance, if you get into an accident, you pay the excess to initiate a claim, difference with rental vehicles is that the excess is a lot more expensive.

              If you read the CC PDS carefully, you'll notice that it states "Rental vehicle excess", not insurance.

              If you read the rental vehicle terms, you'll notice it states "excess reduction". It's all about the excess.

  • Meho2026 on 01/03/2020 - 10:56
    +2

    I never take the extra insurance from the car hire company. I buy an annual policy that covers domestic and international car hire from https://www.rentalcarprotection.com.au/.
    I found out about them after reading this article, which outlines all the pros and cons of the different kinds of insurance you can use, including credit card and the different stand alone policies.
    https://www.ridehacks.com/ultimate-guide-to-rental-car-insur…

    • sacah on 01/03/2020 - 20:14

      Thanks for that, some great info I hadn't thought of before.

    • mjwills on 02/03/2020 - 09:35
      +1

      What is the benefit of doing this, over using the included coverage with gold / platinum credit cards?

      • Meho2026 on 04/03/2020 - 03:12

        It’s all explained in that article

    • Always think price on 01/10/2020 - 20:11

      Sorry to open this up again. Did you have any issues with them? I have a policy with them and I can't get a hold of them. I have emailed and called and nothing.

      • mjwills on 02/10/2020 - 08:48
        -1

        Get a Gold / Platinum credit card with free excess cover (i.e. most of them). There is no good reason to pay for excess insurance.

        • Always think price on 02/10/2020 - 14:48

          I've been overseas and here with COVID situation. Not really an option

      • Meho2026 on 03/10/2020 - 08:23

        Do you mean you cant get hold of rentalcarprotection.com.au?
        Try these alternative numbers 1300 482 627 or 02 8907 5091
        or theres the online claim portal
        https://claims.covermore.com.au/Halo/

  • Blue Suby on 01/03/2020 - 10:59
    +1

    Last time we hired a car with (I think) $500 excess some one kindly ran into us in a hotel car park and took off. (No CCTV) It was our last day so couldn't do much about it. You might be the most careful and considerate driver but it doesn't take into account other idiots out there.

    • miwahni on 02/03/2020 - 21:24

      This ^ . In NZ in 2018, I had paid to reduce but not waive the excess. No more than an hour into the trip, a truck threw up a stone which smashed the windscreen. Two days later someone bumped into the front of the car. As a result - two excesses payable, with only one reduction. Fortunately the damage in both cases was under $400 to repair so the hire company ended up charging one reduced excess ($350) and one repair, instead of the second excess of $1500.

  • Ughhh on 01/03/2020 - 11:13
    -1

    Just use your credit card and make sure to pay for the car hire with that card.
    No need to pay for additional insurance from other companies.

  • John Kimble on 01/03/2020 - 12:47
    +1

    I buy car rental excess cover separately from Trip cover, much cheaper.

  • Butterfly Gocha on 01/03/2020 - 14:44

    Buy domestic travel insurance policy which is cheaper than the added on cost from the rental company- and many also covers the excess cost

  • Muffinman01 on 01/03/2020 - 22:10
    +1

    I've never bothered with it before, as happened to Blue Suby some kind soul hit my car and didn't leave a note.

    Rental insurance company took $4000 from my card from memory while they waited for an assessment to come back. In the end it was about $3500 worth of damage, and the rental company refunded the extra that they took. Travel insurance then covered the rest without issue, but it took around 6 weeks for everything to play out. In hindsight, I would have preferred to pay the extra money than deal with the hassle of dealing with the rental company and travel insurance.

  • pjcook on 02/03/2020 - 07:51
    +2

    I hit a roo in a rental car, cost me $4000.00 I now take the insurance cover.

  • Grofazau on 02/03/2020 - 08:23

    What credit card do people recommend with built in hire car insurance?

    • mjwills on 02/03/2020 - 09:34

      Most gold / platinum cards have it. HSBC Platinum Credit Card is an example, as long as you can spend $6K on it a year.

  • investastrix on 02/03/2020 - 10:22

    I usually get the car hire excess insurance from (https://www.worldwideinsure.com/car-hire-excess-insurance.ph…)

    Never had the need to claim anything. The have good reviews on trust pilot. Its just a "Peace of Mind" thing for me. However, if anything happens the rental company would still charge the excess on your card and you need to contact them to get it reimbursed. So it depends on if you can wait until the claim comes thru.

    There are other companies that insure only for the car hire excess. They are much cheaper than the rental agencies.

  • OzHunterNSW on 02/03/2020 - 12:07
    +1

    The whole sector is a complete rip off….. it depends.
    But the most important thing is to inspect the vehicle upon receipt…. walk around with mobile phone video.

    point out every blemish even if just 1mm….. and ask them to acknowledge all pre existing marks and nicks and bug poop.

    The huge scam is to slug you for damage you did not do.

    So walk around the vehicle with video and the owners alongside you…. their opinion will be recorded upon the video.

  • werdnanostaw on 02/03/2020 - 14:48
    -1

    Most / a lot of CC excess cover:

    • only applies if you have taken out all insurance offered by car rental company.

    • only applies to international travel.

    Excess cover, either the one offered by rental car company or CC does / may not cover you for:

    • underbody or overhead damage

    • glass and mirrors

    • wheels and tyres including punctures

    • wrong fuel

    • lost keys

    • internal damage, such as spilled coffee

    • single vehicle accidents

    • where other driver isn't insured (in USA car rental companies offer Uninsured Motorist Protect UMP)

    • roadside assistance, though they usually cover breakdown due to mechanical failure

    • towing in case of accident

    • return of damaged vehicle to original rental facility because vehicle is owned by franchisee, not nameplate rental company. In USA this can be 1000s of km.

    • loss of income while vehicle is being repaired

    • transport of vehicle to and from repair facility

    • administration costs

    • diminution of value due to damage, eg if resale value of undamaged car is $20,000 and they say resale value is reduced to $15,000 you are liable for $5,000 difference.

    Never take out excess reduction cover offered by car rental company because it covers you for almost nothing.

    Always take out third party car rental insurance such as www.rentalcover.com which costs about $10/day for $100,000 of cover for whatever car rental company throws at you.

    Always take photos and video of car at pickup and return.

    Always be doubly careful when renting in USA because they rent cars without any cover because a lot of Americans have car rental cover included in their home vehicle insurance. Best to book through Australian company such as driveaway.com.au because they include all basic insurance.

    Always check that vehicle has third party property and personal public liability cover. If you hit a Rolls Royce or a shop front or a person you will be bankrupted.

    • witsa on 07/03/2020 - 14:56

      is that true though or are you just basing this on what the rentalcover.com site says?

      basically what you're saying is the excess cover doesn't cover for any significant accident where the car is a write off?

      that's definitely not what the CC policy is saying (https://www.westpac.com.au/docs/pdf/pb/credit-cards/consumer…)

  • blutek on 07/03/2020 - 13:44

    If you are unlucky and have a second insurance claim, then you will pay the excess amount twice (without excess cover).

  • werdnanostaw on 08/03/2020 - 20:26

    This PDS is rather strange because it refers to "Eligibility for Overseas travel insurance" and then to "Rental vehicle excess insurance in Australia policy". I haven't researched this issue. I leave that as an exercise for Westpac CC holders who want to use their insurance.

    From PDS referenced:

    —————-Start quote

    Overseas travel insurance policy for persons up to and including 80 years of age.

    Eligibility for Overseas travel insurance.

    As a current Westpac cardholder, you automatically become eligible for complimentary Overseas travel
    insurance cover when you satisfy all of the following eligibility criteria:

    1. You either permanently reside in Australia or hold a
      current and valid residency Visa and reside in Australia; and

    2. You spend at least $A500 on your prepaid travel costs (i.e. your travel costs that you pay for before leaving Australia) and you charge these costs (e.g. cost of your return overseas travel ticket; and/or airport/departure taxes; and/or your prepaid overseas accommodation/travel; and/or your other prepaid overseas itinerary items) to one of your following eligible credit cards issued by Westpac:

    —————-End quote

    With WP CC you have to spend $500 to activate insurance cover. ANZ is better because it only requires $250 to be spent. This is important if you have to pay credit card fees on amount required to reach eligibility amount.

    I usually book airfare through bricks and mortar agent so I can pay eligibility amount on CC and the remainder by direct transfer.

    I use Universal Traveller because they price match Internet prices which their parent company, Flight Centre, no longer does.

    —————-Start quote

    Rental vehicle excess insurance in Australia policy. (Black card, Platinum Plus card & Platinum A card cardholders only)

    Rental vehicle excess insurance in Australia cover is available only to Westpac Black card, Platinum Plus card and Platinum A card cardholders.

    We will reimburse you up to A$5,500 for any insurance excess or deductible which you become legally liable to pay in respect of a claim under the rental vehicle insurance policy of the rental vehicle during the rental period provided:
    • the rental vehicle was rented from a licensed rental agency; and
    • the hiring agreement incorporates the rental vehicle insurance; and
    • you comply with all the requirements of the rental organisation under the hiring agreement and of the rental vehicle insurance.

    We will not pay for…

    We will not pay for your costs arising from:
    • loss or damage resulting from the operation of the rental vehicle in violation of the terms of the rental agreement; or
    • wear and tear, gradual deterioration, damage from insects or vermin, inherent vice or damage; or
    • driving the rental vehicle on non-public roads.

    —————-End quote

    Rental vehicle excess insurance is only provided for rentals in Australia.

    Policy will only pay A$5,500 for any insurance excess or deductible. It doesn't provide cover for any of the items I have listed.

    I have read that "the hiring agreement incorporates the rental vehicle insurance" may mean that if you haven't taken the insurance offered by the rental company you don't get any cover. The ANZ PDS has words to this effect.

    There is no mention in the PDS of what happens if the car is written off. I believe (hope) that car rental agreements usually provide cover for this subject to applicable excess.

    As in all contracts, read the PDS and if uncertain check with car rental company phone support. I wouldn't ask at rental counter. They usually have no idea about rental conditions.

    For example, when I was recently picking up a rental car in NZ, the agreement said it could only be used on "formed roads". As an engineer I know that this term means an unsealed road that has been shaped by a grader.

    http://www.lgam.info/formed-road

    However, the rental check-out lady insisted it meant sealed roads only. I wasn't prepared to risk it because I wasn't certain they didn't use a different definition in NZ so I stuck to sealed roads even though this meant a significant detour / retracing when a road became unsealed.

    It appears that a formed road has the same definition in NZ:

    https://at.govt.nz/about-us/working-on-the-road/road-process…

    This is why it is best to organise rental before you need vehicle because you have time to read PDS which is impossible on scratched tablets with tiny fonts that they give you to "sign" for rental agreement.

  • dexx on 12/03/2020 - 22:51

    If you were renting for only a week or so, could you take out a standard car insurance cover note and then cancel the cover note at the end if there were no issues? Or do you have to be the car's owner for that?

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