06/10/2003
Planning your next holiday or business trip and need a hire car? While securing the vehicle itself might seem straightforward, understanding and purchasing the right car hire insurance, particularly excess cover, is crucial for your peace of mind and wallet. Shockingly, the best car hire insurance, including vital excess cover, can be up to ten times cheaper when purchased independently rather than directly from the car hire firm. This guide will walk you through why and how to secure the best protection for your rental.
Many travellers assume they must buy insurance at the rental desk, but this is a common misconception and often an expensive mistake. Our extensive research consistently shows that the cover offered by car hire companies is not only riddled with exclusions but also significantly more costly, sometimes up to £183 more per week than specialist insurance purchased online. Independent online specialists consistently provide superior cover at a fraction of the price. We've delved into policies from major providers and brokers alike to pinpoint the best car hire excess insurance options, ensuring you're fully protected without overpaying.
Understanding Car Hire Excess and Why It Matters
When you hire a car, especially within Europe, basic insurance is always included in your rental agreement. However, this fundamental cover comes with an 'excess' – a fixed amount you are liable to pay towards repair costs in the event of damage or theft, regardless of who is at fault. This excess can be substantial, often up to £2,500. The cost of car repairs has seen a significant increase in recent years, meaning even minor incidents can lead to hefty charges. For instance, a scratched door might set you back around €250, a puncture €300, and a replacement windscreen as much as €750. Without proper excess cover, these costs come directly out of your pocket.
It's important to note that the situation for hiring a car in North America (USA and Canada) can be slightly different regarding included insurance and excess, often requiring a deeper look into specific regional policies. For now, our focus remains primarily on the European model.
What Exactly Does Car Hire Excess Insurance Cover?
Car hire excess insurance, also known as an Excess Reimbursement Insurance (ERI) policy, is designed to reimburse you for the excess amount you have to pay the rental company if your hire car is damaged or stolen. This means you pay the rental company first, and then claim that amount back from your ERI provider. While you can obtain this type of insurance from your car hire provider, it is almost invariably more expensive and offers less comprehensive protection compared to an annual or daily ERI policy purchased from a specialist insurer.
A good ERI policy extends beyond just the basic vehicle bodywork. Crucially, it often covers parts of the car typically excluded by standard rental company waivers, such as the tyres, windscreen, underbody, mirrors, locks, and roof. Additionally, many specialist policies offer cover for misfuelling, lost or stolen keys, towing costs following an accident or breakdown, personal belongings, curtailment (if your hire agreement is cut short), and even drop-off charges if you're unable to return the car yourself. If you're considering a high-value or larger vehicle, always check the 'max value' column of any policy to ensure your chosen car doesn't exceed the insurance threshold.
Your Options for Securing Excess Cover
When it comes to purchasing car hire excess insurance, you generally have three distinct options. We strongly recommend the first two for their value and comprehensive nature:
- Buy from an independent insurance company: This is our top recommendation. Known as Excess Reimbursement Insurance (ERI), these policies are typically cheaper and far more comprehensive. You can conveniently purchase them online before your trip. The process involves paying the excess to the rental company upfront if damage occurs, then claiming it back from your ERI provider.
- Buy from a car hire broker: Many people book their rental cars through brokers like Booking.com, Holiday Extras, or Zest Car Rental. These brokers often offer their own ERI policies, underwritten by an insurance company, at the time of booking. While many broker policies offer poor cover, a select few stand out for their quality. Zest Car Rental, for instance, includes basic ERI and offers a well-regarded top-up option.
- Buy from the car rental company itself: Often called a Damage Waiver, Super Collision Damage Waiver (SCDW), or Excess Waiver, this option reduces your excess (sometimes to zero) but comes at a significant premium and usually offers comparatively poor cover. Our research unequivocally shows this is the least advisable route.
Best Car Hire Excess Insurance from Specialist Insurers
Our analysis has identified several top-performing specialist ERI providers. These companies offer excellent policy scores, competitive pricing, and broad coverage, making them superior choices for most travellers. Prices are based on standard European cover for a 45-year-old single man, for a week in Spain or an annual policy for Europe (May 2024 prices, subject to change).
| Provider | Policy Score | Weekly Price (Spain) | Annual Price (Europe) | Policy Limit per Claim | Max Car Value | Key Coverages | Misfuelling | Key Cover | Towing | Personal Belongings | Curtailment | Drop-off Charges | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cover4rentals GOLD | 80% | £16 | £38 | £10,000 | £65,000 | T, W, U, M, L, R | Yes | £1,000 | £750 | £1,000 | £500 | Yes | Yes |
| Worldwide Insure DELUXE | 80% | £24 | £55 | £50,000 | £50,000 | T, W, U, M, L, R | Yes | £500 | £500 | £500 | £300 | Yes | Yes |
| CHEW Insurance | 79% | £27 | £37 | £10,000 | £60,000 | T, W, U, M, L, R | Yes | £1,000 | £500 | £1,000 | £500 | Yes | Yes |
| Reduce my excess | 78% | £20 | £45 | £10,000 | £65,000 | T, W, U, M, L, R | Yes | £500 | £500 | £1,000 | £300 | Yes | Yes |
| Questor Insurance | 77% | £28 | £45 | £10,000 | £100,000 | T, W, U, M, L, R | Yes | £1,000 | £750 | £1,000 | £500 | Yes | Yes |
| icarhireinsurance | 76% | £33 | £42 | £6,000 | £100,000 | T, W, U, M, R | £1,000 | £750[a] | £1,000 | [a] | [a] | Yes | |
| Insurefor | 72% | £25 | £59 | £10,000 | £50,000 | T, W, U, R | £500 | £500 | £500 | £300 | Yes | Yes |
Key: T=Tyres, W=Windscreen, U=Underbody, M=Mirrors, L=Locks, R=Roof. [a] Available as an optional extra. Policy scores are based on a comprehensive assessment of 17 policy categories. Prices are subject to change.
Best Car Hire Excess Insurance from Car Hire Brokers
While many broker policies don't measure up, some offer decent value, particularly if you prefer a one-stop booking experience. Here's how some of the top brokers' ERI policies compare (May 2024 prices, subject to change, based on rental of smallest vehicle for 45-year-old single man in Malaga, Spain):
| Broker | Policy Score | Weekly Price (Spain) | Policy Limit per Claim | Key Coverages | Misfuelling | Key Cover | Towing | Personal Belongings | Curtailment | Drop-off Charges |
|---|---|---|---|---|---|---|---|---|---|---|
| Booking.com/Rentalcars.com | 83% | £47 | £20,000 | T, W, U, M, L, R | Full value | Full value | Full value | £0 | Yes | No |
| Zest Car Rental Top Up Insurance | 75% | £35 | £10,000 | T, W, U, M, L, R | £1,500 | £500 | £750 | £300 | Yes | Yes |
| Holiday Autos | 58% | £48 | £2,500 | T, W, U, L, R | £250 | £450 | £250 | £250 | Yes | No |
| Holiday Extras | 58% | £19 | £7,500 | T, W, U, L, R | £500 | £500 | £500 | £300 | Yes | No |
| Expedia | 54% | £41 | £3,500 | T, W, U, M, L, R | £0 | £200 | £3,500 | £0 | Yes | No |
| Wisecars | 52% | £42 | £1,000 | T, W, U, M, R | £0 | [b] | £1,000 | £0 | Yes | No |
Key: T=Tyres, W=Windscreen, U=Underbody, M=Mirrors, L=Locks, R=Roof. [b] Company did not confirm value. Policy scores are based on a comprehensive assessment of 17 policy categories. Prices are subject to change.
The Pitfalls of Car Hire Company Insurance (SCDW)
Car hire companies frequently try to sell what they call Super Collision Damage Waiver (SCDW), or variations like Collision Damage Waiver (CDW) or Excess Waiver. While these policies aim to reduce your excess, often to zero, they come at an exorbitant price and offer significantly less comprehensive cover than independent ERI policies. Our research consistently shows that it's simply not worth buying this insurance from the car hire provider.
None of the car hire companies provide the extensive cover for elements like misfuelling, key loss, or curtailment that specialist ERI providers do. This stark difference in value and coverage underscores why securing your excess insurance independently is almost always the smarter choice.
| Car Hire Provider (SCDW) | Policy Score | Weekly Price (Spain) | Key Coverages | Misfuelling | Key Cover | Towing | Personal Belongings | Curtailment | Drop-off Charges |
|---|---|---|---|---|---|---|---|---|---|
| Europcar | 55% | £190 | T, W, U, M, L, R | £0 | [a] | [b] | [b] | No | No |
| Enterprise | 49% | £168 | T[a], M, L, R | [a] | [a] | [b] | £0 | No | No |
| Alamo | 49% | £147 | T[a], M, L, R | [a] | [a] | [b] | £0 | No | No |
| Goldcar | 44% | £193 | T[a], W, U, M[a], L[a], R | £0 | [a] | £500 | £0 | No | No |
| Avis | 41% | £165 | T, W, M, L, R | £0 | £0 | [a] | [a] | No | No |
| Budget | 41% | £199 | T, W, M, L, R | £0 | £0 | [a] | [a] | No | No |
Key: T=Tyres, W=Windscreen, U=Underbody, M=Mirrors, L=Locks, R=Roof. [a] Available as an optional extra. [b] Company did not confirm value. Policy scores are based on a comprehensive assessment of 17 policy categories. Prices are subject to change (based on 45-year-old driver, smallest car, one week from Malaga airport, July 2024).
Frequently Asked Questions About Car Hire Excess Insurance
What happens if I damage a rental car?
If you damage a rental car, you will typically be responsible for the excess amount stipulated in your rental agreement. This means you will pay this portion of the repair costs directly to the car rental company. If you have an Excess Reimbursement Insurance (ERI) policy, you can then claim this amount back from your ERI provider, effectively being reimbursed for your outlay. Without ERI, you bear the full excess cost yourself.
Do I need full protection on car hire?
Some car hire companies may heavily push a 'full protection' policy, claiming it offers superior cover. However, you have the right to refuse this and opt for an independent ERI policy instead. A comprehensive ERI policy from a third-party specialist often provides better and more extensive protection than the 'full protection' offered by the rental company, at a significantly lower cost. It covers the crucial excess amount and often extends to parts of the car that rental company waivers exclude.
Should you get car insurance from a rental place?
In short, no. As Guy Hobbs, a leading car hire expert, advises, "The insurance sold by car hire companies is overpriced and offers inferior cover." While some individuals prefer it to avoid leaving a large deposit or pre-authorisation on their credit card, there are alternatives. Reputable brokers like Zest Car Rental are transparent about deposit levels, allowing you to choose a provider with a more reasonable deposit policy. Although you'll pay for any damage upfront with third-party insurance and then claim it back, the substantial savings and superior cover make this a worthwhile trade-off.
Can I use third-party insurance with Europcar, Avis, etc.?
Absolutely, yes – and you should. Car hire companies are legally obliged to accept your third-party excess insurance. They cannot force you to buy their own policy. Opting for a top-rated ERI policy from a specialist insurer is nearly always more cost-effective and provides broader coverage compared to the policies offered directly by rental firms like Europcar, Avis, or Budget.
How to avoid the car hire insurance hard sell?
Car hire companies can be notoriously pushy when it comes to selling their expensive insurance. They might employ scare tactics, implying your online-bought specialist insurance isn't valid, or that you won't be fully covered. This pressure-selling is illegal. To counter it, simply state firmly that you do not require any additional cover as you have your own independent excess reimbursement policy. You can explain that you understand your liability up to the excess limit should damage occur, secure in the knowledge that your ERI policy will reimburse you. While some suggest printing out your policy, this can sometimes open the door to agents trying to find non-existent loopholes; often, a polite but firm refusal is the most effective approach.
Is it cheaper to buy car hire insurance in advance?
Yes, buying your car hire excess insurance in advance is almost always cheaper than waiting until you arrive at the rental desk. Purchasing online gives you the time to research, compare policies, and select a reputable provider that offers fair prices and comprehensive coverage. The convenience and lower cost of an independent ERI policy bought ahead of time far outweigh the last-minute, inflated prices and limited cover typically offered by car hire companies on the day of collection.
By following these guidelines and opting for specialist excess cover, you can protect yourself from unexpected costs and enjoy your rental experience with genuine peace of mind, knowing you've secured the best deal and the most comprehensive protection available.
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