What is car hire excess insurance and is it required?
When you arrive at the car hire front desk, they’ll often try and sell you a “Damage Waiver”, or “Super Collision Damage Waiver” (SCDW) which is an optional insurance policy that protects you against any excess charges you may incur in the event your hire car is damaged or stolen.
It’s known generally as ‘excess insurance’ because the SCDW reduces the excess (often to zero) if something does happen to your car during your rental.
There’s nothing wrong with this – it’s recommended to have it! – the issue comes with the hugely inflated prices that many hire companies command for it.
Car hire companies will often charge you a lot more for excess insurance versus you organising it for yourself
Excess Reimbursement Insurance (ERI) – the cheaper alternative
The good news is that you don’t have to buy excess insurance from your rental company – you can sort it out yourself!
Not only is this cheaper, there’s a good chance that your policy may be more comprehensive, or at least more suited to your specific trip.
If the car gets damaged, you will have to pay the excess to the hire company but then you claim it back.
How much does car hire excess insurance cost?
A lot less than from the rental company! In the past, we’ve paid around £12 for a few days, and we’ve also paid around £35 for an annual policy too! But your prices will be based on your specific trip, vehicle and personal details.
If the car gets damaged or is stolen, who pays?
This is the big difference – as you’re opting to use third party insurance it’s likely your rental company is keeping a large hold on your credit card as a deposit against this sort of predicament.
Therefore, if your car does get damaged or stolen, they will continue to hold that money – and perhaps even charge it – and it’s then your job to contact your excess insurance provider to claim the money back. Some will sort this out directly with the rental company.
Now, I know this sounds a little scary since a hold can be around £2000, however it can be a really slick process as long as you go with a reputable insurance company – definitely check out the reviews of any potential companies on trustpilot and feefo.
We’ve listed some excess insurance comparison sites below whose customer service will also be able to answer any questions you have and advise you on the process.
We had a trip to Malaga this year, the car hire company (Record Go) wanted to charge us an additional £182.30 for their damage waiver for the week. We had excess insurance cover via our credit card (AmEx Platinum and Revolut Metal), but we could have also bought a week’s excess insurance from a third party for around £12.50 for a week.
The hire company placed a €2,000 hold on my credit card which was lifted 7 days after returning as we had no issues.
Spain, June 2022
What happens if you don't buy excess insurance?
If the car comes back with no issues, then nothing! However if it does get damaged or stolen, the car hire company will charge you accordingly, often taking this money from the amount held on your card that they took at pick up.
Find the best car hire excess insurance policy
There are a few sites that do a brilliant job of seeking out the best excess insurance policy for your needs.
Stand alone car hire excess insurance company.
“Whether you are going on holiday or a business trip, car hire insurance from us gives you the coverage you need. Our car hire excess and CDW/LDW policies offer comprehensive coverage at a competitive price compared to what you pay at the rental car desk!”
Car Hire Excess Insurance Top Tips
Check your rental companies accepts third party policies
Most do, but there are some that don’t and so check before you book – it’s often worth booking with a company that does even if the daily car rental costs more.
Don't let the front desk scare you!
As long as you’ve done your research and got a good excess car insurance policy, there’s no reason to be worried – even when the front desk really drills home large deposits and worst case scenarios. Some may even say they don’t accept third party insurance when they do! So try to check in advance.
This is because some staff earn a cut of this insurance which is often why they push it so hard! That, or it’s simply a big money maker for the company and so it will be a key part of their training to get a customer to buy it.
Set up the policy at least the day before you pickup the car
A lot of policies will not be accepted if you are hiring on the same day, so always buy it at least a day before you pick up your vehicle.
Read the terms of your car rental back to back
It’s sad to say that I always go into car rental agreements with the preset that they’re trying to rip me off in some way. It’s not always true, but it’s a good place to start as many companies do make their money from add ons and silly mistakes made by the customer.
So please read anything they send you, back to back, and check the terms and conditions for what you need.
Take a physical credit card in the driver's name
This is one that has caught us out before! Often companies will need a credit card in the name of the driver only – a passenger’s won’t do.
Also, many won’t accept virtual cards via Apple or Google Pay, and some don’t accept American Express Cards either.
Quick fixes in these instances are adding a driver of the person who does have a credit card (though that usually comes at a cost!) or by paying for it on a debit card though they’ll have to charge you a full deposit, rather than just take a hold on your credit card.
Use your phone to do a full 360° recording of your vehicle – interior and exterior – on collection and then at drop-off. Also take photos of the gas levels when you get in, and also once you’ve filled up along with the petrol receipt showing the date and time. Finally, if there is damage that has not been reported, make sure you do it ASAP and follow up with an email so there’s a paper trail. All of this means that if there is any dispute for either damage or the tank not being full, you’ll have the proof to help dismiss it.