Insurance and Excess Reduction
When it comes to insurance, standard liability and excess liability reduction, these are optional and not compulsory, you have a choice.
Here are a few options you can consider when you travel in a rental car.
Option 1: Purchase Excess Reduction at the Rental Desk
All rental companies provide options to reduce your excess liability and charged on a daily basis. These can be purchased at the rental counter when you are collecting your vehicle.
Advantages:
- Purchase can be made when collecting your rental vehicle
- No delay in waiting for refund from insurance company
Disadvantages:
- Cost - Higher premium that other options
- Not insurance cover - Excess Reduction, Collision Damage Waiver or Loss Damage Waiver is not actually insurance cover. It is a fee paid directly to the car rental provider for them to charge your credit card a reduced excess or nil excess in the event of an accident
- Exclusions - these products often exclude cover on areas such as:
- Single Vehicle Accidents
- The Vehicle's Under-Carriage
- Tires
- Windscreen
Summary
Excess liability is reduced to an agreed amount or to $0 with daily cost ranging from $22 to $50 depending upon rental company and type of vehicle hired (excluding any local taxes and applicable surcharges).
Option 2: Take No Option
All rental companies have standard insurance covering their vehicles and it is not a legal requirement to take out additional cover or reduce your liability. You can choose to rent and drive a car on the vehicle supplier's standard insurance policy and will be covered for damage to third party property and vehicles. However you will be liable for all costs up to the amount stated on the vehicle supplier's rental agreement.
Advantages:
- Cost - No payment of insurance cover or excess reduction fees
- Car rental companies usually have blanket insurance policies that cover their vehicle fleet. These policies cover damage incurred to third party property and vehicles above the excess amount they charge you the customer
- Choice - Opting to reduce your risk by purchasing Rental Vehicle Excess Insurance or Collision Damage Waiver from an insurance company or rental supplier is entirely your choice. There is no legal obligation.
Disadvantages:
- Cost - In the event of any accident, suppliers will immediately charge your credit card a maximum damage excess fee of between $3,000 and $8,250 depending on the car type and supplier. Once repairs have been made they will reimburse you the difference should the damage costs be less than the paid maximum excess fee
- No Recourse - You will have no further recourse other than to pay the full amount of the damage up to the excess amount
Summary
No Excess reduction costs are incurred however you are liable up to $8250 in the event of an accident depending upon the vehicle type and rental provider.
Some credit cards when used to pay for rental vehicles include excess insurance cover. Likewise some travel insurance policies can offer this option. In either case check with your provider and read their terms and conditions to ensure you fully understand the cover they offer and any limitations or exclusions.
Option 3: Take Insurance Cover with Prosura
Prosura is an alternative and independent option to the excess reduction products sold directly by the car rental companies.
Prosura RVE Travel Insurance is reimbursement cover for your rental vehicle excess and related expenses when hiring a rental car that is damaged or stolen during your rental. Prosura offers a comprehensive cover with reimbursement of up to $10,000.00 AUD or NZD, which includes;
- For drivers of any age
- All nominated drivers
- Single vehicle accidents
- Excess reimbursement
- Damage to underbody, overhead, windscreen, tyres, bumper, trim, mirrors and glass are reimbursable
- Vehicle key loss
- Stolen vehicle
- Roadside assistance, repairs and towing
- Misfuelling
Once you have your insurance policy with Prosura, you can collect your vehicle without purchasing additional protection products offered from the rental car provider.