Travel Insurance or Excess Reduction?
There are a lot of options when it comes to car rental insurance and excess reduction. Even if you have rented a car before, it can still be difficult to work out the inclusions, exclusions, and whether you are purchasing a product that is right for you. Here are a few features of travel insurance, and excess reduction products, to help you make an informed decision.
Travel Insurance or Credit Card Insurance
Travel Insurance is purchased before a trip. It often provides cover for overseas medical and dental expenses, as well as providing cover for travel delays, luggage and cancellation. Many travel insurance policies also include a specified amount of coverage for rental vehicle excess.
- Your travel insurance policy may not cover you for the full amount of the rental vehicle's excess. Policies often have a maximum amount you can claim for charges related to car rental, and in some cases this amount may be lower than the excess on the vehicle.
- If you do make a claim through your travel insurance, you will still have to pay the total damage fee at the rental counter, and seek reimbursement afterwards.
- It is important to check who is covered on your travel insurance policy. If you are travelling with additional drivers they will also need to be covered by a travel insurance policy in case any damage is caused to the vehicle while they are driving.
- There may be exclusions related to vehicle types such as 4WD and campervans.
- If you are relying on your credit card insurance, it is important to carefully check the terms and conditions and check the coverage of pre-existing conditions before you pick up your rental car. There can often be delays in getting reimbursement, and "loss of use" is generally not included.
- Credit card insurance is free if you are using the card to book the rental car and adhering to all the terms and conditions. Some credit card companies do offer a high amount of coverage.
- If you book your insurance through a company specializing in rental car insurance, you will also benefit from specialized knowledge and assistance with any questions you may have.
Excess Reduction purchased directly from car rental company
Car rental companies offer excess reduction products, which customers can purchase directly at the counter. These products can reduce the amount of money a customer will be liable to pay in the event of any damage.
- Through the car rental company, you can reduce your excess amount to zero, and providing you do not break any of the terms and conditions of the rental agreement, you will not be liable to pay any damage fees.
- Purchasing excess reduction products can often be more expensive than travel insurance policies.
- In some cases you may not have the option to reduce the excess on certain kinds of vehicles, such as prestige.
- There is no waiting period for reimbursement as purchasing the car rental company's excess reduction product means you do not have to pay the damage charges at the end of the rental.
- If you are purchasing excess reduction or collision damage waiver products, make sure you read the terms of conditions. Some kinds of damage such as tyres and underbody may be excluded.
Which option is best for you?
Ultimately, the decision to purchase rental car insurance in Australia depends on what product best suits your requirements. Note that the purchase of travel insurance or excess reduction products are optional, but if any damage is caused to the vehicle while it is in your possession you will be liable to pay up to the full excess amount. In Australia, this excess amount can be more than $8,000 for certain kinds of vehicles.
No matter which option you choose, make sure you understand the terms and conditions, and know what you are covered for. It is important to check inclusions and exclusions, and find a product that covers you for the duration of your rental.
Read more about your options to insure your rental vehicle here.