More than a third (37%) of hire car drivers are unaware that they are liable for the excess (the first part of any claim) if their car is damaged or stolen, which can be up to £2,000, even if it is not their fault.

Excess waiver can be bought to protect drivers from this, however Opinium research of over 1,000 car hirers, commissioned by iCarhireinsurance.com, a leading provider of car hire excess insurance, finds that two fifths (41%) don’t know what excess waiver is and 43% say it is confusing and difficult to understand.

Six in ten car hirers (59%) are also unsure or mistakenly believe that excess cover has to be bought from the rental company.  According to a cost comparison study by iCarhireinsurance.com, travellers could be wasting over £200 a week not buying excess insurance from an independent insurance company.

For example, hiring a medium compact car, e.g., a VW Golf, in Malaga this summer from 29 July to 5 August 2023, the study finds the six rental companies (i.e, Sixt, Hertz, Avis, Budget, Enterprise and Europcar) surveyed charged on average £259 for excess cover (i.e., £201 for super damage waiver and £58 for tyre and windscreen waiver cover). A week’s policy from iCarhireinsurance.com covering damage, theft, and tyres and windscreen cover is £33.15 or an annual European policy is from £41.99.

If a car hirer does not buy excess cover from the rental company, or they have a car hire excess insurance policy already, then the rental company will hold the excess amount on the driver’s credit card. Over half of hire car drivers (56%) are unaware that rental company is within their rights to do this.

Drivers need to ensure they have enough credit on their credit card to allow rental companies to hold the excess in this way if they are buying cover from another provider, as the survey found that almost a third (30%) of car hirers bought excess waiver from the rental company rather than let them hold the excess amount on their credit card.

Ernesto Suarez, Founder and CEO of iCarhireinsurance said: “The majority of people hire a car without anything ever going wrong, but when it does you risk being liable for hundreds, if not thousands of pounds, so it pays to have excess cover. Do your research and consider looking at independent providers which can be a much more cost-effective option than the rental company’s waiver policies. Then don’t forget to take a credit card with you to cover the excess deposit during the hire.”

Beginner Guide to Car Hire Excess Insurance

• What is the risk? – If a hire car is damaged or stolen in Europe, the car is insured but the driver has to pay the excess (i.e., the first part of the claim) which can be more than £2000.
• Rental company excess waivers – Rental companies often sell three excess policies: super damage waiver, super theft waiver and tyre and windscreen excess. For example, the average combined cost of excess waivers for a week in Malaga this summer is £259. (see above)
• Independent car hire excess insurance is usually cheaper and more comprehensive – A policy from a specialist insurance provider, like iCarhireinsurance.com,  charges only £33.15* for a week’s policy, covering damage, theft, and tyres and windscreen cover. Annual European polices with iCarhireinsurance.com are from £41.99.
• Car rental companies do not have to approve the use of an independent excess policy – this is because they refund the customer, not the rental company.
• The excess amount will be held on your credit card – All customers that do not buy the rental company’s excess insurance, including those with independent excess insurance, will need to let the rental company hold the excess / or deposit during the rental. Some companies will only accept a credit card deposit, not debit or cash, so it is a good idea to have a spare credit card available with enough credit.  When the car is returned undamaged, the deposit is refunded.
• Make sure you’re not charged for existing damage on a car – Always check the hire car for damage before it is driven and ensure any damage is recorded on the check-out sheet. Use the ‘iCarhireinsurance’ app, free to all travellers, with SNAPs technology, to record photos taken on pick up, drop off, and in the event of an accident.
• What happens if you claim – with a standalone excess insurance policy, drivers pay the excess charges and then submit a claim for reimbursement to their insurer.