24/06/2024
Planning your next holiday often involves the convenience of hiring a car to explore your destination. However, navigating the world of car hire insurance can be a perplexing and often expensive part of the process. Many travellers find themselves cornered at the rental desk, pressured into buying overpriced and often inadequate cover. Our extensive research consistently shows that the best car hire insurance, particularly for excess cover, can be up to ten times cheaper when purchased independently from a specialist provider, rather than directly from the car rental firm. This guide will reveal why you should never buy car hire insurance from your rental provider and how to secure comprehensive, affordable protection for your peace of mind.
- The Costly Mistake of Rental Desk Insurance
- Understanding Car Hire Excess: What Happens If You Damage a Rental Car?
- What is Car Hire Excess Insurance (ERI)?
- Your Options for Car Hire Excess Cover
- Top-Rated Specialist Car Hire Excess Insurance Providers
- Car Hire Insurance from Brokers: A Mixed Bag
- The Pitfalls of Super Collision Damage Waiver (SCDW) from Rental Companies
- Expert Advice: Why Say No to Rental Desk Insurance
- Navigating the Hard Sell: How to Avoid Pressure Tactics
- Frequently Asked Questions About Car Hire Insurance
- Conclusion: Secure Your Savings and Peace of Mind
The Costly Mistake of Rental Desk Insurance
One of the biggest financial traps for holidaymakers is the insurance offered by car hire companies. Time and again, our investigations reveal that the cover provided at the rental desk is not only riddled with exclusions but also comes at an exorbitant price. While it might seem convenient to add insurance when you pick up the car, this seemingly simple choice can cost you hundreds of pounds more for a week's rental compared to specialist insurance bought online. For instance, reputable consumer analysis has found that major rental firms like Avis, Budget, and Europcar offer mediocre cover that pales in comparison to the value and comprehensiveness of independent policies.
Our latest research reaffirms this stark reality: online specialists consistently deliver superior cover at a fraction of the cost. We've delved deep into the policies of numerous providers, from dedicated insurance firms to brokers like Booking.com and Holiday Extras, to bring you the definitive guide on where to find the best car hire excess insurance policy.
Understanding Car Hire Excess: What Happens If You Damage a Rental Car?
It's a common misconception, often perpetuated by rental desk agents, that you'll be solely responsible for all costs if your hired car is damaged or stolen. While this isn't entirely true, understanding the concept of 'excess' is crucial. When you hire a car, especially within Europe, basic insurance (known as Collision Damage Waiver or CDW) is typically included in your rental agreement. However, this basic cover comes with an 'excess' amount. This means that if the car incurs damage, regardless of who is at fault, you are liable to pay a contribution towards the repair costs, up to a specified limit. This excess can be surprisingly high, often reaching up to £2,500.
The cost of car hire repairs has significantly increased in recent years, making this excess a substantial financial risk. Data from industry experts highlights that even minor issues can lead to hefty charges. For example:
- A scratched door: Around €250
- A tyre puncture: Around €300
- A replacement windscreen: Up to €750
These figures demonstrate how quickly even a small mishap can turn into a significant out-of-pocket expense if you're not adequately covered. It's important to note that the situation for car hire insurance can differ in North America (USA and Canada), so it's always wise to consult specific guides for those regions if you're travelling there.
What is Car Hire Excess Insurance (ERI)?
Car hire excess insurance, also known as an Excess Reimbursement Insurance (ERI) policy, is designed to protect you from the financial burden of the excess. If your rental car is damaged or stolen, and you have to pay the excess to the rental company, your ERI policy allows you to claim that amount back from your insurance provider. This is the smart way to ensure you're fully protected without paying over the odds.
While car hire providers may offer their version of this, typically called a 'Damage Waiver' or 'Super Collision Damage Waiver (SCDW)', these are almost always more expensive and offer inferior cover compared to an annual or daily ERI policy purchased independently. If you're planning to rent a high-value or larger-than-average vehicle, pay close attention to the 'max value' column when comparing ERI policies. Modern cars have escalating values, and some pricier models might exceed lower value thresholds, potentially leaving you underinsured.
Your Options for Car Hire Excess Cover
When it comes to buying car hire insurance to cover the excess, you generally have three main options. We strongly recommend the first two:
- Buy from a Specialist 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 buy them online before your trip. The process involves paying the excess to the rental company upfront if damage occurs, and then claiming it back from your ERI provider.
- Buy from a Car Hire Broker: When booking your rental car through a broker (like Expedia or Holiday Extras), you'll often be offered their own ERI policies. While many offer poor cover, a select few score well in terms of value and comprehensiveness.
- Buy from the Car Rental Company: This option, often presented as a 'Damage Waiver' or 'Super Collision Damage Waiver (SCDW)', is purchased either when you book or at the rental desk. While it reduces the excess (sometimes to zero), it is consistently overpriced and offers comparatively poor cover. This is the option we advise avoiding.
Top-Rated Specialist Car Hire Excess Insurance Providers
Based on rigorous analysis, specialist insurers offer the most robust and cost-effective ERI policies. Here's a comparison of some of the best providers:
| ERI from Insurance Specialists | Policy Score | Price for a Week (Spain) | Price for Annual Policy (Europe) | Policy Limit per Claim | Max Value of Car | Tyres (T), Windscreen (W), Underbody (U), Mirrors (M), Locks (L), Roof (R) Cover | Misfuelling | Key Cover | Towing | Personal Belongings | Curtailment | Drop Off Charges |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cover4rentals GOLD (Best Buy) | 80% | £16 | £38 | £10,000 | £65,000 | Yes | £1,000 | £750 | £1,000 | £500 | Yes | Yes |
| Worldwide Insure DELUXE (Best Buy) | 80% | £24 | £55 | £50,000 | £50,000 | Yes | £500 | £500 | £500 | £300 | Yes | Yes |
| CHEW Insurance (Best Buy) | 79% | £27 | £37 | £10,000 | £60,000 | Yes | £1,000 | £500 | £1,000 | £500 | Yes | Yes |
| Reduce my excess (Best Buy) | 78% | £20 | £45 | £10,000 | £65,000 | Yes | £500 | £500 | £1,000 | £300 | Yes | Yes |
| Questor Insurance | 77% | £28 | £45 | £10,000 | £100,000 | 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 |
Note: [a] Available as an optional extra. Prices checked in May 2024 and are subject to change. Policy scores are an assessment of quality across 17 categories. Prices are based on a 45-year-old single man for standard European cover.
Understanding the Table Terms:
- Misfuelling: Covers costs if you use the wrong fuel.
- Key Cover: Costs associated with lost or stolen keys.
- Towing: Costs for a tow truck after an accident or breakdown.
- Curtailment: Provides benefit if your hire agreement is cut short.
- Drop Off Charges: Costs of returning the car if you are unable to.
Car Hire Insurance from Brokers: A Mixed Bag
Many travellers book their hire cars via brokers such as Expedia or Holiday Extras. When selecting a car, you're often presented with options like 'no extra insurance' or 'full protection insurance'. If you opt for the 'full insurance', you're essentially purchasing an ERI policy, similar to those from specialist insurers, with an average cost of around £38.
Our analysis of policies from six major brokers reveals a significant variation in quality:
| ERI from Car Hire Brokers | Policy Score | Price for a Week (Spain) | Policy Limit per Claim | Tyres (T), Windscreen (W), Underbody (U), Mirrors (M), Locks (L), Roof (R) Cover | Misfuelling | Key Cover | Towing | Personal Belongings | Curtailment | Drop Off Charges |
|---|---|---|---|---|---|---|---|---|---|---|
| Booking.com/Rentalcars.com | 83% | £47 | £20,000 | Yes | Full value | Full value | Full value | £0 | Yes | No |
| Zest Car Rental Top Up Insurance | 75% | £35 | £10,000 | Yes | £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 | Yes | £0 | £200 | £3,500 | £0 | Yes | No |
| Wisecars | 52% | £42 | £1,000 | T, W, U, M, R | £0 | [b] | £1,000 | £0 | Yes | No |
Note: [a] Available as an optional extra. [b] Company did not confirm value. Prices checked in May 2024 and are subject to change. Policy scores are an assessment of quality across 17 categories. Prices are based on a 45-year-old single man renting the smallest vehicle available in Malaga, Spain.
Booking.com/Rentalcars.com's policy scored highest among brokers. However, if you're renting with the Which? Recommended Provider Zest Car Rental, basic ERI is often included. Spending a little extra on their top-up insurance can provide one of the most comprehensive policies available. The only scenario where Zest's top-up might not be the absolute best choice is if you plan to hire more than one car a year; in that case, an annual policy from specialist providers like Cover4rentals (Gold) or Worldwide Insure (Deluxe) could be cheaper and better-rated.
The Pitfalls of Super Collision Damage Waiver (SCDW) from Rental Companies
Car hire companies aggressively sell what they call Super Collision Damage Waiver (SCDW), or other variations like Collision Damage Waiver (CDW), Excess Waiver, Super Cover, or Excess Protection. These policies aim to reduce your excess to a very low amount, often zero. However, they come at a significant premium and offer surprisingly limited cover. Our research consistently shows that purchasing insurance directly from the car hire provider is simply not worth it.
Here’s how SCDW policies from major rental companies stack up:
| SCDW from Your Car Hire Provider | Policy Score | Price for a Week (Spain) | Tyres (T), Windscreen (W), Underbody (U), Mirrors (M), Locks (L), Roof (R) Cover | Misfuelling | Key Cover | Towing | Personal Belongings | Curtailment | Drop Off Charges |
|---|---|---|---|---|---|---|---|---|---|
| Europcar | 55% | £190 | Yes | £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 | [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 |
Note: [a] Available as an optional extra. [b] Company did not confirm value. Prices checked in May 2024 and are subject to change. Policy scores are an assessment of quality. Prices are based on a 45-year-old driver, renting the smallest car with the most comprehensive SCDW for one week from Malaga airport in July 2024.
As the table clearly shows, these policies are significantly more expensive than specialist third-party options. Furthermore, they offer less comprehensive cover. While most top ERI providers cover damage to windscreens, tyres, and the underbody of the car, and often include misfuelling, lost keys, and curtailment, rental company SCDW policies frequently exclude these crucial elements or offer them only as costly optional extras.
Expert Advice: Why Say No to Rental Desk Insurance
Guy Hobbs, a leading car hire expert, unequivocally states: "No. The insurance sold by car hire companies is overpriced and offers inferior cover."
While some travellers prefer to buy insurance from the rental company to avoid leaving a large deposit or pre-authorisation on their credit card, there are solutions. Which? Recommended Provider Zest Car Rental, for instance, clearly displays the required deposit level, allowing you to choose a provider with a more reasonable deposit policy. It's true that if you opt for third-party insurance, you'll need to pay for any damage upfront and then claim it back. However, this is a small price to pay for the significantly better cover and significant savings that leave you hundreds of pounds better off.
In Europe, basic insurance is always included in your rental. You are not obliged to buy any additional insurance from the rental company. Despite this, some car hire companies employ aggressive pressure-selling tactics to push their policies. They might attempt to frighten you into a purchase, or even claim they won't accept the specialist insurance you've already bought online. Such pressure-selling is illegal.
To confidently resist these tactics, our advice is simple: purchase your own Excess Reimbursement Insurance policy from a reputable third-party provider in advance. Then, when you're at the rental desk, simply and firmly say no to any extra cover. Explain that you understand your responsibility for the excess limit if the car is damaged, secure in the knowledge that your ERI policy will reimburse you. While some people like to print out their ERI policy to show the rental company, we've found this can sometimes open the door for agents to (very convincingly) pick holes in your policy that don't actually exist. A firm but polite 'no thank you' is often the most effective approach.
Frequently Asked Questions About Car Hire Insurance
Is it cheaper to buy car hire insurance in advance?
Yes, absolutely. Buying your car hire insurance in advance, rather than waiting until you arrive at the rental desk, is almost always cheaper. This not only gives you ample time to research and select a reputable provider with fair prices but also ensures you benefit from the superior value and comprehensiveness of an independent ERI policy compared to the often inflated offerings from car hire companies on the day of collection.
Do I need full protection on car hire?
Car hire companies may offer, or even pressure you into buying, a 'full protection' policy, claiming it provides better protection than a third-party insurer. However, you have every right to refuse this and instead opt for a robust ERI policy from a third-party specialist. As discussed, these specialist policies often provide more comprehensive cover for less money, despite not being branded as 'full protection' by the rental company themselves.
Can I use third-party insurance with Europcar, Avis, etc.?
Yes, you can – and indeed, you should. Buying insurance from the car hire company is typically more costly and offers inferior protection, making your car hire a potential rip-off. Instead, as highlighted throughout this guide, always opt for a top-rated car hire insurance policy from a reputable third-party provider to ensure you get the best cover at the best price.
Conclusion: Secure Your Savings and Peace of Mind
The evidence is clear: purchasing car hire excess insurance from a specialist third-party provider offers vastly superior value and cover compared to the policies sold directly by car rental companies. By investing a little time to secure an independent Excess Reimbursement Insurance (ERI) policy before you travel, you can protect yourself from potentially crippling excess charges and avoid the unnecessary expense of rental desk hard sells. Don't let your holiday budget be swallowed by overpriced insurance; choose wisely, save money, and enjoy your journey with complete peace of mind.
If you want to read more articles similar to Car Hire Insurance: Avoid Rental Desk Rip-offs!, you can visit the Insurance category.