What’s the difference between car hire excess insurance and damage refund insurance?

Finding the best deal on a hire car is not just about choosing the lowest price. It is also important to understand any optional extras or charges that could increase the total cost.

One extra cost to consider is car hire insurance. In this article, we take a closer look at car hire excess insurance and damage refund insurance.

Car hire excess insurance

In car insurance, the excess is the amount you may need to pay toward a claim. Some policies allow you to reduce the excess, although this may increase the cost of the policy. Car hire excess insurance is designed to help cover that cost and may also offer additional protection, depending on the policy terms.

What does car hire excess insurance cover?

When you hire a car, you will usually receive Collision Damage Waiver (CDW) cover or third-party liability insurance as standard. Although this level of car hire insurance will cover you in many situations, it can still leave you liable to pay the first part of any claim, which is known as the excess.

This excess can vary from one car hire insurance policy to another. It is often worth checking the amount before you book, so you understand what you may need to pay if the car is damaged.

Some excess insurance also covers parts of the car that are often not included in standard car hire insurance policies. This can include the tyres, wheels, roof, windscreen, and undercarriage.

Buying car hire excess insurance

Some companies offer excess insurance at the desk when you pick up your rental car. Another option is to buy excess waiver cover as a standalone policy before you travel.

Before buying, compare the policy terms carefully so you understand the level of cover, any exclusions, and how claims are handled.

Car hire damage refund insurance

Car hire damage refund insurance is similar to excess waiver cover, but it works in a slightly different way. When you rent a hire car, the car hire company may ask for a deposit to cover the value of the excess. If the vehicle is damaged during the rental, they may use that deposit to pay the excess.

By taking out damage refund insurance on your car hire, you may be able to reclaim that cost by presenting your insurance company with:

1. evidence of the payment being taken, such as a credit card statement or copy of the invoice
2. copies of damage reports, such as a check-out report from the car hire company that details the damage to the vehicle
3. a copy of the supplier accident form, completed before the rental is over

Buying damage refund insurance for your car hire

The cost of damage refund insurance can depend on the excess on your car hire policy and the level of cover included. Before you buy, check what is covered, what documents are needed to make a claim, and whether any exclusions apply.