Hiring a car on your next trip? Compare your options for rental vehicle excess cover through travel insurance and avoid paying more at the rental counter.
the benefits
Car hire excesses typically range from $2,000 to $8,000 depending on the vehicle – a significant out-of-pocket cost if something goes wrong. Most comprehensive travel insurance policies include rental vehicle excess cover as a standard feature, meaning that if your hire car is damaged, stolen, or involved in an accident, you can claim the excess back through your travel insurer rather than paying to reduce it at the rental counter.
Rental car companies charge an extra daily fee (often $25 to $40 per day) to reduce your excess at the counter, which can nearly double the cost of your hire. Most comprehensive travel insurance policies include rental vehicle excess cover at no additional charge, making it one of the most cost-effective ways to protect yourself against this risk.
Car hire excess cover under most travel insurance policies extends beyond standard rental cars to include campervans and motorhomes, provided the vehicle is hired from a licensed rental company and does not exceed 4.5 tonnes. This makes it a particularly useful benefit for road trip travellers exploring New Zealand or overseas.
If you’re involved in an accident and you’re suddenly found medically unfit to drive, most policies will also cover the cost of returning your rental vehicle to the nearest depot (typically up to $500) along with any medical expenses arising from the incident itself. This combination of benefits means a single travel insurance policy can cover multiple costs arising from the same event.
Unlike standalone car hire excess policies, comprehensive travel insurance also covers medical expenses, trip cancellations, luggage, and travel delays – providing far broader protection for the cost of a single policy. If you’re already purchasing travel insurance for your trip, rental vehicle excess cover is typically included at no extra cost.
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Key Considerations
There are three main ways to cover your rental vehicle excess, and the right option depends on your circumstances. Travel insurance with rental excess cover is typically the best value for travellers already purchasing a policy for their trip, as it combines excess cover with medical, cancellation, and luggage protection at no additional cost. Standalone car hire excess policies are purpose-built for excess cover and often include additional inclusions (such as windscreen, tyre, and underbody damage) that travel insurance and credit card policies exclude. Credit card cover may be available on premium cards but comes with more restrictions and is rarely as comprehensive as the other two options.
Car hire excess cover under a travel insurance policy mirrors the terms of your rental agreement – meaning any exclusions in the rental agreement also apply to your excess cover. This is an important distinction: if windscreens, tyres, roofs, or underbody damage are excluded under your rental agreement, they will also be excluded under your travel insurance excess cover. Standalone policies often provide broader cover in this regard, specifically including these items. Always read both your rental agreement and your insurance policy carefully before driving away.
Under a travel insurance policy, all drivers who will be operating the hire car must be listed on the policy for the cover to apply. If an unlisted driver is behind the wheel at the time of an incident, the excess claim is likely to be rejected. Standalone car hire excess policies typically cover all drivers listed on the rental agreement, making them a more straightforward option for groups or families travelling together.
If you’re hiring a car within New Zealand for a domestic trip, be aware that many travel insurance policies only cover rental vehicle excess if you travel beyond a certain distance from home – typically 50 kilometres or more. Standalone car hire excess policies generally do not apply distance restrictions for domestic journeys, making them a better option if you’re hiring a car close to home.
Rental vehicle excess cover under travel insurance applies to cars, campervans, and motorhomes hired from licensed rental companies, but does not typically extend to motorbikes, scooters, moving vans, or car-sharing services. If you’re planning to hire a vehicle that falls outside the standard definition of a rental car, check the specific definition in your policy rather than assuming you’re covered.
If you’re involved in an accident, your rental company will typically charge the excess amount to your credit card directly. You would then submit a claim to your travel insurer for reimbursement, providing supporting documentation including a copy of your rental agreement, a police or accident report if applicable, and receipts or invoices showing the amount charged. Most insurers offer an online claims portal for convenience. Keep copies of all relevant documents throughout your hire period in case they are needed.
further reading
Expert guides to help you make an informed decision about your travel cover.
Missed a flight? Find out exactly when travel insurance covers it, what's excluded, and how to claim, plus tips to avoid missing your next flight.
Read full guideget answers
No, if your travel insurance policy includes rental vehicle excess cover, you do not need to pay the rental company’s daily fee to reduce your excess. Your travel insurance will cover the excess you would otherwise be liable for in the event of an accident, damage, or theft. That said, always confirm that your policy includes this benefit and check the excess limits before declining the rental company’s cover at the counter.
This depends on your type of cover. Travel insurance policies mirror the terms of your rental agreement, so if windscreens, tyres, roofs, or underbody damage are excluded under that agreement, they will also be excluded under your travel insurance excess cover. Standalone car hire excess policies often specifically include these items, which is one of their key advantages over travel insurance for this type of cover. Always check the specific inclusions of your policy before driving away.
This depends on your specific circumstances. If you’re already purchasing travel insurance for your trip, rental vehicle excess cover is typically included at no additional cost, making it the most cost-effective option. If you only need excess cover and no other travel insurance benefits, a standalone policy may be more cost-effective. Compare the total cost and inclusions of both options against your needs before deciding.
Under a travel insurance policy, yes, all drivers who will be operating the hire car must be listed on the policy for the cover to apply. Under a standalone car hire excess policy, all drivers listed on the rental agreement are typically covered, regardless of how many people there are. If you’re travelling with others who will share the driving, this is an important distinction to factor into your choice of cover.
Campervans and motorhomes hired from a licensed rental company are covered under most travel insurance policies and standalone excess policies, provided the vehicle does not exceed 4.5 tonnes. Motorbikes and scooters are generally not considered rental vehicles under travel insurance definitions and are therefore not covered for excess under a standard policy. Moving vans and car-sharing vehicles are also typically excluded.
If your rental car is damaged or involved in an accident, the rental company will typically charge the excess amount to your credit card. You would then submit a reimbursement claim to your travel insurer, providing a copy of your rental agreement, any police or accident report, and receipts or repair invoices showing the amount charged. Most insurers now offer an online claims portal for ease of submission. It’s important to retain all documentation throughout your hire period and to notify your insurer as soon as possible after any incident.
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