Car hire companies are charging up to £27 per day for insurance, compared to the £2 per day charged by specialist insurance companies, Which? Travel can reveal.
A comparison of costs for a week’s car rental in Spain found that insurance with Europcar would cost an extra £187. Yet standalone excess reimbursement policies with companies, such as Big Blue and carhireexcess.com, total as little as £15 for the same period, or around £40 for an entire year’s cover.
Not only are standalone policies cheaper, but they often offer better cover. For example, all of the specialist car hire excess insurance policies we examined covered tyres, windscreen and undercarriage. Yet big-name car hire companies, such as Budget, Hertz and Sixt, do not always cover these parts of the car.
Which? Travel has analysed policies from 11 leading specialist insurers including icarhireinsurance.com, Questor and Insurance4carhire.com to find out which offer the best cover for your next break.
Best and worst car hire excess insurance
On the face of it the policies offered by different insurance companies look very similar, but when we analysed them across 15 different categories, we found major differences.
While the best policy scored an excellent 84%, the policy from CarTrawler, which provides airline customers with add-on car hire, scored a woeful 37%.
CarTrawler’s policy also offers a limit per claim of just £2,500, whereas some other insurers will pay out on claims up to £10,000.
We also found a number of insurance companies that do not provide cover for lost keys, a flat battery, personal effects and interior damage. But the best-rated insurance policy covered all of these.
Car hire excess insurance explained
When you hire a car, it usually comes with basic insurance included in the price so that you won’t have to pay the full cost of replacing a stolen or damaged vehicle.
But the basic insurance is subject to an ‘excess’ meaning that you could have to pay a contribution of up to £2,000 towards repair or theft costs, regardless of who is at fault.
You have two options to reduce this liability. You can buy insurance at the car rental desk that reduces the excess – often called Super Collision Damage Waiver. Or you can buy Excess Reimbursement Insurance (ERI) from another company online, before you travel.
Buying a third-party ERI policy is always cheaper and often far more comprehensive, but it does have some disadvantages. With ERI you will have to allow the car hire company to pre-authorise a sum (usually equal to the excess) on your credit card. If there is any damage, you will then lose that deposit and have to claim it back on your insurance.
Some of the worst car hire companies set the credit card pre-authorisation amount as high as possible, to try to persuade you to buy its own overpriced insurance.