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Updated: 10 Jan 2022

Car hire insurance

We've reviewed car hire excess insurance policies, to help you decide which one to buy, plus we tell you how to decode car hire insurance jargon and avoid the rip offs
GH
Guy Hobbs
Car hire insurance_1 440351

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:

  1. Buy insurance from a standalone insurance company. This is our recommended option as it's cheaper and offers more comprehensive cover. This type of insurance is called Excess Reimbursement Insurance (ERI) and can be purchased online, in advance of your trip. If there is any damage, you will have to pay the excess to the car hire company, but you will then be able to claim it back. See our car hire excess insurance reviews below.
  2. Buy insurance from the company renting you the car. This is usually called Super Collision Damage Waiver (SCDW) and can be purchased at the rental desk. SCDW reduces the excess (often down to zero) that you will have to pay in the event of damage. It is almost always over-priced and offers comparatively poor cover.

Best car hire excess insurance

Many people choose to buy an excess insurance (ERI) policy from a third party insurer. This is normally far cheaper, and often more comprehensive than the cover offered by car hire companies, for example covering damage to windscreens and tyres.

You can buy a daily or annual policy. But which of the many third party ERI policies should you buy? Our table rates the best and worst policies available. We've provided links to those companies with a score of 70% or higher.

Car hire excess insurance policy reviews
InsurerPolicy score1 week premium (Spain)Premium for annual policy (Europe)Annual policy trip lengthPolicy limit per claimTyres, windscreen and underbody coverMisfuelling coverKey cover
Questor insurance82%£23.92£67.4762 days 1£10,000Yes£500£500
ChewInsurance79%£14.10£41.9965 days 1£7,500Yes£1,000£500
Insurance4carhire.com79%£35.74£46.9960 days£6,500Yes£500£500
Reducemyexcess.co.uk78%£19.37£47.6962 days 1£7,000Yes£500£500
Insurefor77%£24.19£56.5431 days£10,000Yes£500£500
Eversure75%£19.92£48.9962 days 1£7,000Yes£500£500

Super Collision Damage Waiver

Car hire companies sell SCDW, allowing you to reduce your excess to a very small amount, often zero. This cover has many different names, including Excess Waiver, Super Cover and Excess Protection. But it’s expensive. 

Our table below shows quotes we obtained from a selection of major car hire companies. The SCDW covers a week’s rental in Spain. We got quotes for the most comprehensive policy available. 

Our research shows it's just not worth buying your insurance from the car hire provider. Not only does SCDW cost £89 more on average than third party cover, but it also offers less comprehensive cover.

All of the top ERI providers cover you for damage to the windscreen, tyres and underbody of the car. They also cover you if you're locked out, put the wrong fuel in the car, or are forced to cut short your hire. None of the car-hire companies cover all of this.

The only real advantage of paying the car hire company for SCDW is that the company will not require a large pre-authorisation on your credit card. Pre-authorisations can be as high as €2,500 with some of the budget operators.

SCDW - purchased from car hire companies to reduce your excess
Car hire companyPolicy scoreSCDW cost for a weekPolicy limit per claimTyres (T), windscreen (W) and underbody (U) coverLocked out coverMisfuelling coverKey coverStolen personal effectsCurtailment
Avis - Super cover61%£119.53Full valueT&U / W optionalYesNot coveredYesNot coveredNot covered
Budget - Super cover61%£119.53Full valueT&U / W optionalYesNot coveredYesNot coveredNot covered
Europcar - Premium Protection Cover60%£202.88Full valueT,W&UNot coveredNot coveredNot coveredYesNot covered
Alamo - Excess Protection60%£133.95Full valueW / T&U optionalOptionalNot coveredOptionalOptionalNot covered
Enterprise - Excess Protection60%£115.26Full valueW / T&U optionalOptionalNot coveredOptionalOptionalNot covered
Goldcar - Mega Relax Cover58%£154.19Full valueT,W&UYes£500YesNot coveredNot covered

How we rate policy stores

We calculated the policy scores by rating the 16 most important elements of the policy, including tyres, windscreen and underbody cover, flat battery cover, admin charges, car jacking, towing cover, personal accident cover and more.

Car hire insurance jargon buster

Car hire customers are regularly falling foul of unexpected and unclear contract terms.

Here are some of the commonly used terms relating to car hire insurance.

You can also see which companies are best at explaining these extra charges in our car hire company comparison.

Collision damage waiver (CDW)

CDW insurance, providing cover in the event of damage or theft of the vehicle, is usually included as standard if you are hiring a car in Europe or Australasia. In the USA it may have to be purchased separately. 

However, CDW is not complete protection. All it means is that you will not have to pay the full cost of any repairs, but you will have to pay a contribution to repair costs up to an agreed level of 'excess' which can be as high as £2,000, regardless of who is at fault.

In addition, CDW generally does not cover certain areas of the car, such as the windscreen, tyres and the undercarriage. You will not usually be covered for damage caused while you were breaching the rental agreement, or caused by negligence or using the wrong fuel.

You will not usually be covered for damage caused while you were breaching the rental agreement, or caused by negligence or using the wrong fuel.

Theft protection (TP)

This covers you against the full cost of replacing the vehicle if it is stolen while in your possession. Like CDW, this insurance is normally included in the price, and like CDW it does not cover everything.

For example thefts as a result of negligence, such as leaving the car keys in the ignition, will not be covered. And there will still be an excess to pay.

Personal accident insurance (PAI)

You may also be offered extra cover for any injury to you or passengers while you are driving the car. However, this would normally be covered by your travel insurance.

In the same way, you may be offered cover for personal belongings in the car. This is known as personal effects protection (PEP). Again, this may be covered by your travel or home insurance.