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Updated: 4 Aug 2022

Car hire insurance explained

We've reviewed car hire excess insurance policies, to help you decide which one to buy, plus we tell you how to avoid the insurance rip offs
Guy Hobbs

When you hire a car, it 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 £2,500 towards repair or theft costs, regardless of who is at fault. To make sure you don't have to pay through the nose, you need car hire insurance.

What car hire insurance do I need?

You have two options:

  1. Buy insurance from an insurance company. This is called Excess Reimbursement Insurance (ERI) and it's what we recommend.  It's cheaper and more comprehensive. And you can buy it online, before your trip. If the car gets damaged, you will have to pay the excess to the rental company, but you can then claim it back. See our car hire excess insurance reviews below.
  2. Buy insurance from the company renting you the car. This is called a Damage Waiver, or Super Collision Damage Waiver (SCDW) and can be purchased when you book the car, or at the rental desk. It reduces the excess (often down to zero) in the event of damage. But it is usually over-priced and offers comparatively poor cover.

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Best car hire excess insurance

Excess insurance (ERI) from a third party insurer is normally far cheaper, and often more comprehensive than the cover offered by car hire companies. 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. 

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
76%£22.54£60.1365 days 1£10,000Yes£1,000£500
Questor Insurance73%£23.92£44.9862 days 1£10,000Yes£500£500
73%£41.28N/AN/AFull valueYesNot coveredFull value
71%£16.64£48.9962 days 1£7,000Yes£500£500
71%£18.09£45.2262 days£7,000Yes£500£500
Cover For You71%£12.00£35.7462 days 1£7,500Yes£500£500
67%£18.48£37.9962 days£7,500YesFull valueFull value

Insurance from your car hire firm: Super Collision Damage Waiver

Car hire companies sell Super Collision Damage Waiver (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 £142 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. Most 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
Europcar - Premium Protection Cover
68%£205.28Full valueT,W & U YesNot coveredOptionalOptionalNot covered
Enterprise - Excess Protection
51%£110.53Full valueOptional
OptionalNot coveredOptionalOptionalNot covered
Alamo - Excess Protection
51%£164.37Full valueOptional
OptionalNot coveredOptionalOptionalNot covered
Goldcar - Mega Relax Cover
Full valueT,W & U
YesAmount of cover variesFull valueNot coveredNot covered
Budget -Vehicle Cover Plus
46%£168.00Full valueT,W & U
YesNot coveredNot covered£2,100Not covered
Avis - Vehicle Cover Plus
46%£168.00Full valueT,W & UYesNot coveredNot covered£2,100Not covered
Using the table: We obtained quotes for a week's car rental from Malaga airport in June 2022. We selected the most comprehensive super collision damage waiver (SCDW) available.

How to avoid the car hire insurance hard sell

When you hire a car in Europe, you are not required to buy any additional insurance. Basic insurance is, by law, included in the rental. So you will never be liable for the entire value of the car, even if it's stolen, set on fire, or written off. 

But that doesn't stop some car hire companies from pressure selling their policies. Some aim to frighten you into a purchase with lies and bullying. You can see these unscrupulous tactics in our undercover video. But pressure selling is illegal. 

To withstand the pressure from pushy agents we recommend that you buy your own excess reimbursement policy from one of the third-party insurance providers above, then just say no at the rental desk. Explain that you don't want any extra cover and that you understand the need to pay up to the excess limit if you damage the car (safe in the knowledge that you can claim it back).

Some people like to print out their own ERI policy to show the rental company. But we found that this can open you up to the hard sell - as agents can (very convincingly) pick holes in your policy that don't really exist. It's better to leave your policy at home.

How we calculate policy scores

In June 2022 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.