Rental Car Insurance: What It Is, And Why You Need It

Rental Car Insurance: What It Is, And Why You Need It

Whether you rent a car in Australia or overseas, the company you choose will almost certainly offer you the option to take out excess insurance with them. Effectively, this eliminates the excess you will be liable for in the event of an accident or any damage to the vehicle, whether your fault or not. It is usually vastly overpriced, and it is a tired old tactic by car rental companies to drag as many extra dollars out of customers as possible. This article will examine the advantages of taking out your rental car insurance separately before hiring the vehicle.

What is rental car insurance?

No matter where you are when you rent a car, you are liable for any damage to the vehicle if it is involved in an accident, stolen, or otherwise damaged in some way. The excess and associated fees can run into many thousands and ruin any trip you may have taken. But fear not because there is a simple, affordable solution.

Protecting yourself against unwanted costs

Any decent insurance company can provide you with rental car insurance, either as a separate policy or as part of a comprehensive one. The policy will protect you against the cost of the excess charge or repairing the vehicle to its original state, whichever costs less.

Elements of rental car insurance to look for

The following should be non-negotiable elements of any rental car insurance you choose:

. Accidents and damage

Amounts vary, so make sure your chosen policy covers a decent amount of excess in case of problems. It must specify that this money will be provided regardless of fault. 

. Cover for all the vehicles you will rent on your trip.

Imagine the frustration of getting your hands on a lovely camper van for a weekend away, only to discover later that your rental car insurance policy does not cover it. Whether exploring Australia’s untamed Outback in a 4WD or leisurely traversing the Great Ocean Road in a people-mover, make sure your policy allows it, or choose another.

. Theft of the vehicle

A decent policy will cover up to $5,000 for the excess you could be charged if your rental vehicle is stolen whilst in your care.

. Return of the vehicle if incapacitated

If you are advised by doctors not to drive, but your vehicle has not yet been returned, your rental car insurance policy should make some provision for that scenario.

Caveats and exclusions to note

The following conditions will be in place with any standard rental car insurance:

  • The vehicle must be rented from a professional rental agency recognised by the insurer.
  • Vehicle insurance or damage waiver must be included.
  • All the requirements of the rental agency must be met and complied with.
  • You must not drive under the influence of alcohol or other substances that impair driving performance.


Purchasing separate rental car insurance through your trusted insurance company is almost always better than relying on the one you will be offered while standing at the counter. You will need more time to read it thoroughly and may feel pressured or distracted. Not to mention that it will undoubtedly be more expensive. Speak to your preferred insurers ahead of time and take the stress and expense out of the equation.

Written by Joshua Galyon

Joshua is a senior editor at Snooth, covering most anything of interest in the world of science and technology. Having written on everything from the science of space exploration to advances in gene therapy, he has a real soft spot for big, complicated pieces that make for excellent weekend reads.

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