What is Car Hire Excess Insurance (and Do You Need It?)

If you’re hiring a car, there are some potential extra - and perhaps unexpected - expenses to consider. Car hire excess insurance presents one such scenario, which can either be necessary or unnecessary depending on your set of circumstances or desire to keep costs down. 

Let’s break down what exactly excess on insurance means, and ask an important question – do you need it?

What is ‘Excess’ in Insurance and How it Applies to Car Hire

Excess in insurance is the initial amount that you must pay on your own terms before your insurance company covers the remaining cost. 

When travelling at home or abroad, you may opt to rent a car. 

The hire price of the vehicle usually includes insurance that covers you in the event of an accident or theft. However, you may also be required to pay a large excess if the vehicle is damaged or stolen. 

This will likely be presented to you by the rental company as a possible upgrade option - and thus an additional expense - when you pick up the car. It can be expensive and might get in the way of other plans you had previously put together.

What is Car Hire Excess Insurance and How Does it Work?

Car hire excess insurance is essentially a reimbursement policy designed to help you sidestep those prohibitive excess costs.

Should you have this policy in place as part of your existing insurance coverage, it provides cover for the aforementioned upgrade option provided by the hire company and thus allows you to avoid additional expense.

For example, if you purchased an AIG Car Hire Excess insurance policy and the car rental company had an excess of €250 and you had an incident in your rental car, the cost to you would be €250. The rental company would pay the rest of the claim's cost. 

With your AIG policy, that €250 could be claimed back to you, not leaving you out of pocket.

Car Hire Excess vs Rental Company Waivers (CDW and Super CDW)

It’s time to simplify some jargon.

‘CDW’ is a nice quickfire way to say ‘Collision Damage Waiver’ which, as the latter part of the term implies, presents a situation in which the vehicle rental company agrees to reduce or remove the amount you are liable to pay in the event of a collision. 

This amount varies according to the rental company in question, the location, and the size of the car. 

To note, if you are hiring a car in the UK, Europe, South Africa, Australia and New Zealand, your car rental agreement should include Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW), Third Party Liability and Theft as standard. 

However, usually there is an excess on the CDW and Theft part of the rental agreement which means that you will be liable for the first portion of every claim. 

This excess is likely to range from about €500 to €2,000. 

Also, when you rent a car in the USA or Canada you will need Supplementary Liability Insurance (SLI) to cover losses incurred as a result of damage, fire, theft and vandalism. You will also need cover for an injury you may cause to other people.

It’s also worth noting that the CDW provided by the rental company only applies to superficial collision damage such as damage caused to the bodywork of the vehicle. More substantial damage elsewhere won’t be covered unless you have taken our car hire excess insurance ahead of time. 

How Much Does It Cost? Daily vs Annual Polices

If you rent a car once a year, you can take out a daily rated policy. If you use rental cars more often, you can take out an annual policy.

A daily policy with AIG is available from as little as 14 cent per day, while a standard annual car hire excess only policy from AIG costs approximately €49.99. 

Does an annual policy mean that you can use car hire excess insurance all-year round? 

Yes, but there is a restriction on the maximum number of consecutive days for a single hire. 

For cover in Europe, the maximum single hire is 31 consecutive days for any one hire and for worldwide cover, the maximum single hire is 60 consecutive days.

Do I Need Car Hire Excess Insurance? (Is It Worth It?)

The big question. 

Well, if you don’t want to shell out around €1,000 of your holiday budget on excess fees, then yes, car hire excess insurance is absolutely worth it. 

Let’s say you’re driving in a hire car while on holiday in France. 

Before the trip, you decided to take out an annual car hire excess policy with AIG for €49.99. Later, while preparing to hand the car back to the rental company, you notice a chip in the windscreen.

The company then request a €1,000 excess fee – let’s be honest, not an ideal way to end the trip. Thankfully, your car hire excess policy with AIG covers you up to €4,000 in any one incident and so you can claim the €1,000 euro back. 

Happy days, and hopefully happy holiday memories, too. 

If you’re wondering what you should be looking for when it comes to choosing a car hire excess policy, consider the following:

• The claims limit – this needs to cover your excess
• The price – this should be cheaper than your excess to be cost-effective
• Whether the policy is daily or annual
• Which locations are covered within the policy
• Any exclusions listed in the policy – so you know what you can claim for

Next, let’s look at what is - and isn’t - covered in the policy. 

What’s Typically Covered and Excluded 

On a single trip or annual car hire excess insurance policy with AIG Ireland, the following are covered:

• Damage, theft, and loss of use
• Car rental key cover 
• Baggage cover 
• Personal accident

The following are not covered on the single trip and annual policies:

• Loss arising on the rental of any vehicle other than a private car with less than 9 seats
• Mechanical or electrical breakdown 
• Damage caused by wear and tear  
• Damage caused by self-inflicted injury or illness or the use of alcohol or drugs 
• Damage you cause to a third party vehicle  
• Losses caused by illegal acts  
• Losses that you have intentionally caused  
• Claims for theft, attempted theft or vandalism if you don't report the incident to the police within 24 hours and obtain a written police report  
• Any losses arising out of driving as your occupation or profession  
• Any car rental agreement exceeding 31 consecutive days  
• Any loss or damage arising from any journey in, to or through the following countries: Afghanistan, The Balkans, Belarus, Cuba, Congo, Iran, Iraq, Ivory Coast, Lebanon, Liberia, North Korea, Myanmar, Sudan, Syria, Zimbabwe or the Crimea Region

How to Make a Claim (What to Keep and Submit)

Should you wish to make a claim, contact our claims department at AIG Ireland within 31 days to notify them of the loss and request a claim form. 

You may contact us in three ways: 

• Phone: +353 1 859 9856
• Email: CarhireExcessClaims.ie@aig.com 
• Postal Address: AIG Europe S.A., 30 North Wall, International Financial Services Centre, Dublin 2

Should you need to make a claim, it’s best to have the following to hand: 

• Rental agreement with the hire company
• Damage report provided by hire company
• Any invoices / receipts relevant to the damage sustained / repairs carried out 
• Proof of payment - a bank or credit card statement will suffice
• Driver’s licence as it applied to the rental agreement 
• Police report if one was generated as a result of the incident

Alongside the above relevant documentation, you will also need to submit the following: 

• A completed claim form, as provided by your insurance company
• A copy of your policy document for verification purposes
• Your bank details

Tips to Avoid High Excess Charges

The clearest and most cost-effective way to do this is to avail of car hire excess insurance prior to renting your vehicle - don’t forget the potentially very costly example of the cracked windshield from earlier. 

It’s also worth considering taking a thorough range of photos of the car when picking it up and dropping it back - and be sure to time-stamp them in one way or another - so that you can prove pre-existing damage, however superficial, should you find yourself unduly accused of causing harm. 

You might also request a detailed inspection check from the hire company upon returning the vehicle, so that there’s no confusion or confrontation down the line. 

And while it should be common sense we’ll remind you anyway - take tremendous care of the car when it’s in your possession! 

FAQS

Is it worth getting car hire excess insurance?

Yes, as it’s an excellent way of avoiding unnecessary and unexpected expense, whether you’re hiring a car once or numerous times a year. 

Does travel insurance cover car hire excess?

No, car hire excess insurance via AIG Ireland is a separate mechanism that exists outside of your standard travel insurance policy. 

Does my credit card cover car rental insurance?

It varies. You should always read the policy that is provided by the credit card company, to check the coverage and make sure it covers the country in which you are renting the car and whether or not there is an excess (non waiver, deductible) on the policy.

How do I know if my car insurance covers rental cars?

The short answer is it’s best to triple-check with your provider.

If you are hiring a car in the UK, Europe, South Africa, Australia and New Zealand, your car rental agreement should include Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW), Third Party Liability and Theft. 

However, usually there is an Excess on the CDW and Theft part of the rental agreement which means that you will be liable for the first portion of every claim. This Excess is likely to range from about €500 to €2,000. 

When you rent a car in the USA or Canada you will need Supplementary Liability Insurance (SLI) to cover losses incurred as a result of damage, fire, theft and vandalism. 

You will also need cover for an injury you may cause to other people. The SLI tops up your existing third party liability insurance.

Peace of Mind Wherever You Travel

Whether you’re renting a car for a short holiday in Ireland or embarking on an extended trip abroad, understanding car hire excess insurance can save you from costly surprises. Without proper cover, even minor damage could lead to excess fees running into hundreds or thousands of euros - an unwelcome hit to any travel budget.

By planning ahead and choosing a policy that suits your rental habits and destinations, such as AIG’s daily or annual Car Hire Excess options, you can drive with confidence knowing you’re protected against unexpected expenses.

Need more car hire advice? Visit our Car Hire Content Hub, filled with guides and tips to help you drive with peace of mind wherever you go.