This is very important and often causes confusion with consumers, so we have tried to give an industry-wide overview of the subject as well stating our own arrangements - we hope that you will bear with us.
Standard Australian car rental contracts make the Renter fully responsible for any loss or damage caused by or to the rented vehicle during the rental period, irrespective of how such damage or loss occurred. The Renter is also responsible for any loss of rental opportunity whilst vehicles are being repaired.
We automatically provide our Renters with the protection of our fleet insurance policy in respect of such loss or damage, provided that they comply fully with all conditions of rental. However this protection comes with an "insurance excess" component (the amount below which the insurance policy does not operate and therefore is the responsibility of the insured). As is customary within the car rental industry, this excess is much higher than is normally contained with a normal consumer's own comprehensive motor insurance policy, however our customers can pay a small surcharge on top of their normal rental costs to reduce their liability from the high "standard" excess to something more manageable.
Within the framework as outlined above, there are dramatic differences in the price and scope of the insurance excess reduction programs offered by different car rental companies. Indeed it could be a very expensive mistake to assume that all companies offer the same (or similar) cover.
No insurance arrangement ever offers "complete" protection; we are all aware that if the driver is charged with contravention of alcohol or drug laws, the insurance is invalidated. Other lesser known, but readily understood invalidation actions are: vehicle stolen whilst the vehicle was unlocked or the keys were not kept secure; premeditated dangerous acts such as "burn outs"; "running a red light"; excessive speed (more than 40Klm per hour above limit); attempted negotiation of flooded causeways, roads or bridges; and damage caused deliberately by the driver or any occupant of the vehicle. Other invalidation actions found in almost every insurance policy are abandonment of the vehicle and use of incorrect type or grade of fuel.
In addition to the universal invalidation matters described above, there are other exclusions that are normal to the rental car industry, but not always contained in other insurance arrangements, these include:
- Vehicle being driven by an unauthorised driver or driven in an unauthorised area.
- Vehicle being driven on an unsealed/unmade road (excluding roads under repair or private property driveways).
When dealing with other car rental companies, be particularly careful to enquire whether the reduced liability that they are offering includes full protection for the matters mentioned below. We do not restrict our protection in respect of any of these matters except for immersion in water other than where the vehicle is unattended or being transported on a car ferry (see s6 d of Terms and Conditions of Rental).
- Hail or Storm Damage
- Interior Damage
- Glass and Tyre Damage
- "Single Vehicle Accident" Damage
- Immersion in Water
- Damage caused whilst reversing
Even though cover on these matters is often excluded or adversely modified, very few companies give any definition to these terms; however a major company defines a "Single Vehicle Accident" as being any incident that does not involve any other moving and identified vehicle.
Travel Insurance and Rental Car Excess Cover Policies
Some people take out travel insurance to protect themselves whilst they are travelling, some of these policies include "Rental Car Insurance Excess Protection" (or similarly worded cover) - this is not applicable to all travel policies and people should be aware of the actual cover offered under such policies and consider whether the cover provided actually meets their needs.
There are also some Rental Vehicle Excess Reduction policies available on a "stand alone" basis (i.e., not having any other insurance component such as airfare or accommodation cancellation cover, lost baggage etc.) These seem to be about the same cost as, or slightly dearer than our MaxiSafe package.
Two things should be borne in mind:
- The rental company can't claim on your policy, you will need to settle with them and then subsequently claim from your insurer. You will be out of pocket for the time between paying the rental company and settling your claim.
- The 3rd party insurance cover is for Rental Car Insurance Excess costs and does not cover you for what you may owe the rental company for matters not covered by their insurance excess arrangements. Some rental companies do not extend any cover for "single vehicle accidents"; "interior damage"; "glass and tyre damage"; "damage whilst reversing" or "hail and storm damage". Under these circumstances (as well as the general exclusions already discussed) you would need to pay the rental company, but not be able to claim from your insurer. It is impossible for travel insurance or a 3rd party rental car excess cover to provide better protection than is offered by the rental company - whatever flaws already exist in the rental company's cover will continue with the travel policy.
With us, you can control the amount of money that you spend and the risk that you take, by selecting the rental car excess reduction package that most suits your needs. Find out about our insurance options.
Posted By Darryl on 6th June 2018
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