CHOICE says car hire insurance a rental rort

CHOICE says that buying your rental car insurance at point of sale or online through a car hire company will see you paying up to 491% more than getting coverage under a basic travel insurance policy.


“We’ve all felt the pressure to get insurance when hiring a car but the reality is if you’ve taken out travel insurance you can save yourself a lot of money by slamming the door on it,” says CHOICE Head of Media Tom Godfrey.

“Car accidents can be very costly so it’s not surprising consumers look to take out extra coverage to reduce their liability which can be as high as $4000.”

CHOICE found most car hire companies will charge between $19-$34 per day, while buying domestic travel insurance will only cost you around $35 for five days. A standard travel insurance policy will also cover you for up to $6000 in car hire excess – in addition to offering coverage for other unexpected events.

“In addition to being expensive buying car insurance from hire companies can leave you grappling with exclusions that will leave you on the side of the road if something goes wrong.”

CHOICE found common exclusions, including:

  • driving outside any town or city limits in WA or NT between dusk and dawn;
  • hail, flood, fire, storm or cyclone;
  • windscreens, glass, tyres, wheels, overhead damage, under body damage
  • driving on unsealed roads
  • using the incorrect fuel type

“Which ever insurance you opt for you should always read the terms and conditions and make note of the exclusions.”

“You can also save money by checking to see if you already have coverage through your credit card, as some products include travel and car hire insurance. For example, the ANZ Platinum cards include up to $5000 in coverage for car hire excess.

“If you have coverage on your credit card there’s no real reason to take out insurance again through a car hire company but check to ensure you have activated it before you hit the road.”

CHOICE reminds consumers that credit cards can attract high interest rates, so it’s best to pay with credit card only if you are confident you can pay it off quickly.

Photo Credit: SkatyBoy (cc)