Hiring a car can be a convenient way to explore a new destination, whether you’re driving along the coast in Spain, navigating the streets of Italy, or planning a UK road trip. But many travellers are surprised when they discover that their rental agreement still leaves them responsible for paying a large excess if the car is damaged or stolen.
That’s where car hire excess insurance comes in.
In this guide, we’ll explain what car hire excess insurance is, how it works, what Collision Damage Waiver (CDW) means, and what to look out for before collecting your hire car.
Quick Summary
- Car hire excess insurance may help reimburse charges you are liable for if your rental car is damaged or stolen.
- Rental companies often include basic Collision Damage Waiver (CDW), but this usually comes with a high excess.
- Standalone excess insurance can sometimes cost less than buying additional protection directly from the rental desk.
- Policies can include cover for tyres, windscreens, wheels, keys, misfuelling and more, depending on the provider and policy terms.
- Cover is subject to terms, conditions, exclusions and financial limits.
What Is Car Hire Excess Insurance?
Car hire excess insurance is designed to help cover the excess you may have to pay if a rental vehicle is damaged, stolen, or involved in an accident during your hire period.
When you rent a car, the rental company will usually include a basic level of insurance within the rental agreement. This is commonly known as Collision Damage Waiver (CDW).
However, CDW often includes a large excess, meaning you may still be responsible for paying the first portion of any claim.
For example:
| Scenario | Amount |
|---|---|
| Repair cost after damage | £1,200 |
| Rental company excess | £950 |
| Amount you may have to pay | £950 |
Car hire excess insurance may allow you to reclaim some or all of that excess, depending on the policy terms and the circumstances of the incident.
What Does “Excess” Mean?
The “excess” is the amount you agree to pay towards a claim before the rental company’s insurance contribution applies.
Excess amounts can vary significantly depending on:
- The country you’re travelling in
- The vehicle type
- Your age
- The rental company
- The level of cover included
In some cases, excess charges can reach several thousand pounds.
This is one reason many travellers look at standalone car hire excess insurance before travelling.
What Is CDW (Collision Damage Waiver)?
Collision Damage Waiver, often shortened to CDW, is commonly included with rental vehicles.
CDW is not always a full insurance policy. Instead, it is typically an agreement that limits your financial responsibility if the vehicle is damaged or stolen, provided you comply with the rental agreement terms.
However, standard CDW often:
- Includes a high excess
- Excludes certain types of damage
- May not cover tyres, wheels or glass
- Can exclude interior damage
- May not cover administrative fees or loss of use charges
How Does Car Hire Excess Insurance Work?
Most standalone policies work on a reimbursement basis.
This means:
- The rental company charges you for the damage or theft
- You pay the charge directly to the rental company
- You then submit a claim to your excess insurance provider
- If approved, eligible costs may be reimbursed up to the policy limits
You will usually need supporting documentation such as:
- Your rental agreement
- Damage reports
- Receipts or invoices
- Proof of payment
- Photographs
- Police reports where required
Looking for Car Hire Excess Insurance?
Planning a trip abroad or hiring a car in the UK? Leisure Guard offers Car Hire Excess & Damage Insurance designed to help reimburse eligible excess charges and certain other rental-related costs following damage or theft, subject to policy terms, conditions and exclusions.
Whether you’re hiring a car for a single trip or travel regularly throughout the year, you can explore cover options online and get a quote before you travel.
Get a quote for Leisure Guard Car Hire Excess Insurance today.
What Can Car Hire Excess Insurance Cover?
Cover varies between providers and policies, so it’s important to read the policy wording carefully.
Some policies may include cover for:
- Excess charges following damage or theft
- Tyres and wheels
- Windscreens and glass
- Roof and underbody damage
- Towing costs
- Loss of use charges
- Administration fees
- Lost or stolen keys
- Lockouts
- Misfuelling
For example, Leisure Guard’s policy includes:
- Up to £10,000 excess reimbursement
- Up to £5,000 for glass damage
- Up to £5,000 for tyres and wheels
- Misfuelling cover
- Lockout and key cover
- Personal possessions cover
- Personal accident cover
All cover is subject to terms, conditions, exclusions and eligibility criteria. Please ensure you read your policy documents before purchasing any policy.
What Is Usually Not Covered?
Like all insurance products, exclusions apply. It is important that you your policy documents to understand what is not covered before purchasing any policy.
Common exclusions may include:
- Driving under the influence of alcohol or drugs
- Damage caused by reckless driving
- Off-road driving
- Racing or track use
- Damage caused by wear and tear
- Unauthorised drivers
- Mechanical failure
- Breaching the rental agreement
- Certain vehicle types
Leisure Guard’s policy also excludes:
- Vans and motorhomes
- Vehicles over £65,000 in value, when new
- Cars with more than 9 seats
- Where the rental agreement doesn’t include the rental company’s basic CDW
- Damage caused by wear and tear
- Driving on racetracks or derestricted toll roads
This is not a full list of all exclusions, please read the policy documents carefully before purchasing a policy.
- The policy wording
- Country restrictions
- Vehicle restrictions
- Driver eligibility requirements
Is Car Hire Excess Insurance Worth It?
Whether car hire excess insurance is worth it depends on your circumstances, travel habits and risk tolerance.
Some travellers prefer the convenience of buying additional protection directly from the rental desk, while others choose standalone excess insurance before travelling.
Standalone policies can sometimes:
- Cost less than rental desk upgrades
- Provide broader protection
- Include cover for tyres, wheels and glass
- Cover multiple trips with annual policies
However, policies vary, and travellers should check whether the cover meets their needs.
Annual vs Single Trip Car Hire Excess Insurance
There are generally two main types of policy available:
Single Trip Policies
These cover one rental period.
They may suit:
- One-off holidays
- Occasional travellers
- Short breaks
Annual Policies
These can cover multiple rentals throughout the year.
They may suit:
- Frequent travellers
- Business travellers
- Multiple holidays per year
With Leisure Guard Car Hire Excess & Damage Insurance, annual polices cover multiple rentals during a 12-month period, with rentals up to 31 days at a time.
Does Travel Insurance Cover Car Hire Excess?
Sometimes, but not always.
Some travel insurance policies include limited car hire excess cover as an optional extra or built-in benefit.
However:
- Financial limits may be lower
- Cover may only apply overseas
- Certain vehicle types may be excluded
If car hire protection is important to you, it’s worth checking the policy wording carefully before travelling.
Tips Before Collecting Your Hire Car
Before driving away:
- Photograph the vehicle thoroughly
- Record existing damage
- Check tyres and wheels
- Understand the excess amount
- Read the rental agreement carefully
- Confirm who is authorised to drive
- Keep all paperwork , avoid paying by cash
If an incident occurs:
- Notify the rental company immediately
- Obtain supporting evidence
- Report theft or accidents to the police where required
These steps can help make the claims process smoother if you need to submit a claim later.
Get a Quote for Car Hire Excess Insurance from Leisure Guard
If you’re planning to hire a car abroad or in the UK, Leisure Guard Car Hire Excess & Damage Insurance could help provide protection against unexpected rental charges following accidental damage or theft.
Cover can include:
- Excess reimbursement
- Tyres, wheels and glass
- Key cover and lockouts
- Misfuelling
- Loss of use charges
- Towing and administration costs
- Cutting Short your rental
- Personal Possessions
- Annual and single trip policies
All cover is subject to policy terms, conditions, exclusions and eligibility criteria.
Before purchasing any policy, always read the policy wording carefully to ensure the cover is suitable for your needs.
Final Thoughts
Car hire excess insurance is designed to help reduce the financial impact of unexpected damage or theft charges when renting a vehicle.
While rental companies often include basic CDW cover, travellers may still face substantial excess charges if something goes wrong.
Understanding how excess insurance works, what is covered, and what exclusions apply can help you make a more informed decision before travelling.
As with any insurance product, always read the policy wording carefully and ensure the cover is appropriate for your trip, destination and vehicle hire requirements.
Not all car hire situations, territories will be covered by Leisure Guard Car Hire Excess and Damage insurance policy. Be sure to read the policy details carefully to see what is and is not covered.
The thoughts and opinions expressed in the page are those of the authors, intended to be informative, and do not necessarily reflect the official policy or position of Leisure Guard Car Hire Excess and Damage Insurance. This content is for general information purposes only and is not intended to provide advice or amend the terms of any policy.
