The ultimate guide to car rental excess insurance

Determining if you need car rental excess insurance is a wise first step when renting a vehicle. Ensuring you’re covered in case of an accident is crucial, but do you really require the additional insurance options presented at the time of rental payment? The simple answer is not necessarily. Let’s explore further.

What does car rental excess insurance mean?

Car rental excess insurance (or supplemental rental insurance) is a protection plan that charges a fee to cover any out-of-pocket costs you might face if there’s an accident or damage to a rented vehicle. Rental contracts often specify an excess amount or high deductible that you must pay if a rental car is involved in an accident, stolen, or damaged.

What is the excess amount you must pay when renting a car?

Excess cover or deductible amounts for car rentals can vary significantly. Influencing factors include the rental agency, the type of rental car, the location, and the terms of the rental agreement. The rental agreement typically specifies the excess amounts, which can range from several hundred to thousands of dollars.

What does car rental excess insurance cover?

Depending on the specifics of the policy, the insurance may cover some or all expenses in the event of an accident.

How does it function?

In the United States, car rental agencies generally provide four types of coverage:

• Liability coverage: This can differ by state but is designed to protect you in case you injure someone or damage property during an accident.
• Collision or loss damage waiver: This waiver assists with costs if you cause damage to a rental vehicle.
• Personal effects coverage: This protects personal items in the event they are stolen from the vehicle (though if you have renters' or homeowners’ insurance, these items are usually covered).
• Personal accident coverage: This covers medical expenses if you or your passengers sustain injuries in a rental car accident.

In Europe, rental agreements typically include liability coverage, but they usually do not cover damages to the vehicle itself or theft. Since your personal U.S. auto insurance generally does not apply in Europe, you will have three primary options:

• Purchasing a collision damage waiver from the rental agency
• Utilizing zero-deductible collision coverage offered by certain credit cards
• Obtaining collision coverage from a travel insurance provider.

Is car rental excess insurance necessary?

It depends. If you have liability and comprehensive coverage for your vehicle, this coverage likely applies when you drive a rental car in the U.S. for personal use. However, if you are traveling abroad, on a business trip, or simply want additional coverage, you may need extra rental car insurance.

In Mexico, for instance, you are required to purchase additional coverage from a travel insurance provider or rental car company to meet the mandatory insurance regulations.

You should also consider obtaining extra insurance if you don’t own a car and rent occasionally (in which case, you likely lack personal auto insurance), or if your personal policy only provides liability coverage and excludes comprehensive or collision protection.

What is the best way to protect against rental car excess?

One of the most effective options for car rental excess insurance is to purchase coverage from a third-party provider. This additional protection can often be more affordable than the coverage offered by rental companies.

The only drawback is that if the car is damaged, you’ll need to pay the rental company upfront and then seek reimbursement from your insurance.

The collision damage waiver as an option

Rental car companies usually present a collision damage waiver when you book online and again upon picking up the vehicle. By purchasing one, the company waives its right to charge you for damages to the rental car. However, keep in mind that CDWs generally do not cover tire and side mirror damage or incidents resulting from “gross negligence,” such as speeding or driving under the influence.

Final thoughts

We hope to have simplified the car rental experience both at home and abroad, and if you’re ready to rent a car for your next getaway, we’re here to assist you.

How does Dinogo determine the content of this guide?

With over 20 years of global travel experience, I’ve rented cars in Mexico, Italy, France, Ireland, the U.K., and across the U.S. Some journeys went flawlessly, while others, like when I rented a compact manual car and struggled up a steep hill in Tuscany, did not. Through my experiences—both good and bad—I’ve figured out when to invest in extra insurance and when it’s unnecessary. Renting a car can feel daunting, but with Dinogo’s guidance and my insights, I aim to help you navigate it better.

Common questions about car rental insurance excess