Whether you’re setting off on an exciting road trip in a hire car or just borrowing a vehicle to visit loved ones, having the right insurance is more than just a legal requirement. It’s a crucial safeguard for your finances, your vehicle, and your peace of mind.
While the prospect of being involved in a car-related incident is not pleasant, it’s always better to be prepared. With hire cars, even minor scrapes or bumps can lead to major charges, which is where reliable car hire excess insurance comes in. From accidents to theft, the right policy can help protect you from unexpected costs and ease any financial strain involved.
When you’re searching for your ideal Car Hire Excess insurance policy, you’ll likely come across the term voluntary excess; this term sounds more complicated than it is. In this blog post, we will go over everything you need to know about how voluntary excess in Car Hire Excess insurance works. You will learn exactly what it is, how it differs from compulsory excess, how it can impact your premiums, and what factors should be considered when you choose the excess amount for your policy.
What is Car Hire Excess Insurance?
Car Hire Excess Insurance covers the excess charges you would be liable for when renting a car. When you rent a vehicle, the rental company will typically provide insurance, but it often comes with a high excess amount (usually between £500 and £2,000), if the car is damaged or stolen.
While rental companies offer their own insurance to cover this excess, it can cost around £9 or more per day, and may not cover areas like the windscreen, tyres, bodywork, or interior. Even if you add coverage for these areas, it increases the overall cost of your policy. Not ideal.
Most Car Hire Excess Insurance providers offer Zero Excess as standard, meaning you do not pay any excess fee should you need to make a claim. However, they will give you the option to choose a voluntary excess (an amount you're willing to pay towards a claim, usually resulting in a lower premium). The benefits of Car Hire Excess Insurance include:
- Financial Protection: Covers the excess amount you’re liable for in case of damage, theft, or loss of the rental vehicle.
- Worldwide Coverage: Provides protection for both domestic and international car rentals.
- Peace of Mind: Helps reduce the financial burden of an accident or damage, giving you peace of mind during your travels.
- Flexible Coverage Options: Choose between a Single Trip Policy (covering one rental period up to 31 days) or an Annual Multi Trip Policy (covering multiple rentals within the year, with a maximum of 31, 45, or 64 days per rental period).
When getting Car Hire Excess Insurance, an important thing to consider is the choice between having an excess or no excess. This will largely depend on your personal preferences, risk tolerance, and budget. Having an excess generally results in lower premiums, making the insurance more affordable. However, you do assume a small portion of the risk. This can potentially make you feel more cautious while driving. While it is your choice to opt for a voluntary excess, it may be better for those who are confident in their driving and are willing to take on some financial responsibility.
What is Voluntary Excess?
When buying a policy, you have the option to include a voluntary excess, as mentioned above. This is an amount you agree to pay towards any claim you make on your Car Hire Excess Insurance policy. The voluntary excess amount you choose (typically in the hundreds) will be subtracted from any reimbursement you receive from your insurer.
Here’s an example that illustrates how voluntary excess works:
Imagine you’ve taken out a Car Hire Excess Insurance policy with a £200 voluntary excess. Now let’s say you’ve been involved in an accident, such as bumping into a wall while parking; your repair costs are £1,000. You would pay the first £200 and your insurer will be the remaining £800.
What is Nil Excess?
The terms Nil Excess or Zero Excess (occasionally also called an excess waiver), refers to policies where you won’t need to pay any excess at all in the event of a claim.
To illustrate, with a standard policy, you might need to pay £500 towards a claim, but with zero excess, you won’t pay anything. This can give you peace of mind, especially when the last thing you want on holiday is a surprise bill for damages!
Zero excess policies are particularly useful for those who want to avoid the hassle of unexpected out-of-pocket expenses when they’re already dealing with the stress of an accident or damage.
Most Car Hire Excess Insurance policies offer Zero Excess as standard, although most will allow you to add a Voluntary Excess if you do not want to accept the standard policy.
What is the difference between voluntary and compulsory excess?
Car Hire Excess Insurance typically involves what's known as a voluntary excess, an optional amount you agree to pay towards a claim which generally results in a lower premium. While Zero Excess is standard on many policies, most insurers do offer the option to add a voluntary excess if you’re looking to reduce your premium further.
You might also come across the term compulsory excess, but this only applies to standard car insurance policies, not rental car agreements. It’s a fixed amount set by insurers and doesn’t relate to Car Hire Excess Insurance.
When do you pay a Voluntary Excess?
Excess applies whenever you make a claim on your policy. You will need to pay the excess amount outlined in your policy before your insurer covers the rest of the cost. However, there are some scenarios where excess may not apply, such as:
- Non-fault accidents where the other driver’s insurer accepts liability
- Policies with specific benefits or no-claims discounts
Alternatively, if you have not chosen to add a Voluntary Excess and have instead chosen a Zero Excess policy (which is designed to remove excess payments altogether), then the Voluntary Excess will not apply to you.
Why opt to add a Voluntary Excess to your policy?
There are several reasons why you might choose voluntary excess cover. The main reason is because, as mentioned above, it can lower the cost of your overall insurance premium. This means that, should you be involved in an accident, the financial hit to you is lessened. It can also give you some peace of mind to know that you are better prepared and have removed some of the stress of being involved in an incident.
Another reason is that by agreeing to pay more in the event of a claim, you’re showing your insurer that you’re a lower-risk customer. This may lower your premium, as you are taking on a higher financial responsibility yourself.
Below are some things to consider when making your decision:
- What can I realistically afford to pay in a claim?
- Am I confident in my driving and risk level?
- Do I want lower monthly premiums or better coverage?
- Will I be driving in unfamiliar areas or abroad?
- Would zero excess give me more peace of mind?
Remember: If you can't pay the total excess, your insurer may not process the claim, which is why it’s important to choose an amount you can afford.
Why choose Gigasure as your provider for Car Hire Excess Insurance?
Gigasure Car Hire Excess Insurance not only helps cover excess fees if your rental car is damaged, stolen, or lost, minimising out-of-pocket costs and ensuring peace of mind while travelling, but offers a seamless experience. You can access your policy and make a claim entirely through the Gigasure app. No need to wait on the phone, listening to an old jazz instrumental. We also offer the following:
- Collision Damage Waiver/Loss Damage Waiver: This is an optional add-on to a car rental agreement that reduces your liability for either damage or theft to the car. This is commonly offered by car rental companies, particularly in regions like the USA, Canada, and outside of Europe, to reduce or eliminate your financial responsibility if the rental car is damaged or stolen. While this cover is typically included in European rentals, travellers heading to the USA, Canada, or other international destinations often need to purchase it separately. Gigasure provides CDW/LDW cover if you choose an annual policy that includes USA, Canada, or Worldwide regions.
- Locked Out of Vehicle: This happens when you are unable to access your car for whatever reason. Examples include accidentally leaving the keys inside, losing or otherwise damaging your keys, or in the event of the car locks malfunctioning. Additionally, this covers keys being stuck in the ignition.
- Misfuelling: This is a relatively common mistake that essentially means you have filled your car with the wrong fuel. This can cause serious damage to your vehicle engine and pump.
Adding a voluntary excess to your insurance policy is a personal decision, but one that can offer several meaningful advantages. By agreeing to pay a higher amount upfront in the event of a claim, you can often enjoy lower premiums. It can also give you greater control over your policy and how much you’re willing to contribute should something go wrong. For confident drivers, opting for voluntary excess can strike the right balance between affordability and protection, all while providing that extra peace of mind knowing you’ve tailored your cover to suit your needs.
Frequently Asked Questions
What is voluntary excess on Car Hire Excess Insurance?
Voluntary excess is an additional amount you agree to pay towards a claim, on top of the compulsory excess set by your insurer. Choosing a higher voluntary excess can help reduce your insurance premium.
Should I choose a high voluntary excess to reduce my premium?
A higher voluntary excess usually means lower premiums, but you'll pay more out of pocket if you need to make a claim. Make sure the amount you choose is affordable in a worst-case scenario.
Can I change my voluntary excess later?
Most insurers allow you to adjust your voluntary excess at the time of policy renewal. Some may also permit changes mid-policy, depending on their terms. For more information, please read your policy documents carefully or contact their customer care team.
