Wave goodbye to the car hire ‘waiver’ rip-off

THE biggest headache with car hire in many parts of the world is the excess on insurance cover – what you are still liable to pay for repairs if there is any damage to the vehicle.

In Europe, the excess set by the rental companies is often scarily high. In Spain, Portugal or Italy, for an economy car it can be as much as €1,300 (about £1,180).

Hire companies sell add-on insurance cover – often called Super Damage Waiver – that reduces the excess to zero. But it’s ridiculously expensive. For a week’s rental of an economy car with Hertz from Pisa (Italy) in September, I was quoted £95 for the basic rental with collision damage waiver (CDW) and theft protection insurance, but an additional £214 for the Super Cover excess waiver.

A check with other companies revealed excess waiver policies costing £130 to £155 on an economy car for a week in France, Spain and Portugal. Thankfully, you can avoid paying these rip-off fees by taking out a separate standalone excess waiver policy from a third-party insurer.

Moneymaxim.co.uk/comparecar-hire-excess-insurance, a price-comparison service, provides quotes with lots of insurers. For a week’s cover for car hire in Spain, excess waiver rates range from about £12 to £25. Annual, worldwide excess waiver policies can be even better value.

The policies vary, but normally they are good for vehicles worth up to £50,000, and damage to windows, tyres, the undercarriage and loss of keys is covered – areas often excluded on excess waiver sold by car rental companies. However, not everything is straightforward. Decline the car rental company’s own excess waiver arrangement and the car hire firm will block off, or deduct as a refundable deposit, the excess amount on your credit card. Also be prepared for misleading, hard-sell tactics at the car rental pick-up counter.

Neil Harrison had a cheap standalone excess waiver policy in place to cover his car hire in Sicily last month. ‘But when I picked up the vehicle, I was told they didn’t accept my excess waiver insurance,’ says Neil, ‘and if I didn’t pay for their own excess waiver I’d be liable for the initial €1,600 worth of damage. To be safe, I decided to pay up.’

According to moneymaxim’s Mark Bower, customers told their standalone excess waiver policies are not accepted ‘is a recurring problem. Agents are heavily incentivised to sell add-ons when you pick up a vehicle’.

If you rely on an excess waiver policy from a third-party insurer, should the rental company end up charging you for damage to the vehicle, you’ll have to pay them for the repair (up to the excess limit), then claim back the amount from the insurer.