If you're renting a car, it seems prudent to pay to reduce the excess as well — who wants to be stuck with a huge bill if there's an accident? However, you may well be better off relying on travel insurance instead.
Picture: Phillip Capper
Consumer advocacy group Choice analysed car insurance charges in Australia, and found that the typical per-day rate to reduce your excess is between $19 and $34 a day. Rental companies make insurance look like a sensible option by setting very high excess payments, as these rates show:
|Provider||Basic excess liability||Reduced excess||Price to reduce excess (per day)|
However, travel insurance is often a cheaper and better option. Here are the rates Choice identified for a five-day policy from selected providers, and the amount of excess they cover. (The credit card options are free if you use that card for the hire.)
|Worldcare Travel Insurance||$6000||$38|
|Virgin Australia Velocity High Flyer card||$2750||Included|
|ANZ Platinum card||$5000||Included|
Not only are those rates lower on a daily basis, travel insurance also covers you for other expenses in the event of an emergency, so it's better value overall.
Whichever option you choose, it pays to check for exclusions. Some policies won't cover you if you use the incorrect fuel type; others don't include damage to windscreens or tires. And in some policies, driving outside of town and city limits in Western Australia or the Northern Territory will also render your insurance void. So check those details carefully!