Rental Car Insurance in Australia: Unravelling the Coverage Options

PUBLISHED ON Jan, 20 2023


Embarking on an Australian road trip is an exciting adventure, but it’s essential to have the right insurance coverage for your rental car to ensure a smooth and worry-free journey. With numerous options available, understanding rental car insurance in Australia can be a complex task. In this article, we will unravel the various coverage options, providing you with valuable insights to help you make an informed decision on securing the most suitable protection for your rental vehicle. From collision damage waivers to third-party liability, we will guide you through the ins and outs of rental car insurance in Australia, allowing you to focus on creating unforgettable memories on your epic road trip.

How does insurance work when you rent a car in Australia?

When you book a rental car in Australia, you will see that there is no option to buy insurance for the rented vehicle, as there is available for purchase in the U.S. The reason for this is that rental car insurance is automatically included by custom in Australia. When you rent a vehicle in Australia, you will note that the price of the rental include CDW and LDW insurance.

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What is CDW LDW insurance?

In case the rented vehicle gets stolen or damaged while it is under your custody, you have an obligation to pay for the repairs needed. The amount you need to pay in case of an accident is called “liability”.

As we mentioned above, the rented vehicle in Australia is already insured in order to reduce your liability. This insurance is also known as Collision Damage Waiver (CDW). CDW lowers the liability from the actual amount of the damage, to an agreed upon amount which is called “excess”.

How does this effect you? And how does car rental insurance work in Australia?

When you rent a car in Australia Collision Damage Waiver (CDW) and Theft Protection (TP) insurances are mandatory required for car rentals.

This means that if the car you rented gets damaged while in your custody, you go from full value down to around AUD$1,500-3,000.

Rental car excess insurance Australia

As you understand, the question is not if you really need insurance on a rental car in Australia or should you take out extra insurance when renting a car in Australia?

The right question that you should ask yourself is – do I need additional insurance for rental car? And is extra insurance needed for rental cars?

If you are not a risk taker, then the answer to these questions is – yes!

As you already understood, while rental cars are insured in Australia, you still have to pay the excess in the event that the vehicle is damaged or stolen. However, there is a way that allow you to reduce your excess to zero! This is where car hire excess insurance comes into place.

What is Rental Vehicle Excess Cover?

When you rent a car in Australia, rented car excess insurance, also known as car hire excess waiver insurance, is an optional insurance policy that protects you against the aforesaid excess charges that may apply in the event your rented car is stolen or damaged. If you have rental car excess insurance and the car you rented gets damaged while in your custody, you could file a claim and your insurer would reimburse you for the calculated damage costs (typically AUD$1,500-3,000 – depending on your chosen level of coverage).

CarInsuRent car hire excess insurance starts from as low as $6.49 per day* to $94.90 for an annual policy. Our policies covers the excess on damage and theft up to €2,500 and provide full protection that Includes single vehicle damage, roof and undercarriage damage, auto glass and widescreen damagetowing expenses, misfuelling, loss of car key and tire damage. We cover multiple drivers between the ages of 21 and 84 years.

Should I get the loss/damage waiver when renting a car?

Before you decide if there’s a need to purchase a comprehensive car hire insurance in Australia to eliminate the excess in case of damage to the rented car, check what is the typical excess applicable with the rental company under the standard CDW insurance they provide.

The rental company may offer you to purchase its own car hire excess insurance, also known as Super CDW, at a high fee of course. One thing to keep in mind is that Super CDW offered by the rental company cost more than car excess insurance in Australia offered by independent 3rd party companies, and cover less than the car hire excess insurance policies provided by 3rd party companies in Australia. Taking Super CDW from the rental company could easily increase your overall car rental cost by 30 to 40% and in some cases even double the price.

CarInsuRent is considered as one of the best rental car insurance providers in Australia and offer car rental excess insurance policies up to excess of US$ 4,500.

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How does Rental Vehicle Excess Cover work?

Our Australian car rental excess waiver insurance is a reimbursement that covers your excess obligation when renting a vehicle. If the car gets damaged while in your custody, the rental company will calculate the cost of repair needed and charge your credit card up to your excess.

After the rental company charged you for the loss or damage, you can file a claim on our website and, CarInsurent which is considered among the best car rental excess insurance in Australia,  will fully reimburse you the amount you were charged. In order to file a claim you need to provide certain documents. These documents include, inter alia, a copy of the rental agreement, a copy of the damage report given by the rental company, detailing each cost incurred and a copy of your credit card statement that reflects your payment for the claimed damages.

After we receive your claim, we might ask you to provide additional information, such as photographs of the damage that may help ensure that the charges are reasonable. Once we have all the relevant documents and information in hand, it may take up to 5 usually take less than a week to finalize and approve a claim.

Our rental car insurance for Australia also cover your baggage and personal belongings. In the event that your rented vehicle was stolen, or if someone broke into the vehicle and stole your belongings, our vehicle excess waiver insurance will reimburse you for this as well.

Additional tips that Australian drivers should look out and take note of when renting a vehicle in Australia:

Hopefully you will never experience the stress and emotional trauma of a damaged or stolen rental car. We’ve gathered a few tips that will ensure that you have the right cover in place in case your rental car is damaged or stolen:

  1. Rent only from licensed rental agencies/companies – independent 3rd party car excess insurance providers in Australia will only cover your damage if you rented the vehicle from a licensed rental company.
  1. Only named drivers should drive the rented car– your car hire excess insurance policy is only applicable to drivers who are listed on the rental agreement at the time of rental. Damage caused while the vehicle is driven by other parties will not be reimbursed.
  1. Your credit card limit– When you pick up the rented car, the rental company will block an amount equal to your excess on your credit card. Always ensure that your credit card limit covers the excess you are liable to.
  1. Read the terms of the rental agreement – Your car hire excess insurance policy won’t cover you if you breach the terms of your rental agreement. We advise you to make sure you’re fully aware of your responsibilities when renting a car. For example, unless you hire a 4X4, taking your rental car on an unsealed road would probably void your insurance coverage.
  1. Make sure your vehicle is covered – Your car hire excess insurance will not cover you if the type of vehicle you plan on renting is not eligible for cover. For example: there are special car hire excess policies for campervans and motorhomes as these types of vehicles are not covered by the “standard” car hire excess waiver insurance.
  1. Submitting your claim – you will need to provide copies of supporting documents in order for your car rental excess claim to be approved, These documents may include your driver’s license, your rental vehicle order/agreement, check-in and check-out reports, a repair bill and a credit card statement reflecting the excess you paid.
  1. Car Rental Excess differ from make and model – Sometimes the rental company will offer you to upgrade your rented vehicle free of charge. Take note that repair costs can vary from make and model and make sure that your car excess insurance policy in Australia, covers you following such upgrade. For example, the excess for luxury vehicles might be higher than regular sedans.

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Frequently asked questions

Does a rental car come with insurance?

Many people ask this question – “are rental cars insured?” If you are renting a car in Australia – the answer is yes. However, you should keep in mind that you are still liable for the “excess” in the event of damage or the car is stolen.

What happens if you damage a rental car?

When a rental car is damaged, you are liable for the repair costs up to the “excess”. You are also liable for “loss of use” charges that cover the potential revenue lost when the vehicle is off the road for repairs. CarInsuRent car hire excess insurance for Australia will fully cover these costs. We encourage your to read the car hire excess insurance Australia reviews posted on our website and at TrustPilot.

Are scooters and motorcycles covered under rental car excess cover?

Most policies are applicable only to motorcars but exclude coverage for motorcycles. Study the contract carefully before leaving the rental office, ensuring that you have checked the optional extras.

If I have car hire excess cover, do I need to purchase the additional cover offered by the rental company?

The rental vehicle excess waiver insurance provided by CarInsuRent, which is considered among the best car rental excess insurance in Australia, is an alternative to car rental insurance with no deductible being sold by rental firms and you don’t need to buy other insurance plans to cover your rented vehicle.

What should I do if my rental car is stolen?

The first step is to immediately report the theft to the police and to the rental company. Make sure that you get a copy of the report, as this is essential for insurance purposes (and maximize the chances of the vehicle being tracked down). As we stated, our car hire excess waiver policy cover your baggage and personal belongings, thus you should also inform the police if any of your valuables were in the vehicle when it was stolen so that they are included in the report.

Once you’ve notified the police, contact the car rental company, let them know what happened and ask for an alternative vehicle.

Keep copies of the police report and any receipts/valuations of your personal belongings that were in the vehicle when it was stolen. You will need these later when you file your claim for reimbursement.

What does third party Rental Vehicle Excess Cover in Australia include?

When you hire a car in Australia, the rental vehicle has CDW, LDW and TP insurance. This insurance you cover you for any damage or even total loss of the car, but you may be liable for any excess payment due.

To reduce your excess liability to zero, you should purchase rental vehicle excess cover that covers accident-related damage, vehicle theft, as well as several kinds of damage usually not covered by vehicle rental firms, such as damage to the windscreen, tire, overhead or underbody and those that result from single-vehicle accidents. By purchasing car rental excess insurance you reduce your excess liability to zero and get peace of mind while renting a vehicle in Australia.

What’s not covered by car rental excess insurance?

We encourage you to carefully read your insurance policy to find out exactly what is and isn’t covered. Check the list of exclusions – for example, Super CDW cover from the car rental company may not cover damage to windscreen, tyres and loss of keys (which are covered by CarInsuRent).

Your car hire excess insurance policy won’t cover you if you breach the terms of your rental agreement. We advise you to make sure you’re fully aware of your responsibilities when renting a car. For example, unless you hire a 4X4, taking your rental car on an unsealed road would probably void your insurance coverage.

Who should get car rental excess insurance?

Anybody who rent a car in Australia should evaluate if the excess detailed in the rental agreement is more than he could afford (or is willing to pay). If you want to rent a car for your trip in Australia and want to drive stress free, knowing that the if the worst happened, excess would be paid by the 3rd party insurer, it might be worth taking out a car hire excess waiver insurance policy.

Is it necessary to buy rental car insurance in Australia?

When you rent a vehicle in Australia, the rental car has Collision Damage, Loss Damage and Theft protection insurance. This insurance you cover you for any damage, but you may be liable for any excess payment due.

Independent 3rd party car rental excess insurance cost up to 70% less than Super CDW offered by the rental company and will cover the excess charged by the rental company for single-vehicle accidents, damage to the tires, windscreen, glass, underbody & roof as well as cover lost, stolen or accidentally damaged valuables, baggage, and personal belongings, all of which are not covered by the Super CDW offered by the rental company.

16 Responses

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  3. Remigio Dalcin says:

    In Canada we need 3rd party liability insurance. Is this included when one rents a car in Australia? Where can I get it.

    • Gil Farkash says:

      3rd party insurance is not mandatory in Australia and not all rental companies include it as part of the rental price.
      We encourage you to check this with your rental company.

      Have a safe trip.
      The CarInsuRent Team

  4. zoritoler imol says:

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    • Gil Farkash says:

      There is no problem on our end.
      I hope that you return and read our useful guides.

      All the best
      The CarInsuRent Team

  5. Hairstyles says:

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  6. Ah-Tuan Tan says:

    I could not enter the Pick up and Drop off date to get a quote in the Get Quote form.

    • Gil Farkash says:

      Dear Ah-Tuan Tan

      Thank you for taking the time to contact us.

      I don’t see any problem on our end.
      I encourage you to clear the cache from your browser, as this may resolve the issue.

      We will try to reach you by email for further assistance.

      All the best,
      The CarInsuRent Team

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  10. health news says:

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  11. Ellen says:

    I cannot find anything on the internet about getting personal liability insurance covering injury, medical expenses, desth, etc. tonself or others when renting a car in Australia. Where donInget such information?

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Frequently Asked Questions (FAQ)

Can I cancel my policy before my trip?

You can cancel your policy within 14 days of receiving your PDS and Certificate of Insurance. The premium you have paid will be refunded to you in full, as long as you have not started your trip and do not want to file a claim of any sort related to the policy. Once this 14-day period has passed, you can still cancel your policy but you will not receive any refund.

Does CarInsuRent cover Sand and Ash Protection and Gravel Protection?

Our Iceland policy include Sand and Ash Protection (SAAP) and Gravel Protection (GP).

What is Sand and Ash Protection (SAAP)?

Sand and Ash Protection (SAAP) is a type of insurance coverage that is designed to protect rental cars from the potential damage caused by volcanic ash and sand in Iceland. Certain areas of Iceland still have loose ash and fine sand from the Eyjafjallajökull eruption, which can blow around and damage vehicles. SAAP is a specific waiver that was created to cover this type of damage, as Icelandic insurance companies do not include it in their Collision Damage Waiver. This coverage is optional, but highly recommended if you plan to drive in Iceland. Camping Iceland, a local car rental company, claims that SAAP will serve you well and recommends it for all rentals.

When is it Common for the Wind to Toss Sand Onto the Roads?

Sand can be hurled onto roads in Iceland during the Sand & Ash period, which typically occurs in February, March, and April. During this time, the snow has only just thawed out and the grass hasn't grown sufficiently to keep the sand in its place. This can lead to damage to vehicles driving on the roads. It's important to note that sand and dust storms, which can also cause visibility issues for drivers, typically occur when strong winds lift large amounts of sand and dust from bare, dry soils into the atmosphere.

What does CarInsurent Sand and Ash Protection in Iceland cover?

Due to the recent volcanic eruptions in Iceland the risk of damage to the paint and windows of the cars has increased. Our Sand and Ash Protection (SAAP) insurance can cover damage to the paint, windows, lights, plastics, chromes, and wheels of the rental car caused by sand, gravel, ash, pumice, or other earth materials being blown onto the vehicle. The deductible for SAAP insurance is typically 50,000 IKR for all rental cars in the fleet. No other insurance covers these damages and insurance companies refuse to cover them. Even though all safety rules are followed damage can happen when, for example, wind starts blowing more than was forecasted thus moving the sand/ash and damaging the car.   [carInsurent_sc_get_quote_cta cta_text="See How Much You Can Save on Your Car Rental Insurence" cta_btn_text="Get Started"]  

Does the Insurance Cover Lost Keys and Remote Locking Devices?

Yes. CarInsuRent insurance covers lost keys and remote locking devices. Losing the keys to a rental car can be a stressful and frustrating experience. Many people wonder if their rental car insurance will provide coverage for lost keys. Rental car insurance policies may vary in their coverage for lost keys. Lost keys are not typically covered by car insurance for loss or theft, as keys are considered personal property.

Steps to Take If You Lose Rental Car Keys

Losing rental car keys can be a frustrating and stressful experience, but there are steps you can take to get back on the road quickly. Here are some tips based on the provided web search results:
  1. Contact roadside assistance: Most rental cars come with a roadside assistance phone number that you can call in the event of a lockout or lost keys. You should be able to call and have someone sent out to help with your situation. Note that our car hire excess waiver insurance may reimburse you for roadside assistance.
  2. Check for a spare key: Some rental cars come with a spare key that is located in a magnetic box under the car or in the trunk. If you have rented a car that has a spare key, this could be an option to get back on the road quickly.
  3. Contact the rental car company: Contact the rental car company as soon as possible to let them know what has happened. They may be able to provide you with a replacement key or arrange for a locksmith to come and assist you.
  4. Check your insurance policy: If you take out our car hire excess insurance you may have coverage for lost or stolen rental car keys.
  5. Take preventative measures: One of the best ways to avoid losing rental car keys is to make them harder to lose. Attach a big, noticeable lanyard or keychain to the keys, something that will make a noise when moved, to help you locate them quickly. Additionally, always double-check that you have the keys with you before leaving the car.
  We encourage you to read our full guide to learn everything you need to know about travel car hire excess insurance.   [carInsurent_sc_get_quote_cta cta_text="See How Much You Can Save on Your Car Rental Insurence" cta_btn_text="Get Started"]   Please see the Policy Wording for the complete terms and conditions.

Find the answers you’re looking for to the most frequently asked car hire insurance questions as well as other questions relating to our products and services.

Visit the FAQ page