Rental car insurance in Australia
What is rental car insurance?
‘Rental car insurance’ isn’t a specific product and could mean different things to you depending on the situation that has got you searching. Some car insurance policies include cover for hire car expenses in some circumstances, depending on your level of cover. Your policy may help with the cost of hiring a rental vehicle if your car has been stolen or damaged. Additional cover for your excess payment if your hire car is damaged may also be available.
If you’re travelling, you may be looking for ways to protect yourself from loss associated with a rental vehicle. In this case, you should be looking for rental car excess cover instead.
How does car insurance cover rental cars?
What is included?
Cover for rental cars will vary depending on what level of cover you have. While cover will vary between insurers and policies, as an example, an insurer may offer the following cover for each car insurance type:
| Policy inclusions | Third Party Property Damage | Third Party Property, Fire and Theft | Comprehensive |
|---|---|---|---|
| Rental vehicle after car theft | ✗ | ✓ | ✓ |
| Rental vehicle after a not-at-fault car accident | ✗ | ✗ | ✓ |
| Rental vehicle after an at-fault car accident | ✗ | ✗ | Optional |
If you take out comprehensive cover with a hire car optional add-on, you may be covered for the rental of a hire car if you’re in an accident where you’re at fault or your car is damaged by fire or severe weather and needs repairs.
Read the Product Disclosure Statement (PDS) for the full details on what your policy includes. You can also read the Target Market Determination (TMD) to understand whether or not a policy is suitable to your needs.
What is excluded?
When it comes to car insurance with rental car coverage, there are a few exclusions you should keep in mind when wanting to claim:
- You were found at-fault of the accident. If your insurer finds that you were partially, or entirely at-fault for an accident, you may not receive any coverage for hiring a rental vehicle, unless you’d already purchased it as an optional extra.
- You arranged your own hire car without your insurer’s approval. In most cases, your insurer will arrange your hire car for you. If you arrange it yourself, you may receive less or no cover for the cost of hiring your rental vehicle.
- Other hire car expenses. You likely won’t be covered for the cost of fuel, insurance for your hire car or the hire car excess if you get into an accident and need to pay damages.
How long is my hire car covered for?
Many insurers may only cover up to 14 days of car hire. However, depending on your insurer, these days may not have to be consecutive. For example, if the damages to your car are expected to take several months to repair, you may choose to only take out a hire car on the weekends. This way you would only use two of the allotted 14 days of car hire each week. Remember to always check your PDS to understand what your policy covers you for as this can vary between insurers.
What’s the difference between hire car cover through car insurance and travel insurance with rental excess cover?
Car insurance that covers the cost of a rental car is for when your own car is unable to be driven in covered circumstances and you need a replacement, while travel insurance covers the excess amount you may need to pay to a rental company if you damage a rental car that you’ve hired for your travels.
Some comprehensive international policies will offer car rental excess cover as a policy inclusion, or it may be purchased as an optional extra for your policy. Domestic policies generally include this cover automatically but may be subject to restrictions.
Meet our car insurance expert, Adrian Taylor
As a General Insurance expert with over 13 years’ experience in financial services, Adrian Taylor is passionate about demystifying car insurance for consumers, so they have a better understanding of what they’re covered for. Adrian’s goal is to make more information available from more insurers, to make it easier to compare and save.