The right car hire excess policy could help you save money by covering the high excesses charged by car rental companies.

Most hire companies set an excess for minor damage, which could cost as much as £1,000. For example, knocks or scratches, even if the damage is not your fault.

Check the excess on your car hire agreement. If it is more than you could afford to pay if the car was damaged, you may need an excess insurance policy to cover the cost.

How to get the cheapest cover

Avoid buying excess insurance from your car hire company, because you can usually get a better deal by shopping around.

Check that buying separate excess insurance does not break the terms of your hire car agreement. If it does, it could mean any claims you make will not be paid.

Get quotes from different insurers, so you can get the cover you need at the cheapest price. You should compare the:

  • Policy type: You can choose between daily and annual car hire cover. If you rent a car for a short time, daily cover is cheapest. However, if you regularly hire cars, an annual policy could save you money.

  • Maximum cover: This is the most an insurer will pay out if you claim, so choose enough to cover your car hire excess. If you take out annual cover, consider a higher limit in case you need to claim more than once.

  • Cost: Depending on the type of cover, this will be charged daily or annually. If you need an annual policy, you may be able to split the premium by monthly direct debit, although this may cost more.