Which? warns holidaymakers to avoid rip off insurance excess waivers


Which? warns holidaymakers to avoid rip-off insurance excess waivers offered by car hire firms – as it finds them charging up to 12 times more than superior alternatives.

Which? analysis reveals holidaymakers could be charged up to £199 for inferior excess waivers at the car hire desk – when superior policies are available online for as little as £16.

Which? analysed the standard of cover provided by Super Collision Damage Waivers (SCDWs) from six of the major car hire firms operating in Malaga, Spain – Alamo, Avis, Budget, Enterprise, Europcar, Goldcar – and compared this with the level of cover offered by Excess Reimbursement Insurance (ERI) policies both directly from insurers and from a number of car hire brokers, including Which? Recommended Provider Zest Car Hire.

When travellers hire a car in Europe, they don’t need to buy any additional insurance, as basic insurance is always included in the rental price. However, that insurance is subject to an ‘excess’, so if the car is damaged it can be necessary to pay a contribution towards repair costs, regardless of who is at fault.

Data from Zest Car Rental suggests that typically holidaymakers could be charged hundreds of euros depending on the issue – common issues like a puncture could cost as much as €300 to rectify, while a replacement windscreen can cost around €750.

To mitigate that, there are two options – purchase an SCDW policy from your rental firm, which removes or reduces the excess, or buy an ERI from a third party (either directly from an insurer, or via your car hire broker) which allows you to claim the excess back.

On average, Which? found for a week’s cover in Malaga this summer, holidaymakers would pay £177 for a SCDW from their car hire firm, compared to £38 for an ERI from a broker, and just £23 if purchasing directly from an insurer.

Not only are SCDWs massively more expensive, but they are inferior too. Which? analysed six car hire companies SCDW to find out how comprehensive the cover was. All were rated poorly. 

Budget and Avis’s SCDW policies are the joint lowest rated, with abysmal policy scores of just 41 per cent.

At an eye-watering £199, Budget’s policy was the most expensive that Which? looked at – whether ERI or SCDW. Yet despite the hefty price tag, the consumer association found the cover offered to be inferior. Damage to the underbody of the car, misfuelling, cover for lost or stolen keys, curtailment cover and cover for drop-off charges (when you are unable to return the car) are all absent, while towing costs and personal belongings cover are optional extras at an additional charge. The same is true of Avis.

Close behind is Goldcar, with a policy score of just 44 per cent. At £193 it is the second most expensive policy that Which? analysed, but it doesn’t cover misfuelling, personal belongings, lost or stolen keys or curtailment. Cover for tyres, mirrors and locks is optional at an extra charge.

The remaining car hire firms also failed to impress, with Alamo and Enterprise tied on 49 percent, and Europcar receiving a 55 percent score. In contrast, more than half of the ERIs purchased directly from insurers scored  70 per cent or higher. 

Many of the best ERI policies Which? looked at are available directly from insurers. These include Cover4rentals.com’s Gold policy and Worldwide Insure’s Deluxe policy, tied on 80 per cent.

At just £16, Cover4rental.com’s top-rated Gold policy is the second cheapest policy Which? checked, and is ten times cheaper than most of the SCDW policies. It has a £10,000 overall claim limit and highlights include £1,000 misfuelling cover, £1,000 for towing costs, £750 key cover and £500 personal belongings cover.

Worldwide Insure’s Deluxe policy (£24) has a £50,000 overall claim limit, the highest of any policies the consumer assocation checked. It offers £500 misfuelling cover, £500 key cover, £500 towing costs and £300 personal belonging cover.

Other highly rated ERIs available directly from insurers include Reducemyexcess, with a policy score of 78 per cent and icarhireinsurance.com with a policy score of 76 per cent.

ERI policies sold by car hire brokers and comparison sites were also fairly mediocre, with four out of six scoring 58 per cent or less. The exceptions were policies sold by Booking.com/Rentalcars.com (83%) and Which? Recommended Provider Zest Car Rental (75%).

Says Rory Boland, Editor of Which? Travel: 

“All too often hiring a car abroad is an unnecessarily stressful experience, with travellers sometimes pressured at the rental desk into buying overpriced insurance policies that they don’t want or need. 

“What our research shows is that you should never take excess insurance from your car hire firm, no matter how hard the sell. Buy an ERI either directly from an insurer or via your car hire broker. The top rated policies are a win-win – not only are they significantly cheaper than anything offered by a car hire company, but they are also more comprehensive, meaning you have peace of mind should anything go wrong.”

Chris Price
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