In short
- Excess insurance is a policy from an insurer, not the rental company, that pays some or all of a hire car's excess. Some travel policies and credit cards include it.[1]
- Read the PDS for the limit, the length of rental it allows, its own excess, the drivers it covers and whether it pays you or the rental company.[3]
- It may not pay where the rental terms make you liable beyond the excess: at Rentzy, the clause 9.3 cases, on top of the A$2,500 per-incident excess.
- Rentzy doesn't sell excess insurance or excess reduction, charges you rather than your insurer, and still takes the bond at pickup.
- If an insurer refuses a claim, complain to it, then to AFCA, which is free.[5]
What is rental car excess insurance?
It's an insurance policy, separate from the hire contract, that pays some or all of the excess a rental company can charge you after damage or theft. The ACCC notes that a car hire contract will usually leave you uncovered for certain types of damage, or make you pay extra for that cover, and that some travel insurance policies and credit cards may include hire car excess cover.[1]
So the cover usually comes from one of three places:
- A travel insurance policy. Moneysmart lists car hire among the things most travel policies cover, and says the level of cover changes between domestic and international trips.[3]
- A credit card's complimentary insurance. Usually tied to paying for the trip with the card (conditions below).
- A policy bought separately for the hire. You buy it yourself; it is not part of the rental agreement.
It is different from the rental company's own "extra cover" or liability reduction product, which changes what the rental contract makes you liable for. The ACCC's industry guide says that when a business sells that kind of product, customers should be able to understand its exceptions.[2] If the terms bond, deposit and excess are new, start with the bond, deposit and excess guide.
What should you check in the policy before you rely on it?
Moneysmart's advice for any travel policy is to read the product disclosure statement (PDS) carefully, compare inclusions, limits and exclusions, and check you can afford the policy's own excess if something goes wrong.[3] For hire car excess cover, these are the questions that decide whether it helps:
- The limit. Is the most it pays at least the A$2,500 excess? Is the limit per incident or for the whole policy?
- The car and the trip. Does it apply in Australia, to a car hired where you live, and for a rental lasting weeks rather than days?
- Who pays whom. Does the insurer pay the rental company, or reimburse you after you've paid? What evidence does it want?
- Its own excess. Moneysmart describes an excess as the amount you pay when you make a claim, so a policy can carry one of its own.[4]
- Drivers. Is a second driver on the rental also covered?
Moneysmart also warns that an insurer may decline a claim if, at the time, you were drunk, affected by drugs or doing something illegal, even where the event itself is covered.[3]
Where does excess cover usually stop?
The weak point is damage the rental contract doesn't treat as capped. The ACCC suggests asking whether there are gaps in a hire company's liability coverage (single-car accidents are sometimes not covered) and, if so, whether your travel insurance covers them.[1] Its industry guide describes disputes where customers paid for cover with a name suggesting total protection, then damaged a roof and were told the contract made them liable.[2]
At Rentzy, the case where this matters is clause 9.3 of the rental terms. At the time of writing, in the situations it lists, the excess limit falls away and you're liable for the full loss and for anything Rentzy's insurer refuses or recovers. A policy written to pay "the excess" may not stretch to a full repair bill, so ask the insurer how it treats each one:
| Situation in clause 9.3 | Ask the insurer |
|---|---|
| A breach of the driver rules or the prohibited uses (clauses 2 and 7.2) | Is a breach of the hire agreement an exclusion? |
| Driving affected by alcohol or drugs, or unlicensed | Is this excluded outright? |
| Overhead or underbody damage, or water damage from driving through water | Are roof, underbody and flood damage covered? |
| Wrong fuel; tyres, windscreen or keys damaged or lost through misuse | Are these parts covered at all? |
| Not reporting the incident, or not cooperating with Rentzy and its insurer | What notice does the policy itself require? |
| Keys left in or near an unattended car | Is theft with the keys left behind covered? |
Clause 9.4 can add rent lost while the car is off the road for damage you're liable for, up to the limit it sets. Check whether a policy pays loss of use as well as the excess.
What happens at Rentzy if the car is damaged and you have cover?
- Report the damage to Rentzy straight away, as clause 9.1 requires. Your insurer will probably want early notice too: Moneysmart notes that some travel insurers require incidents to be reported within 24 hours.[3]
- After the car is back, it's inspected within 48 hours, and any damage charge is itemised and sent to you with the evidence. You have 72 hours to dispute it before it's collected (clause 10).
- Approved charges come out of the bond first (A$500), and any balance is payable to Rentzy.
- You then claim from your insurer, using Rentzy's itemised charge and evidence. Rentzy charges you, not your insurer, and doesn't deal with insurers on a renter's behalf.
What to do at the scene, and who to call, is in an accident in a rental car in Queensland.
Do you already have cover?
Possibly, through a travel policy or a card. Credit card insurance usually needs travel costs paid on the card, may cover only the cardholder, and generally applies only to the trip paid that way.[3] Before buying a separate policy, read what your existing ones say about hire cars: does your own car insurance cover a rental car? goes through motor, travel and card cover in turn.
What if the insurer refuses the claim?
Complain to the insurer first. Moneysmart says the General Insurance Code of Practice sets out how insurers should handle claims, and that if you can't reach agreement you can take it to the Australian Financial Complaints Authority (AFCA) for free, independent dispute resolution.[3]
AFCA considers complaints about general insurance, including travel insurance. Its examples include disputes about liability for a car accident or an insurance excess, and the denial of a claim. You can complain online, by letter, by email or on 1800 931 678 (free call).[5]
A disagreement with Rentzy about the charge itself is separate: use the dispute window in clause 10 (72 hours) and your rights under the Australian Consumer Law, which clause 13 keeps in place.
Sources
- Australian Competition and Consumer Commission (ACCC): Car hire (read 23 October 2026)
- Australian Competition and Consumer Commission and state and territory consumer agencies: Rental cars: An industry guide to the Australian Consumer Law (read 23 October 2026)
- Moneysmart (Australian Securities and Investments Commission): Travel insurance (read 23 October 2026)
- Moneysmart (Australian Securities and Investments Commission): Choosing car insurance (read 23 October 2026)
- Australian Financial Complaints Authority (AFCA): Insurance complaints (read 23 October 2026)
Written by the Rentzy team at Rentzy Car Rentals. Rentzy prices, fees and rules in this guide come from our published terms and update with them; rules set by others (roads, tolls, licences, transport) are from the official pages above, as read on the dates shown. Something out of date? Tell us.
