Car Rental Insurance Guide in Australia

Visiting Australia for business or pleasure? Well, either way you are very likely to find yourself in need of a reliable Australia car rental insurance when you are renting out a car there. Rental insurance is built to cover expenses you incur for damaging rented car, such as major car dents, self-injury, death, and other eventualities. However, insuring a car in Australia needs a similar level of craftsmanship as hiring it. Thus, you should know the most relevant of these insurances, depending on the circumstances that border around the rental.

Here they are… 

Car Hire Excess Insurance

This insurance is designed to protect you from overpaying for car damage, theft or injury. Whether you are Australian, in need of a rented car because yours is at repair or a visitor renting for other reasons, either way, a car hire excess insurance covers you for as long as needed.

Aside from its general serviceability, car hire excess insurance often comes with a unique flexibility. So much that you may choose to buy the insurance once in a year or at several instances which of course offers fewer incentives and discounts.

Experts in this field often advice users to avoid Rental Companies’ car hire excess waiver insurance in Australia. This because it’s quite pricey and unnecessary when independent collision damage waiver comes with a rather friendly fee.

This is good for you, since a car accident is a 50/50 chance, if you end up returning the car clean, your loss would be a lot higher with rental company’s excess insurance. 

Collision Damage Waiver (CDW) 

This insurance offers you some reduction on Collision only, or in other cases, Collision and theft (loss damage waiver).

It’s a legal requirement in Australia that Rental Companies offer a CDW with other insurances. However, if this becomes excessively high for you, you may seek an independent Insurance company. 

It is noteworthy that the Car Hire Excess and the Collision Damage Waiver might be ineffective if you break the agreement terms, such as:

  1. Dents you failed to note in the damage report, which might have occurred before you left the company premises
  2. Damaging parts not covered by the insurance, such as tires and undercarriage. 
  3. General damage to the vehicle during your rental and failing to register it.  
  4. Car damaged by an unauthorized driver
  5. Use of an unregistered accessory, such as baby seats or GPS where such liberty is not granted. 

The bad thing about these factors is that they are often not stated as clearly as one would assume such important factors should be. Thus the onus is on you as a user to stay aware and ask questions as needed. 

Also, you should delay all paper signing until you are 99% sure you have all dents registered, both before taking the car and after returning it. This, you may do ineffectively if you are not aware insurance policies that count. 

Buy An Auto Insurance Or Rental Car Insurance. 

Now, a lot of users don’t know this and of course, for profit, your rental company would not tell you.

If you have auto insurance from your home country with a multinational vendor, that has a presence in Australia as well, your insurance is to some extent covered. 

This means you may not need to buy your rental company’s insurance at all, and even if you must, you’d be paying less since your auto insurance company is granted recognition. 

The Credit Card Tweak

Some credit cards come with policies that cover your rental insurance. About 26 credit card providers offer this incentive with some being effective only in Australia and others have their tentacles in foreign countries as well. However, some conditions have to be fulfilled. For instance, some issuers need the user to be a permanent resident in Australia, e.g. ANZ. 

Other conditions include the need to charge your travel or accommodation costs to the card issued, as practiced by Bendigo Bank with its platinum rewards Master card, CITI and a host of other issuers. Ultimately, you must know the incentives offered by these issuers and choose your credit card based on which one favors your need to hire a vehicle the most. 


Insuring a hired car in Australia is just as technical as in other countries, therefore you need a general knowledge of the car rental system and insurances that hovers around each. But to walk your way through the car insurance system in Australia, you should put the above information into consideration.  

Thanks for reading. 

Olivia Watson

Olivia is a world traveler who has been to 27 countries in just over 15 years. She loves to share her knowledge of traveling to help others travel safer, cheaper and have more fun.
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