How to save on car rental insurance | report

Car rental insurance can cost up to five times more over the counter.

We've all been there - at the end of a long flight you front up to the car hire counter, and among the pile of paperwork you are confronted with a dazzling array of insurance options.

From behind the counter, the assistant will attempt to sell you varying degrees of peace of mind.

However, this peace of mind could end up costing you up to five times more than basic travel insurance, according to new research by consumer watchdog CHOICE.

According to the report, many hire car companies will charge between $19 and $34 per day for insurance, whereas basic travel insurance can provide similar coverage over five days for $35.

It was also found that hire car insurance policies often contain exclusions for many common problems that can arise while driving, such as broken windscreens and punctured tyres.

Driving outside of towns in Western Australia or the Northern Territory after sunset could also leave consumers without coverage, as could driving on unsealed roads or refilling with the wrong fuel.

CHOICE Head of Media, Tom Godfrey, advises consumers to consider all their options when taking out insurance on a rental car.

"We’ve all felt the pressure to get insurance when hiring a car but the reality is if you’ve taken out travel insurance you can save yourself a lot of money by slamming the door on it," he said.

"You can also save money by checking to see if you already have coverage through your credit card, as some products include travel and car hire insurance. For example, the ANZ Platinum cards include up to $5000 in coverage for car hire excess."

Regardless of which insurance policy you opt for, the watchdog advises "you should always read the terms and conditions and make note of the exclusions".

CarsGuide does not operate under an Australian financial services licence and relies on the exemption available under section 911A(2)(eb) of the Corporations Act 2001 (Cth) in respect of any advice given. Any advice on this site is general in nature and does not take into consideration your objectives, financial situation or needs. Before making a decision please consider these and the relevant Product Disclosure Statement.