Holidaymakers urged to avoid rip off insurance excess waivers

Holidaymakers are being urged to avoid overpriced insurance excess waivers offered by car hire firms, as new research by Which? reveals they could be charged up to twelve times more than for superior alternatives available online.

Which? has found that car hire companies operating in Malaga, Spain, such as Alamo, Avis, Budget, Enterprise, Europcar, and Goldcar, are charging up to £199 for their Super Collision Damage Waivers (SCDWs).

These policies, though expensive, offer inferior coverage compared to Excess Reimbursement Insurance (ERI) policies, which can be purchased online for as little as £16.

Basic insurance is included in the rental price when hiring a car in Europe, but it is subject to an excess.

If the car is damaged, holidaymakers must pay a contribution towards repair costs.

To mitigate this, travellers can either purchase an SCDW from their rental firm or buy an ERI from a third party, which allows them to claim the excess back.

On average, a week’s cover with an SCDW in Malaga this summer costs £177, whereas an ERI from a broker is £38, and purchasing directly from an insurer costs just £23.

Not only are SCDWs more expensive, but they also offer poor coverage. Budget and Avis’s SCDW policies scored just 41%, the lowest among the companies surveyed.

Budget’s policy, the most expensive at £199, does not cover essential aspects like underbody damage, misfuelling, or lost keys.

Goldcar’s policy, costing £193, also performed poorly, covering few essential elements and requiring additional charges for items like tyres, mirrors, and locks.

Other firms such as Alamo, Enterprise, and Europcar also received low scores, failing to offer comprehensive coverage.

In contrast, ERIs purchased directly from insurers scored significantly higher, with Cover4rentals.com’s Gold policy and Worldwide Insure’s Deluxe policy both achieving top marks.

The Cover4rentals.com policy, costing £16, includes £10,000 overall claim limit and covers misfuelling, towing costs, lost keys, and personal belongings.

Worldwide Insure’s Deluxe policy, priced at £24, has a £50,000 claim limit and comprehensive coverage for common issues.

Rory Boland, Editor of Which? Travel, advises, “Hiring a car abroad can be unnecessarily stressful, with travellers pressured into buying overpriced insurance policies. Our research shows you should never take excess insurance from your car hire firm. Buy an ERI directly from an insurer or via your car hire broker. These policies are cheaper and more comprehensive, giving you peace of mind should anything go wrong.”