Excess insurance cover when renting a car abroad – facts about taking out additional excess waiver insurance in Spain

Rental car companies in Spain, Portugal, France, Croatia, Greece and Italy have seen business booming.

Never before have so many customers flocked to the cheap car rental deals available online. Spain is particularly popular with huge numbers of holiday makers arriving in Malaga Airport, Alicante Airport and on the popular islands of Majorca, Ibiza and Lanzarote - and later in the year on Tenerife, Fuerteventura and Gran Canaria.

One recurring question when renting a car abroad, is how the car hire insurance work. In other words: How well are you covered in case of damage or theft of your hire car?

Cheap rental car in Spain  - often with high insurance excess on damage and  theft

The ’bad boys’ of the car rental industry
Horror stories about customers being cheated by unscrupulous car rental companies have been rife.

In 2017, Europcar got a lot of bad press for offering staff incentives to report damages, but winner of the prize for being the most untrustworthy company in the business measured on complaints is still Goldcar; which incidentally was taken over by no other than Europcar in 2017.

Below you find our advice for taking out excess waiver insurance when hiring a car in Southern Europe. Spain is chosen as example, but the facts to consider are the same in Portugal, France, Croatia, Italy, Greece etc.

Renting a car in Spain – insurance options (excess waiver insurance)
Spain is the most popular holiday destination in Europe.

A few years back, the excess on insurance when renting a car in Spain was, usually, very low indeed. In 2017-2018, things have changed. With the arrival of companies like Goldcar, a much more commercial approach to ’extras’ and options like additional insurance sale has been introduced at most rent-a-car companies in Spain.

In general, basic rental rates for cars in Spain are extremely low. You can hire a small (mini or economy) car for very small money in popular destinations like Majorca, Tenerife, Gran Canaria, Malaga Airport or Alicante Airport.

The excess used to be maybe €200, €300 or €500 in Spain. In year 2018, you are more likely to see excess on car hire in the region of €1200 or €1500 on smaller cars from the so-called low cost companies like Goldcar, Interrent, Flizzr or Firefly. 

Increases in the excess amounts when renting a car have no logic other than making the prices for car rental in Spain totally impossible for customers to compare based on listed (and advertised) rates for rentals.

Not only the excess has increased dramatically. Additional fees for young/old driver, extra driver, children chair/booster and similar options at the car rental desk have increased as well.

Excess waiver insurance – what does it mean and how does it work?
Most motor car owners will have excess on their vehicle insurance.

Excess is the amount which, as a customer, you will be asked to pay, if you have a damage or if your vehicle is stolen. Frequently, the excess for theft and the excess for damage differ.

If, as a car owner, you sign up for car insurance with excess, it offers you a saving compared to car insurance without excess.

When looking at car rental, it works in the same way. Standard hire car insurance will almost always include excess for theft and damage. When renting a car in Spain, it is virtually impossible to find offers with ’zero excess’.

What happens in case of damage on a rental car in Spain is that the rental provider will deduct the excess amount in the customer’s security deposit. If, for instance, the car is returned with a scratch in the paintwork, the rental car company will charge the customer’s credit card with the cost – and unfortunately, sometimes, very inflated cost of repairs. Maximum amount to be charged is the amount of customers security deposit blocked on the customer’s credit card at the rental desk before the customer has received keys for the car.  

If the cost of damage is higher than the excess, only the excess amount is charged. It is often seen that the car hire security deposit equals the excess, but by no means it is always the case.

Waving the excess  - extra coverage in an option
If customers want to waive the excess, it comes at a price.

The term for this product, in general, is excess insurance. Sometimes the product is referred to as excess waiver insurance.

There are numerous general and individual circumstances which can speak both for and against taking out excess insurance.

How to take out excess insurance and how does it work with payments?
The excess is the first part of any claim that you are required to pay yourself. If you want to avoid potential excess payment, you have the following options:

1) When booking at www.find-cheap-car-hire.co.ukexcess waiver insurance is always offered through the insurer AXA (car rentals in Europe and the UK).

The daily price/premium is usually between £3 and £8. For longer periods of rental, you may get rates for excess insurance in the lower end of the range, whereas short rentals usually are slightly more expensive per day.

2) At the rental desk at the destination (airport counter)
Almost all car rental companies offer excess insurance at the rental desk. The sale of this insurance product is highly profitable and, therefore, incentivised to a degree that at some rental companies in for example Spain, the customer is put under pressure by staff  to accept the extra charge.

The premium (price of excess  insurance) is calculated per day. Often, there will be a maximum amount (total premium) which can be rather high at rental desks.

Usual price/premium per day for excess insurance at the rental desk in Spain is between £8 and £12 per day.  Maximum is often €200 (some £180-200). ’Insane’ daily rates between £12 and £20 are seen as well.

How to evaluate excess insurance
At the destination, at the counter, evaluation of pro’s and con’s in the excess insurance policy is almost impossible to carry out.

Very often, the policy will only be available in Spanish. It is a clear sign that something may be hidden. For instance, in a number of excess policies sold at the counter, damage to undercarriage is not covered. It is also frequently written in the Spanish terms & conditions that damage to tyres are not covered. Even damage to glass and lights can be excluded from coverage in some excess insurances sold at the counter in Spain.

The expensive loss of key and the equally expensive  wrong fuel filling are other areas worth questioning about before taking out excess insurance.

AXA assists customers with damage claims in English.

AXA excess insurance for UK based customers taken out at booking online has the following coverage (summary as per August  2017):

• Theft of car - £ 2.500 (maximum coverage)
• Lost key - £ 450
• Wrong fuel /misfuelling - £ 250
• Damage to tyres - £ 80
• Damage to undercarriage - £ 400
• Damage to glass and windows (including lights and sunroof) - £ 650
• Damage to roof - £ 500
• Roadside and towing - £250
• Theft of personal belongings in car - £125 per item (max total £ 250)

Please note that all amounts (subject to AXA conditions)  require the insured customer to have UK address. The above amounts are subject to the conditions in the Damage refund AXA policy being met.

In almost all excess insurance deals offered at the counter , there will be no cover for personal belongings.

Is it cheap ? – or is it at all advantageous?
As a rule of thumb, it is nearly always much cheaper to buy excess insurance online; either at booking or as a separate cover for multiple trips abroad.

Is the AXA excess insurance policy in English?
AXA will provide the excess insurance policy in the language of the customer’s country of residence.

If the rental is cancelled, the excess insurance is automatically cancelled as well. You will not have to give separate notice of cancellation, and cancellation  is, naturally, free of charge.

Claims and damages
If a damage occur, the claim is sent by email to AXA, which will refund the client according to the insurance policy.

If a damage occur when having a local excess insurance taken out at the rental desk in Spain, the claim is settled and the case closed immediately if the conditions for coverage is met.

When taking out insurance for excess with AXA, you need to hand in your claim. The procedure is simple, but obviously cannot take place before returning  home. As a result, the Spanish rental car company will keep the excess (or part thereof). Refund will take place directly from AXA.

IMPORTANT:If you take out insurance for excess with AXA, remember to say ’no thanks’ to the sales person at the rental desk.