Car Rental Insurance Excess

You arrange to rent a car for your holiday for around $40/day; when you get there they want to charge you another $30/day to remove a $4,000 excess in case you have an accident.

So should you pay?

My travel hack answer is NO! . . . . . and here are two reasons why I haven’t paid.

Self Insure

Well $30 a day would work out at $10,950/year . . . . When I put it like that would you really pay that amount to cover a risk of a $4,000 excess?

About the year 2000 I decided that as I drive regularly and reckon I only have an insurance claim less than every ten years I would take the risk for the 30 days a year I rent a car.

After ten years I estimated I saved $9,000, and even if I had been in an accident and paid an excess I would still have saved $5,000.

Travel Insurance

If you have travel insurance you will probably find it covers car rental excess.

Here is what my year round travel policy says:

RENTAL VEHICLE INSURANCE EXCESS. The cover under this section begins when you leave your home in Australia to start your trip and ends when you return to your home in Australia or when the period of insurance ends, whichever happens first.

We will cover you for the rental vehicle insurance excess, or the cost of repairing the rental vehicle, whichever is lower, if

(a) you rent a rental vehicle from a rental company; and

(b it is damaged by accident, storm, fire or theft; and

(c) you are a nominated driver on the rental vehicle agreement.

This is a premium credit card insurance which covers me for car hire both around Australia and for overseas travel. . . . . Check you insurance policy or credit card policy for details of your cover.

Few Bargains at Duty Free

Now with many countries having Goods and Services Tax (GST)
or the similar Value Added Tax (VAT) the tax saving advantage of Duty Free on most goods is only 10-15%.

When you buy at airport shops you may be avoiding duty (including sales taxes) but the rents at these stores are astronomic.

The owners reflect the higher rent, and empoying people 24hours by increasing prices

What Is Cheaper?

Generally anything that has extra taxes if you buy outside the airport.

I find spirits and Liqueurs are about 1/3rd cheaper , typically you get a 1 litre bottle for the same cost as a 0.75 litre bottle at my local supermarket.

With wine there may be a little saving, but without comparative pricing you won’t know.

For the smokers tobacco products give a similar saving to spirits.

What’s Not Cheaper

I haven’t bought my wife duty free perfume for 15 years after I found I could have saved about 40% by buying it at the local discount chemist.

I would expect the same would apply to after shave and most cosmetics.

Chocolates and small gifts will be more expensive.

Electrical goods can often be bought at a local discount store at similar prices and if you have any problems warranty claims are much easier to manage.

Before you buy overseas remember that appliances bought in different countries may not be right for your local power.

Tourist Refund Schemes

The last laptop I bought was from an Australian store just before we went overseas. I presented the laptop and the receipt on my way out and got a refund of 15% which I was very happy with.

Other countries may have similar schemes, although not as easy as Australia’s.

My Travel Hacks

  • Plan to buy Liqueur, in my case Kahlua.
  • Use the Tourist Refund Scheme
  • Know my local prices for anything else.

Flight Booking Sites

All the flight booking websites tell you they find the cheapest flights.

What they really mean is that they find you the cheapest airline that pay them a booking fee.

Often there are cheaper options, but its knowing where to look.

Google Flights

One site I regularly use is Google Flights.

The reason I prefer their site is they do tell you if there are airlines that fly the route, even if they don’t pay a commision.

For example check this screen shot from a flight search from Chicago to Los Angeles.

You will see that there are a couple of flights listed by South West as ‘Price Unavailable’

Southwest is a large American budget airline that doesn’t pay commission to websites.

Unlike many budget airlines their standard fares booked on their own website include checked bags.

Disclaimer I haven’t been paid or received any other reward for this post

How do you find the cheapest flights

Why I Have A Premium Credit Card

For the last three years I have been happy to pay hundreds of dollars for a Premium Credit Card.

Travel Insurance

As I travel overseas at least twice a year I used to pay over $300 for an annual travel insurance policy. ( For more than one trip a year an annual policy is less than buying a policy for each trip)

I now pay less than the cost of the annual premium and get the added benefit of a better rate of frequent flyer points for my personal spending.

Check The Policy First!

Not all premium credit card insurance policies are the same.

Some only cover the card holder (including one of the big name cards), others like mine, cover the card holder plus anyone travelling with the card holder.

The amount of cover for various risks does vary from card to card.

Also the amount of holiday spend to activate the cover can vary. (Very important if you are paying for a flight using frequent flyer points)

Standard Cards

Yes, some standard card have travel insurance, but most of the policies don’t offer a high enough level of cover for me.

Bonus Points

I received a ‘signing on’ bonus of 100,000 points which can take you a long way

Other Benefits

Many premium credit cards do offer a range of benefits including ; discounted or free flights, airport lounge passes, concierge services.

For me the travel insurance is the main reason for choosing a premium card but these benefits may be of additional value to you.

Disclaimer
I have not been paid or received any other benefit from this post. I do not recommend a particular credit card provider.