Accident Excess Reduction Guide for Budget Australia

Hiccup-Insurance-airport-car-rental-desk

When renting a car from Budget for travel within Australia, what is your financial liability if damage occurs to the hire car while it is in your possession?

This article looks at the liability and costs associated with hiring a car from Budget Australia.

What is your responsibility when renting a car from Budget?

On their website, Budget define the renter’s responsibility as “ from the time you (or your nominated driver in the rental agreement) take charge of a rental vehicle, you are financially responsible for any loss or damage to the vehicle or any loss or damage to third party property as a result of using the vehicle. The renter’s responsibility also includes damage caused by acts of nature such as hailstorms or falling trees.”

On their website, Budget advise that the renter’s liability (excess) varies based on the category of the vehicle and the age of the driver.

A summary of the rental vehicle excess and additional charges applicable when renting a car from Budget Australia are listed in the table below.

Budget-RVE-Charges-summary

So, the total renter liability when hiring a car in Australia from Budget =

rental vehicle excess + GST + premium location surcharge + underbody, overhead, tyre or water damage (where relevant) + recovery costs

What are premium location surcharges?

Premium location surcharge is an additional cost (expressed as a percentage) that is added to rental charges to reflect the car rental companies increased costs to operate a certain depot location. For example, airport depots often attract a higher premium location surcharge due to the higher costs and airport levies that the car rental company must pay as part of their airport operations.

Premium location surcharges are applicable for airports, CBD and rural rental car depot locations. As at October 2014, Budget’s premium location surcharges ranged between 1% and 24% of the rental car charges.

As an example, the premium location surcharge rates for Australian capital city airports are shown below.

Budget-Premium-Location-Table

Overhead, underbody and water damage are excluded from the rental vehicle excess amount.

Irrespective of how overhead, water or underbody damage or loss is caused; it is the renter’s full financial liability when renting a car with Budget for travel within Australia.

How does Budget determine whether the cause of the rental vehicle damage is a result of one of these types of damage?

Overhead Damage: The Budget Australia terms and conditions define overhead damage as: “damage to the Vehicle or property of any third party caused by the Vehicle coming into contact with anything above the top of the door seal and the top of the front and back windscreens.”

Underbody Damage: The Budget Australia terms and conditions define underbody damage as: “damage to the Vehicle caused by the Vehicle coming into contact with anything below the bottom of the door seal and the bottom of the front and rear bumper bars.”

Water Damage: Water Damage, does not appear to be defined in the current Budget Terms & Conditions (July 2014) however, as part of the website’s FAQs, Budget states that “vehicles are not to be driven through floods, creeks or rivers or used where water damage is likely to occur… Convertibles should not be left with the top down.”

Tire Damage: In Section 8.3(a)(iv) of Budget’s Terms and Conditions, tire damage that is not attributable to general wear and tear is listed as an additional cost payable. It is noted that tire damage is not clearly stated as an exclusion on the Budget website and that the terms and conditions are not clear. If concerned, contact Budget Australia directly to clarify for your car rental journey.

How can I reduce or remove my financial liability when hiring a car from Budget for travel in Australia?

There are 2 options available when renting a hire car from Budget.

First of all, you could consider Hiccup Insurance. The rental vehicle excess (RVE) insurance provides cover for cars hired from Budget Australia. The product is independent to the car rental companies and global travel insurance company, Allianz Australia Limited, underwrites the product.

To learn about the product features, including the Product Disclosure Statement, have a look at the Hiccup Insurance Policy Benefits Page.

Alternatively, you may choose to purchase a rental excess reduction product from Budget when you collect your hire car from the rental car depot.

The Budget Australia rental excess product is called “ Accident Excess Reduction (AER)”. Budget Australia’s website does not provide any details about what the product provides cover for or the cost to purchase the product.

The information shown below has been obtained from VroomVroomVroom.com.au. To learn more about the AER product, contact Budget Australia directly.

Budget-AER-Summary

Note: The information has been provided as a guide only. To determine your specific liability when renting a car from Budget Australia, contact Budget directly.

The information has been researched from the Budget Australia website, terms and conditions (July 2014 version) and theVroomVroomVroom.com.au website. The information is current as at October 2014.

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