What is my financial liability when renting a hire car in Australia?

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Determining your total financial liability when renting a car can be very confusing and complicated.

The financial liability varies depending on the car rental supplier that you rent with, the type of car that you hire and the depot location that you collect your car from.

The following information is provided as a guide only and does not take into consideration your personal requirements or situation.

Commonly, the liability comprises: Rental Vehicle Excess + Local Fees & Taxes + Car Rental Supplier RVE Exclusions

Rental Vehicle Excess

The major component of a car hire customer’s financial liability is called the rental vehicle excess (RVE for short). The RVE is a specific dollar value specified in your rental agreement with the car rental company.

If you damage the car while it is in your possession and the cause of damage is included in the car rental company’s Rental Vehicle Excess conditions (more on this below), the assessed cost of the damage is payable by the Customer up to the rental vehicle excess amount.

The rental vehicle excess is also commonly referred to as the Damage Liability Fee, Accident Damage Excess or the Damage Recovery Fee.

The rental vehicle excess for a particular vehicle depends on the car rental supplier, the car type and the pick up location of the vehicle.

In Australia, the rental vehicle excess liability commonly ranges between $4,000 to $6,000 however for some 4WD’s and prestige cars, the RVE liability may be up to $8,250.

The rental vehicle excess value will be listed on your rental agreement with the car rental company.

Local Fees

On top of the rental vehicle excess value, a premium location surcharge (PLS) may apply.

Premium location surcharges are an additional charge that is usually expressed as a percentage of the car rental costs. The relevant percentage for the depot that you collect your car from is added on top of the rental vehicle excess liability.

Premium location surcharge costs vary depending on the car rental pick up location and the car rental company that the hire car is rented from.

Often depots located at airports attract higher a higher premium location surcharge than CBD or rural locations.

Premium Location Surcharges can range from an additional 1% to 25%+.

For example, if you hired a car that had a total rental vehicle excess of $4,000 and the car rental depot that you collect your car from has a premium location surcharge of 10%, the rental vehicle excess liability inclusive of the PLS would be $4,400.

Car Rental Supplier RVE Exclusions

What is covered within the Rental Vehicle Excess value varies from supplier to supplier.

The most common exclusion to the RVE liability is Single Vehicle Accidents (SVA). Other exclusions may exclude damage as a result of underbody or overhead damage, water damage and drivers under 25 years old.

This means that if the cause of damage to the rental vehicle, while in your possession, is the result of a cause excluded from the rental vehicle excess, the renter is responsible for the full financial cost of the damage.

 

The rental vehicle excess insurance sold by Hiccup Insurance is independent to the car rental companies. It is an insurance product that is underwritten by Allianz Australia Limited. The product provides cover for a lot of the common car rental company RVE exclusions such as Single Vehicle Accidents (SVA).

To learn more about the RVE insurance sold by Hiccup Insurance, visit the Hiccup Insurance Policy Benefits Page.

How can I learn more about my rental vehicle excess?

The Hiccup Insurance Blog and the VroomVroomVroom Insurance Page (click on the supplier logos in Option 2) both provide excess information for individual car hire companies.

To confirm your total rental vehicle excess liability, call the rental car depot that you will be collecting your car from. They will be able to confirm the RVE plus any other charges that apply (eg. premium location and single vehicle accident surcharges) to your booking.

The details of the RVE + PLS + RVE Exclusions are often listed in your rental agreement with the car rental company.

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