What hire car companies don’t want you to know

Hiring a car sounds so simple on face value – it’s $29 a day, it’s a nice car and it’s covered for insurance. But it has been revealed that this is not the case and many consumers are being caught out by hire car companies who have exclusions in their policies…even for accidents.

The insurance you’re asked to pay for when you hire a car sounds like it’ll cover you for everything, doesn’t it? I mean, it’s expensive enough to seem like it’ll be a foolproof way to protect yourself if something unfortunate happens on the road. This isn’t always the case, and more and more Australians are being left out of pocket when the hire car companies tell them that the insurance they have taken out doesn’t cover hail damage or anything that happens between sunset and sunrise.

With recent storms and hail across the country, you would think that these natural phenomenons would be covered under your expensive hire car insurance…but they aren’t.

We had a look through a popular car rental company’s terms and conditions and found this worrying exclusion:

When would I have to pay more than the Damage Recovery Fee? Even if you purchase collision damage waiver protection from us you will have to pay for the full cost we incur as a result of each separate instance of an accident, damage to or loss of the vehicle or any equipment, together with the cost of any damage you cause to other property, where [for example]:

• You fail to notify us as soon as possible and no later than 24 hours after any accident, damage or loss occurs

• damage or loss caused to the vehicle’s windscreen or tyres which was not the result of a vehicle accident

• damage or loss caused to the vehicle due to hail, flood, fire, storm, cyclone or other natural disaster where such damage exceeds the amount of the DRF

As you can see, this hire car company can ask you for more than the stipulated recovery fee if you don’t call them within 24 hours (if you’re out of range..it could be too bad as they need written proof), or something happens that you can’t help.

So what can be done to stop this rort?

According to consumer watchdog Choice, you can save up to five time the cost of hire car insurance by instead taking out domestic travel insurance. Sounds too good to be true doesn’t it? Well, it isn’t. In fact, car hire companies are charging through the roof for their $20+ daily insurance when domestic travel insurance is only a fraction of this price for a whole week.

Hire car companies can charge up to $4000 for excess for damages caused in an accident, all of which comes out of your pocket. A simple travel policy usually has cover of $6000 or more, meaning if you have a crash while protected, there’s no out of pocket expense.

Tom Godfrey, spokesman of Choice, said “We’ve all felt the pressure to get insurance when hiring a car, but the reality is if you’ve taken out travel insurance you can save yourself a lot of money”.

“In addition to being expensive, buying car insurance from hire companies can leave you grappling with exclusions that will leave you on the side of the road if something goes wrong”.

The ACCC has been keeping a watchful eye over the hire car contracts for years and is still unhappy with their stipulations. Last year the ACCC took a case against Europcar to Federal Court, alleging a number of terms in Europcar’s vehicle rental contracts were unfair and that Europcar engaged in misleading or deceptive conduct and made false or misleading representations regarding the liability cover provided to car hire customers.

What will you be doing next time you hire a car? Will you consider taking out additional insurance? Tell us below.