Renting a car should be simple - but when you're hit with surprise fees and expensive insurance at the counter, it quickly becomes stressful. One of the biggest hidden costs? Rental car excess insurance. Fortunately, in 2025, there’s a cheaper, smarter way to protect your rental car without falling into the expensive trap set by rental companies.

What Is Rental Car Excess Insurance?

When you rent a car, it typically comes with basic insurance. However, that policy usually has a large excess (or deductible) - often up to £1,000 or more. If your rental car is damaged or stolen, you’re on the hook for that amount, even if it wasn’t your fault.

That’s where excess insurance comes in. It covers the excess amount, so you’re not stuck with a big bill in the event of damage. But here’s the catch: buying excess insurance at the rental desk is one of the most overpriced add-ons in the travel industry.

Rental Desk vs. Third-Party Cover: The Price Difference

Rental companies typically charge £15 to £30 per day for excess protection. Over a week, that can cost £100–£200, and that’s on top of your rental fee.

Compare that with a standalone excess insurance policy, available online from just £2 per day, or even better—£40 to £60 for an annual policy that covers multiple rentals. That’s up to 90% cheaper, with broader coverage.

Better Coverage for Less Money

Not only are third-party excess policies cheaper, they’re often better. Most include cover for:

Tyres, windscreens, mirrors, roof, and undercarriage

Lost keys and lockouts

Misfuelling and towing

Admin and processing fees rental companies love to sneak in

And you can buy one before your trip in just a few clicks.

How Does It Work?

Here’s how standalone excess insurance works:

1. You book your rental car as usual.

2. Before your trip, you buy an excess insurance policy online.

3. If damage occurs, you pay the rental company and claim the cost back from your insurer.

4. Claims are usually quick and easy—some providers even offer 24-hour payouts.

Why Rental Companies Push Their Own Insurance?

Let’s be honest: rental desks push their own insurance hard because it’s a massive profit-maker. They use fear-based tactics, like asking “What if something happens?, to convince you to buy overpriced protection.

But now you know better. In 2025, savvy travellers are saying no to high desk prices and protecting themselves for less.

Final Tips for Renting a Car in 2025

✅ Buy your excess insurance in advance—don’t wait until you reach the counter.

✅ Print or save your policy on your phone.

✅ Take photos of the car at pick-up and drop-off.

✅ Stay firm if the rental agent tries to upsell you—you’re already covered.