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Rental desk rip-off: Customers charged £100s for basic insurance

Paloma Kubiak
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Paloma Kubiak

Holidaymakers are charged up to seven times more for car hire cover bought at the rental desk which is ‘considerably inferior’ to the most comprehensive policy on the market, research reveals.

Some of the biggest car hire firms are charging holidaymakers hundreds of pounds for ‘second-rate’ insurance for policies bought last-minute at the rental desk, a consumer champion revealed.

As such, Which? urges people to plan ahead and avoid buying policies from the ‘rip-off’ rental desks as its research found the best – and cheapest – insurance deals could be snapped up online with third-party sellers.

It rated the excess reimbursement policies of 20 third-party providers – based on tyres, windscreen and underbody cover, flat battery cover, admin charges, car jacking, towing cover, personal accident cover and more – against the most comprehensive excess waivers sold by major car hire companies in Spain.

The campaign group found the least comprehensive policies were from Budget and Avis – both £168 a week and with a Which? policy score of 46%. Europcar’s ‘Premium Protection’ policy was better, with a policy score of 68%, but it costs £205 per week.

Goldcar, Alamo and Enterprise all scored just 51%, with a week’s cover from Goldcar coming in at £177. The lowest price insurance from a car hire company for a week’s rental from Malaga airport was £110 per week with Enterprise.

Chew Insurance topped the charts with a Which? policy score of 76% and a week’s cover costing just £23. Questor Insurance costs just £24 and scored 73%. Which? found holidaymakers can buy an entire year’s cover from an online insurance company for an average of £47.

Excess policies

It explained that hire cars in Europe come with basic insurance included in the price, so you don’t have to pay the full cost of replacing a stolen or damaged vehicle. But you would have to pay an excess of up to £2,500.

To reduce this excess, often to £0, car hire companies offer an excess waiver, which means you would pay nothing in the event of a claim. But these waivers are often expensive and full of holes, it said.

For example, Alamo’s standard cover excludes personal belongings, tyres and the vehicle interior. If any of these were damaged, you’d still have to pay.

Which? recommends using an independent insurer that does include this as standard. The top-rated online insurers also cover curtailment – the costs incurred if your trip is cut short – which has become increasingly important during recent travel disruption, personal possessions, misfuelling, and the cost of getting towed.

None of the car rental firms’ expensive policies cover all of these eventualities, Which? found.

Top tips on buying car hire insurance

Which? said car hire is very competitive and the major rental companies compete on the headline price on comparison sites. They make their money from the extras they sell, such as insurance, and customers have complained about unscrupulous providers resorting to pressure selling tactics.

The consumer champion recommends holidaymakers buy your own excess reimbursement policy from a separate/ third-party insurance provider, then just say no at the rental desk. Explain that you don’t want any extra cover and that you understand the need to pay up to the excess limit if you damage the car (safe in the knowledge that you can claim it back).

The more expensive alternative is buying insurance from the company renting you the car. This is called a damage waiver, or super collision damage waiver (SCDW).

‘Extortionate fees for poor quality cover’

Guy Hobbs, acting editor of Which? Travel, said: “Our analysis found major rental firms are charging extortionate fees for poor quality cover. With the price of hire cars rocketing this summer, it’s worth trying to avoid these rental desks’ rip-off policies.

“Car hire companies make their money from extras, like insurance, and Which? has previously found some unscrupulous providers resorting to pressure selling tactics.

“If you hire a car this summer, avoid the pressure from pushy agents and buy your own policy from a third-party beforehand.”