Here’s what international travellers need to know before they say “no thanks” at the counter.
If you’re planning to explore Australia by car (and honestly, you should—there’s so much to see), chances are you’ve looked into hiring a vehicle. And when you do, you’ll likely be asked if you want to add liability cover or excess reduction to your booking.
But wait… isn’t that already covered by your travel insurance?
It’s a common question—especially for international travellers flying into Sydney, Melbourne, Brisbane, or Gold Coast. The answer? Yes… but also, maybe not. Let’s break it down so you can make the best decision for your trip.
What Is Car Hire Liability Cover?
When you rent a car in Australia, it comes with basic insurance, but you’ll still be liable to pay a large excess fee if the car is damaged or stolen. Depending on the rental provider, this can be anywhere from $3,000 to $8,000+.
To reduce or remove that cost, rental companies offer liability reduction or excess reduction cover—a daily add-on that gives you peace of mind while driving around unfamiliar roads (and wildlife zones).
Does Travel Insurance Cover That?
Sometimes, yes.
Many international travel insurance policies include rental vehicle excess cover, which means they may reimburse you for that large excess amount after the fact.
But here’s the fine print:
- 🕒 You pay upfront: If the vehicle is damaged, the rental company will usually charge your credit card immediately for the full excess. Then, you’ll need to claim that back from your insurer later.
- 📄 You’ll need proof: This often includes police reports, rental agreements, damage photos, and official invoices.
- 🚫 Not all damage is covered: Many travel insurers exclude things like undercarriage, windscreen, tyre, and single-vehicle accidents.
- 💳 Some policies have strict conditions: If you booked with points or used a third-party site, it might not count.
So yes, your travel insurance might help—but it’s not always seamless, and it’s rarely instant.
When Does It Make Sense to Use Both?
If you’re on a budget but still want protection, one option is to skip the rental company’s full coverage and rely on your travel insurance—with the understanding that you’ll need to pay and claim later.
But if you’re short on time, prefer a stress-free holiday, or just don’t want to deal with admin while you’re in Australia, getting excess reduction from your rental provider is the simplest and fastest way to go.
The Bottom Line
Yes, you can use your travel insurance—but it’s not always the most convenient or comprehensive option. If you want full peace of mind from the moment you drive out of the lot, a local liability reduction plan might just be worth the small daily fee.
Hiring a car after landing in Australia? Make it easy with car hire airport options that offer flexible protection and no hidden drama. 🚗✈️🇦🇺
