Is a hire car covered by my insurance?

Depending on your level of Budget Direct car insurance and the circumstances surrounding the loss or damage to your car, we can arrange, or reimburse you the reasonable cost of, a hire car. 

What’s covered?

The following table shows the scenarios under which Budget Direct car insurance customers can be covered for hire-car expenses:

Included benefits Comprehensive Third Party Property, Fire and Theft Third Party Property Only
Hire car following theft Yes Yes No
Hire car following accident – not your fault Yes No No
Hire car following accident – your fault Optional No No

We can cover the:


You can hire a car on consecutive days or a day here and there. For example, if your car is badly damaged and likely to be in the repair shop for longer than your policy’s hire-car time limit, you may decide to catch public transport to work during the week and hire a car on weekends. That way, there’s less chance of you reaching the limit before your car’s been fixed.

What’s not covered?

We will cover the fees you pay to rent a car but not any additional expenses, including the cost of:

  • fuel consumed by your rental car
  • getting yourself to the hire car provider’s premises to collect the car, and from their premises after returning it
  • hire car accident damage excess (if the car is damaged, stolen, or causes damages to third-party property).

How to get a hire car

The process of arranging a hire car varies according to whether your car’s been damaged or stolen:

If your car’s been damaged
  1. You lodge a claim – we’ll confirm whether you’re eligible for a hire car. 
  2. We book the hire car on your behalf for a period covering the estimated time it’ll take to repair or replace your car, up to your policy’s hire car time limit. 
  3. We notify you of the hire-car collection time and place. 
  4. You collect the hire car, generally two hours or more after we book it (if your car’s undriveable) or at the agreed time on the day you drop off your car for repairs (if it’s driveable). 
  5. You show your drivers licence to our provider, read and sign the rental agreement, and pay them a refundable security bond. (Any extras you choose – e.g. GPS, hire-car upgrade – are at your expense.)
  6. You return the car and pay our provider any additional monies owing (e.g. for fuel, extra kilometres, tolls, fines). (We’ll pay for your daily rental fees, up to your policy’s hire car time limit.)
If your car’s been stolen
  1. You lodge a claim – we’ll confirm whether you’re eligible for a hire car. 
  2. You can choose to hire a car through our provider at a discounted rate, reducing your upfront costs. 
  3. If you choose our provider, we’ll give you their contact details as well as a discount code to pass on to them. 
  4. You collect the hire car from our provider at the agreed time. 
  5. You show your drivers licence to our provider, read and sign the rental agreement, and use your credit or debit car to pay them the rental fee and a refundable security bond. (Any extras you choose – e.g. GPS – are at your expense.) 
  6. You return the car and pay our provider any additional monies owing (e.g. for fuel, extra kilometres, tolls, fines). 
  7. Upon acceptance of your claim and receipt of proof of payment, we’ll reimburse your daily rental fees (up to 14 days or $1,000 – whichever occurs first).

Upgrade your cover

For an additional premium, you can customise your Budget Direct Comprehensive Car Insurance by adding the following optional benefit to your policy:

Accident hire car

Get a hire car if your car is damaged in an accident you caused or by a storm or fire, up to 14 days. (Your policy already covers a hire car following theft or accidents that were not your fault.)

How do I add an optional benefit to my policy?

You can add this optional benefit when you get a quote and buy a policy or – if you’ve already bought one – by contacting us or logging into your online account and editing your policy.

Find out more

The information on this page is a summary only. For more details about Budget Direct car insurance, including the terms, conditions, limits and exclusions that apply, please read the Product Disclosure Statement.

How to make a claim

If you need to make a claim, we’re here to help you get back on the road as quickly and smoothly as possible. Make a claim on your car insurance policy.

Hire car accident damage excess

When you hire a car, you’re liable for any loss or damage to the car and third-party property. (You’re already covered for injuries to other road users via the hire car’s registration, which includes compulsory third party (CTP) insurance.)

However, if you comply with the terms and conditions of your rental car agreement, the hire car company will usually limit your liability to an ‘accident damage excess’ (also known as a ‘damage liability fee’).

This excess, which is stated in your rental agreement, can be $4,000 or more. If you want to lower the excess to, say, $700, you can choose to pay an extra daily or weekly charge to the rental car company (often referred to as a ‘loss damage waiver’).

The good news is that Budget Direct customers who hire a car through one of our providers do not have to pay this extra charge – we pay it instead. Rather than your liability being several thousand dollars, it can be reduced to around a thousand dollars or less.

Your liability can be higher than this in certain circumstances (e.g. if you have a single-vehicle accident; use incorrect fuel; damage the hire car’s roof or, as a result of a deliberate or reckless act, its underbody; or ding the car on an unsealed road).

(If you wish, you can reduce your liability even further – in some cases down to $0 – at your own cost, including by taking out car rental excess cover – see section below.)

Car rental excess cover

Consumer advocate Choice says standalone car rental excess insurance can be a better option than hire car companies’ excess reduction charges.

“Many alternative insurance products are cheaper and often have fewer exclusions,” says Choice. 

“While car hire companies can charge anywhere from around $20 to nearly $45 per day to reduce your standard liability, standalone alternatives can cost as little as $10 per day”.

You can purchase one of these policies directly from an insurer before picking up your hire car.

For more information about rental vehicle excess insurance, read:

Travel insurance and rental cars

If you hire a car on a domestic or international trip and your trip is insured, you may not need to pay anything more to reduce the car's accident damage excess.

For example, all Budget Direct’s travel insurance policies except Last Minute include cover for any excess you become liable to pay.

This ‘Rental vehicle insurance excess’ benefit ranges from up to $4,000 (Essential, Domestic) to up to $6,000 (Comprehensive, Annual Multi-Trip).

Read more about Budget Direct travel insurance

At a glance

Type of cover Pros Cons
Hire car company excess reduction
  • convenient – can be quickly and easily purchased when you collect the car
  • generally more expensive ($20 to $45 per day)
  • subject to a range of exclusions 
Standalone car rental excess insurance
  • generally cheaper (as little as $10 per day)
  • can cover damage to areas of the car excluded by some hire companies (tyres, windscreen, etc.)
  • some policies pay the excess or the repair costs for which you’re liable, whichever is the lesser
Travel insurance 
  • often covers rental vehicle insurance excess – no need to spend more.
  • unsuitable unless you’re going on a domestic or international trip.

Rental-car tips

By following these tips, you’ll reduce the risk of nasty surprises:

  • Familiarise yourself with your rental car agreement before driving off. Why? Because if you seriously breach it, you could be liable for the entire bill for your rental car’s loss or damage – even if you have liability-limitation cover. 
  • If you take out car rental excess cover or travel insurance, read the product disclosure statement to acquaint yourself with the policy’s terms, conditions, limits and exclusions. 
  • When you pick up the hire car, thoroughly inspect it and make sure any pre-existing damage is noted on the contract (as an extra precaution, take photos of the car).
  • Take reasonable care of the rental car when it’s in your possession and obey the road rules.
  • When you return the hire car, thoroughly inspect it, bring any damage to the attention of the hire car company and note their response (as an extra precaution, take photos of the car).

Get a car insurance quote online