An excess is the amount you pay towards damage or theft before the relevant cover responds, subject to the hire contract. It is not necessarily the most you could owe. Exclusions, breaches of the contract and separate charges can leave you responsible for costs beyond the stated excess.
For a prestige car, compare the liability terms as carefully as the vehicle description. This guide provides general information, not insurance advice, and does not sell, broker or rank hire services. The Australian Securities and Investments Commission's MoneySmart website provides general insurance information.
What the hire contract covers
A hire contract may include damage liability cover with an excess and cover for damage to another person's property. Read the agreement to establish what is included, who provides the protection and which events it covers. A description such as "covered" does not establish that every kind of damage is included.
Third-party property cover concerns damage to property, such as another vehicle. Personal injury is dealt with through compulsory third party insurance associated with vehicle registration, rather than the hire contract's vehicle damage cover. Check your state's CTP scheme, because arrangements differ by state.
According to the ACCC's car hire guidance, checked in November 2026, contracts often exclude some damage or require an extra payment for cover. The ACCC also advises comparing total costs, liability cover, deposit terms and gaps such as single-car accidents. Ask for the applicable terms before paying.
Excess, bond and maximum liability
The excess and the security bond serve different purposes. The excess describes a liability under the damage arrangements; the bond is money held or a card authorisation used as security. A bond matching the excess does not establish a limit on liability.
Check whether the excess applies separately to different incidents and whether theft has different terms. Ask how towing, recovery, assessment, administration and loss-of-use charges are treated, including whether they sit within the excess or outside it. The contract should make the answer clear.
Read the guide to security bonds and card holds alongside the damage terms. Even with separate excess insurance, the hire company may still require a bond and payment for damage while an insurance claim is assessed.
Three ways to deal with the excess
Reducing the company's damage liability and buying insurance to reimburse that liability are different arrangements. Compare the written terms, exclusions and payment process, rather than relying on the name given to the option.
| Option | How it works | What to check |
|---|---|---|
| Hire company excess reduction | Changes your liability to the company for eligible damage under the hire agreement. | The remaining excess, excluded damage, contract breaches and charges outside the reduction. |
| Separate excess insurance | Under a reimbursement arrangement, you pay the company first and then claim eligible costs back. | Prestige vehicle eligibility, exclusions, claim evidence and your ability to fund the initial payment. |
| Card or travel cover | May reimburse eligible hire car excess costs if the policy's conditions are met. | Activation requirements, eligible vehicles, hire type, limits and required documents. |
Company excess reduction does not necessarily remove all liability. Check whether it changes only the excess for covered damage or also extends protection to excluded items. Obtain written confirmation if the sales description and contract appear inconsistent.
The ACCC's car hire guidance, checked in November 2026, says some travel insurance policies and credit cards include hire car excess cover. Check the actual policy covers prestige vehicles and the intended hire type. Do not assume an existing policy includes a performance car or an event hire.
Exclusions that need close attention
Published hire terms in November 2026 vary by provider. The following are items and circumstances to check in your own contract; they are not universal exclusions or legal rules:
- Tyres, windscreen and other glass, undercarriage and roof damage.
- Single-vehicle accidents, including damage without another vehicle involved, and collisions with animals.
- Travel on unsealed roads or outside the permitted geographic area.
- Driving by someone who is not authorised under the agreement.
- Drink or drug driving and other prohibited use.
- Wrong fuel, lost keys and damage involving keys.
Ask how each exclusion affects the excess reduction you are considering. An option may reduce the excess for a covered collision while leaving an excluded tyre or roof claim payable separately. Check the separate insurance policy too: it may contain different exclusions from the hire agreement.
Read any conditions attached to an exception. Permission to travel somewhere does not necessarily establish that every kind of damage there is covered. Written permission and written confirmation of the liability terms answer different questions.
Check the paperwork before departure
Keep a copy of the agreement, reduction terms and any separate policy. Confirm that every intended driver is authorised and that the planned route and use are permitted. Resolve unclear answers before accepting the car.
The ACCC's car hire guidance, checked in November 2026, recommends inspecting the car with a company representative, photographing existing damage and having it recorded in the contract and countersigned. Photograph the car again on return. The pick-up and return checklist explains how to keep a useful condition record.
Check the authority to charge your card. According to the ACCC's guidance, checked in November 2026, some contracts allow unlimited card charges; ask in what circumstances charges can be made and for how much. Keep the answer with your documents.
After a crash or scrape
- Make safety the priority. Move away from danger where safe and seek emergency assistance if needed.
- Check whether police attendance or a report is required. Verify with the relevant state police, because reporting requirements differ by state and circumstances.
- Photograph the damage, vehicle positions and surroundings where safe. Record the other parties' details and keep relevant documents.
- Tell the hire company promptly and follow its incident procedure. Check any separate policy's notification requirements too.
- Give a factual account. Do not admit fault in writing or agree to a settlement before speaking to the company and, where relevant, the insurer.
The ACCC's car hire guidance, checked in November 2026, recommends obtaining a written agreement on repair costs before leaving if damage occurred during the hire, and checking your own insurance. Request an itemised explanation and supporting evidence for a charge you do not understand. The guide to damage charges and contracts explains further checks.
Frequently Asked Questions
Is the excess the most I can be charged?
Not necessarily. Excluded damage, contract breaches and separately payable costs may fall outside it, so check the agreement's full liability provisions.
Does excess reduction mean there is no excess?
Only if the written terms say so for the incident concerned. Exclusions and other charges may remain even when the excess for eligible damage is removed.
Will separate insurance stop the company charging me?
Under a reimbursement policy, you pay the company first and claim eligible costs back. Keep the agreement, damage evidence, invoices and proof of payment for the claim.
Can card or travel cover protect a prestige hire?
It depends on the policy. Check vehicle eligibility, the hire type and all conditions before relying on that cover.
Should a small scrape be reported?
Follow the contract's incident reporting requirements and notify the company promptly. Photograph the scrape and retain the written account, even if the damage looks minor.