Hi, sorry if this seems a stupid question, but I can't seem to find a proper answer anywhere, so I'll go ahead and ask.
How exactly does the Aussie car insurance system work?
I'm off to Oz for three weeks and hope to rent a camper van for some of that time, trouble is, you seem to have to pay a liability reduction fee to bring the insurance excess down to less than $2000. If I don't pay the extra, what happens if I have a crash? Do I have to fork out 2k no matter whose fault it is, or does the excess only apply later on once liability has been worked out and I have to pay retrospectively?
Basically, do I need to take the extra cover out? If I do, my budget will only stretch to a wicked camper, which some people seem to think is 'a bad thing'...
You pay your 2k if you have the accident. If it turns out to be someone else's responsibility you get the money back, but it could be months.
Yes, you will find that there are all sorts of exclusions: single vehicle accident etc. Rental companies screw you over worldwide if something goes wrong.
The rental car company will take the $2000 from you - if they're a good rental car company, they'll warn you that you are liable to them for that amount, irrespective of who is at fault, because that is the reality. They have no concern with the <$2000, so even if it is not your fault, neither the rental car company nor its insurer will do anything to recover it for you. So, contrary to #1, you won't get the matter back as a matter of course if it is someone else's fault - at best, you might be asked if you'd like to share in any recovery proceedings the rental car people or their insurer might bring. Of course, some rental car companies don't even give the option, just require you to take their compulsory insurance, while trumpeting their cheap rental rates.
#2 doesn't seem to get the point: if you return the vehicle in damaged condition, it is your legal obligation to make it good. The screwing over comes with the insurance they're trying to sell you - $20 a day for $2000 cover!!!
The good news is that most travel insurance policies cover you for the excess on vehicle hires.
#2 does get the point. There have been instances of having to pay for the total cost of a vehicle due to exclusions not limiting the liability to $2000 or anything. You need to read more widely.
You can have my 91 Mitsubishi LWB duel fuel, converted camper for $4.5 grand (negotiable), inc mobile phone, cooker, esky, new matress, sleeping bags (all cleaned) chair, fishing stuff, rego'd until the end of May and lots more! Recent recon engine, blah blah blah. Message me if you're interested and I'll send you the gen. You know it makes sense! And you can sell it without making a loss when you leave. It's perfect for you, innit!? I'lll even thow in my precious Aussie Disposals enamel mug, just for good cheer! Sometimes I think I'm too generous for my own good, but life goes on. Oh, and as it's got the rego windscreen sticker - you are automatically insured for 3rd party injury! No worries mate!
> The good news is that most travel insurance policies cover you for the excess on vehicle hires.
Be careful with this, often the travel insurance will cover your excess after you have paid the rental company for every available excess reduction option they offer. So you still have to fork out the ridiculous $8-$20/day to reduce your excess.
I've never had experience with this, but I suspect if you have an accident and it is someone elses fault and you provide their details and the damage is over $2,000 (it does not take much to do $2,000 damage), then the car rental cos insurance company will make a claim against the other driver or their insurer. Then you are likely to get your $2,000 back. At least I have some confidence this would happen if you rented off Avis, Hertz etc. If you rent off Supa-Cheap-Rentals, don't expect to get anything back regardless of whose fault it is.
Actually #2, the question raised by the OP was about the $2000 and buying it down. Your post does not address that point, so you maybe need to read more closely. If the question had been about the exclusions which might cut in even when insurance is in place, well, all I'll say is that I wrote the book on that, but it was not called for here.
I never pay to buy the excess down, and am now well ahead of the game. I've had to pay the rental car people once, something like $180, when some tosspot ripped the mirror off the car in Hamilton. Maybe I've been lucky in my choice of travel insurer, but there was no requirement that I take up an excess reduction offer from the rental car people - in fact, the policy was specifically worded to be in place of excess reductions, and covered me to $3000.
its a risk that you have the option to take -
we recently did hurried repairs for a guy in a rental - we charged $300, he had to cancel flight and rebook and spend a night in Melbourne. The way he understood his insurance it would cost him the $2000 excess if the rental company had to make a claim on their insurance - so doing the repairs and cancelling flight was cheaper in the long run.
Have a good think about where you may be travelling - if it is along country roads and there is the possibility of a kangaroo hopping out -worth paying the extra. If just around the city for a couple of days it may be worth the risk - I always pay the extra 'cause you don't know what is around the corner.
As Spen said, the rental company will look for compensation of some sort for lose of income by having the car off the road, so would be reflected in the repair cost.
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