Rental car excess insurance

Three levels of protection when hiring a car

The words “insurance included” in a rental agreement mean different things at different levels. Understanding this structure is the key to not being left with an unexpected bill.

A legal nuance that changes the picture

“Vollkasko” in a rental agreement is not an insurance policy. It is a contractual limitation of your liability towards the rental company (Haftungsreduzierung). The difference is not merely theoretical:

• The rules of insurance law on gross negligence (§ 81 VVG), under which the insurer may only proportionately reduce the payout, do not apply directly to a contract of this kind. Rental companies’ terms often provide that, in the event of gross negligence, the limitation of liability lost entirely. However, the Bundesgerichtshof (Federal Court of Justice, BGH; judgments of 11 October 2011, VI ZR 46/10, and 15 July 2014, VI ZR 452/13) holds such a blanket clause invalid in a contract under German law and applies § 81(2) VVG by analogy: your share depends on the degree of fault. It can be well above the excess, but need not equal the whole damage.
• Therefore, one must read the general rental conditions section about exclusions, rather than the promotional text on the booking website.

What rental companies usually treat as cancelling the limitation of liability: drink- or drug-driving (in cases of gross negligence your share depends on the degree of fault, see above), letting someone not named in the contract drive, using the car outside the permitted countries, taking part in races, deliberate breaches of the rules.

What usually is NOT included even in “full” cover

The standard rental liability waiver leaves a whole range of the most common damage uncovered. Each item is insured separately and costs extra money.

What to do: When booking, look for the words Glas (glass), Reifen (tyres), Unterboden (underbody) and Dach (roof) in the terms and conditions. If they are listed as exclusions, standalone excess insurance is often cheaper than optional extras at the rental counter: compare the daily price and the reimbursement limit.

Statutory liability minimums: why this concerns you too

If you cause serious damage abroad, the payout under the rental company’s policy is often limited to the statutory minimum of the country where the accident happened. Within the EU the minimums have been aligned; outside the EU (for example in the USA) they can be much lower.

The German amounts are based on the currently applicable appendix to § 4 Abs. 2 PflVG. Please note: many reviews still state the outdated figure of €1.22 million for property damage in Germany — the current amount is €1,300,000.

Mallorca-Police (top-up liability cover for hire cars): what it really is

The official name is “insurance for the use of another person’s motor vehicle subject to compulsory insurance”. In essence, it increases the sum insured for liability of a car rented abroad to the German standard.

• Covers only damage to third parties. Damage to the rented car itself and its theft — no, for this the second and third tiers from the table above are required.
• Operates in EU member states and geographical Europe. The global equivalent is usually called Traveller-Police.
• Using it does not affect your no-claims discount for your own car.
• Often already included in your motor liability insurance, in a Schutzbrief (breakdown and travel assistance cover) or in a motoring club membership, and less often in your private liability insurance. Check first — you might not need to pay separately.

Credit card instead of insurance: what to look out for

Some card issuers reimburse the excess or include car hire cover. This works, but the terms are usually stricter than with a standalone policy. Check five points in your card terms:

1. Do you have to pay for the rental with this particular card? — as a rule, yes, and completely rather than partially.
2. Maximum rental period, which is covered.
3. Scope of coverage and excluded countries.
4. What exactly is reimbursed: excess with or without restriction, and does it include glass, tyres, and the underside.
5. Claims procedure: usually you pay the rental company first, then you submit the documents for reimbursement. You will need the rental agreement, the damage report, the invoice and proof of payment.

Regarding the deposit: rental companies mainly accept genuine credit cards and hold the deposit amount on them. A debit card is often not accepted, and booking without a credit card is usually noticeably more expensive.

Checklist: vehicle inspection and return

The most expensive disputes do not arise at the moment of an accident, but upon return. Fifteen minutes upon collection save hundreds of euros.

1. Film a video all the way around in daylight, including the roof, sills, wheels and windscreen. Take separate photos of the odometer and fuel level.
2. Record every item of damage in the acceptance report, even a minor scratch. A verbal “that was already there” does not count.
3. Check that the car has a warning triangle, a first aid kit, a high-vis vest and a spare wheel or puncture repair kit — in a number of countries, not having them can result in a fine.
4. Check which countries are permitted. Travelling to a country not specified in the contract removes the limitation of liability entirely.
5. Clarify the fuel policy: full-to-full is almost always better value than a pre-paid tank.
6. Upon return film the car in the same way and get a signed confirmation that it was returned with no remarks. If you are returning it outside opening hours, the video is your only proof.
7. Save all documents for at least a year: claims can still arrive several months later.

Driver’s age and additional fees

• Minimum age for most rental companies: at least 19, more often 21–23. For high-end cars, the requirements are higher — up to 25–30 years.
• The young driver surcharge is usually charged per day, often with a cap for the entire rental. The order of magnitude ranges from a few euros to several tens of euros per day.
• Some rental companies require driving experience of at least one year.
• There are also upper age limits or surcharges for older drivers — these are not a rarity but standard market practice.
• An additional driver is paid for separately and must be written into the contract. If an unlisted person is at the wheel, the cover is void.

Green Card

The international motor insurance card is issued by the insurer and is free. Within the European Union it is usually not required, but outside the EU the police or border officials may ask for it. The card is generally valid for three years, with some insurers five, and it must be signed. Since 2020, it has been printed on plain white paper and sent by email.

When renting a car abroad, the hire company provides the Green Card — you do not need to arrange it separately. It is important if you are travelling abroad in your own car.

What else to read

• Car hire in Germany — rental terms, deposit and driving abroad
• Car in Germany — purchase, registration, maintenance
• Motor insurance — types of policies and no-claims bonus class
• Private liability insurance — usually does not cover driving a car; only some policies include cover for a hire car abroad
• Travel insurance
• Legal expenses insurance — helps in disputes with the rental company
• Personal accident insurance

Sources

• Annex to § 4 Abs. 2 PflVG — minimum sums insured: gesetze-im-internet.de
• § 4 PflVG — Compulsory insurance: gesetze-im-internet.de
• § 81 VVG — intentional acts and gross negligence: gesetze-im-internet.de
• BGH (Federal Court of Justice), judgments of 11.10.2011 – VI ZR 46/10 and of 15.07.2014 – VI ZR 452/13 — release of the renter from liability and gross negligence
• Deutsches Büro Grüne Karte (German Green Card Bureau) — Green Card claims settlement: gruene-karte.de
• European Consumer Centres: disputes over car rental abroad: evz.de
• BaFin — insurance supervision: bafin.de