Insurance excess

Insurance excess is the most a renter has to pay towards damage or theft before the rental company's cover pays the rest. In the US it's usually called the deductible. Most operators offer a daily fee to reduce it, often to zero.

How it works

Renter pays = the lesser of the damage cost and the excess

Many operators also hold a bond or pre-authorisation on the customer's card, often equal to the excess.

Worked example

Hypothetical. Say your standard excess is NZ$4,000, and reducing it to zero costs NZ$30 a day.

A customer on a 5-day hire pays NZ$150 for excess reduction. If 1 in 20 hires has a claim averaging NZ$1,500, your expected damage recovery per hire without the extra is NZ$75. With it, you collect NZ$150 per hire and carry the claims yourself.

Whether that's profitable depends on your real claim rate and costs. Track both.

Why it matters for a rental operator

Excess changes what your price means. Two cars at the same daily rate aren't the same deal if one has a NZ$5,000 excess and the other NZ$1,000. Customers who read the terms notice.

Very low headline rates often come with a high excess, a bigger bond and an eager counter sale. That can win the booking and lose the review.

See it in Rate Pulse

Rate Pulse shows the advertised daily price, not the excess. Each airport page's method notes that very low prices often carry a bigger deposit, excess or fuel policy. Read cheap brands' value-for-money sub-scores in the brand ranking before matching their price. Start at Rate Pulse.