Rental car insurance in NZ: the excess, and a hire car after a claim
Two different things get called rental car insurance. One is cover for the excess you owe a rental company if a hire car is damaged, which you can reduce with the rental company or cover through some travel insurance. The other is the hire car your own insurer provides while your car is repaired after a claim, which varies a lot by insurer.
Last checked against its sources on 2026-10-19
Hiring a car: what is the rental excess?
When you hire a car, the rental company's own insurance covers the car, but you agree to pay an excess if it is damaged or stolen while you have it. The excess is set in the rental agreement and can be large. You can usually pay a daily fee to reduce it.
- Excess reduction from the rental company. A daily charge that lowers the excess, sometimes to zero. Simple, but read what it excludes: tyres, windscreens, underbody and single-vehicle accidents are common exclusions.
- Rental vehicle excess cover in travel insurance. Some travel policies, including domestic ones, reimburse a rental excess you have paid, up to a limit. You pay the rental company first and claim it back.
- Credit card benefits. Some cards include rental excess cover if you pay for the hire with the card. The conditions are in the card's insurance terms.
- Your own car policy. Most private car policies do not extend to a car you hire. Check, rather than assume.
Whichever you use, take photos of the car before you drive off and when you return it, and get any damage noted on the paperwork. The Consumer Protection advice for a crash applies to hire cars too:
“If you're in a car accident get the name, address and telephone number of other drivers involved. Ask for the name of their insurer and make a note of their registration and drivers licence details. If you can, photograph the damage on your phone.”
— Consumer Protection (Ministry of Business, Innovation and Employment), Car insurance
A hire car while your own car is fixed
If you claim on your own policy, many insurers provide a hire car or pay towards alternative transport while your car is repaired. How long, which car, and whether it is automatic or an optional extra all vary. This is what each insurer's wording said on 2026-09-16.
| Insurer | Hire car or alternative transport |
|---|---|
| AA Insurance | Optional rental cover, running until the vehicle is repaired or the claim is settled rather than for a fixed number of days |
| AMI | Up to 21 days, or up to $40 a day for 21 days if you arrange it yourself |
| Cove Insurance | Up to 30 days, for a car up to 2000cc that is the closest available equivalent to yours |
| NZI | On the Distinction tier, up to $10,000 towards alternative transport rather than a fixed number of days |
| State | Up to 21 days of a hire car or alternative transport while yours is being fixed |
| Tower | Optional; up to $1,000 on comprehensive and $750 on third party fire and theft, ending seven days after the claim is paid |
| Trade Me Insurance | Optional; up to $1,000 on comprehensive and $750 on third party fire and theft |
| Vero | Not checked yet |
Hire car benefits usually apply only once a claim is accepted, and only for the cover type that pays for your car. The full quotes are on the comparison table.
Not your fault? Claiming a hire car from the other driver
If another driver caused the crash, the cost of a reasonable replacement car while yours is off the road can be part of what you claim from them or their insurer. If you have your own comprehensive cover, it is usually simpler to claim through your insurer and let it recover the cost. See not-at-fault crash claims.
Questions
Do I need extra insurance to hire a car in NZ?
Not by law. The rental company insures the car, but you are liable for the excess in your agreement. Reducing that excess, with the rental company or through travel insurance or a card, is optional.
Does my car insurance cover a rental car?
Usually not for a car you hire yourself. Check your policy wording. What many car policies do include is a hire car while your own car is repaired after an accepted claim.
How long will my insurer give me a hire car?
It depends on the insurer and the option you chose. The wordings we read ranged from a fixed number of days to a dollar limit, and for some it is an optional extra. See the table above.
Spotted something out of date? Tell us and we’ll fix it or mark it unchecked. We aim to do that within 5 working days.
Sources
- Consumer Protection (Ministry of Business, Innovation and Employment), Car insurance
- AA Insurance, AA Insurance, Comprehensive Car Insurance Policy
- AMI, AMI, Car Insurance Policy Wording (PDF)
- Cove Insurance, Cove Insurance, Car Insurance
- NZI, NZI, Vehicle Insurance
- State, State, Car Insurance
- Tower, Tower, Car insurance — Comprehensive cover (PDF)
- Trade Me Insurance, Trade Me Insurance, Comprehensive car insurance policy wording (PDF)
Read on 2026-09-16. If a source and this page disagree, the source is right.