How to avoid the insurance scam when hiring cars in Spain.

For years I have not understood why a large amount of people complain about the car hire insurance scam in Europe.

I have just have this explained to me and the way to deal with it. 

This is how it works: 

You book a cheap car hire from an online broker: 

For example at one of these websites: https://www.doyouspain.com/ or carjet.com

After booking the car they attempt to sell you an excess insurance policy and in some cases you buy it. 

Maybe the price of the insurance is 80 euros for 5 days. 

So you think everything is OK. 

Later you arrive to pick up the car you may be tired/stressed in a hurry etc. 

The car hire company tell you that that you need to buy excess insurance to cover scratches, loss of keys and other damage to the car and you will have to pay the first 1500 euros of any claim.  They go to great length to emphasise the risk of not paying extra.  This makes you very nervous because it sounds like you are going to drive away in an uninsured car.  They tell you that the insurance that you thought you bought from the broker is not actually valid. You just want to get going so you just pay the 100 euros for the extra insurance which in some cases may be more than the cost of hiring the car. 

How to protect yourself from this legal scam? 
The perfect thing to do is purchase an independent whole year excess insurance policy which covers you all year for any car hire.  When you arrive to pick up the car you tell them that you already have car insurance for excess claims.  They won't like it because they earn a lot of money from the excess insurance. 

The only difficulty is where to buy the independent whole year excess insurance policy. The person who told me about this is a resident of Britain and Ireland and he uses carhireexcess.com which only costs 30 pounds for a year. After 5 minutes on google I found wordwide coverage for around $100 per year.  The excess insurance coverage that you are semi forced to buy when you take the car away probably costs around 20 euros per day so if you hire cars several times in one year you will save a lot of money by getting independent insurance. Use "carhire excess insurance" or something similar as a search term.  If you are a resident of Spain ask your current insurance company if they have any policies or use a search term like "Cobertura de siniestros en coches de alquiler". 

What to do when you pick up the car.

Any car that you drive away will always have 3rd party insurance. It would be illegal to let you drive away without insurance. The scam is about excess insurance. To avoid any trouble take photos of any scratches on the car and make sure they are noted down. It is best to take a short video of the car so that you can prove the condition it is in when you take it away. 

If you don't use the insurance of the car hire company they may insist on guaranteeing the first couple of thousand euros by using your credit card as a guarantee. This is where many people decide to use the overpriced car hire company insurance.   It is perfectly OK to let them use your card as a guarantee. If you have independant excess car hire coverage then if there is a claim your own insurance company will pay. 

Why does this scam exist?

The problem is that car hire in a very competetive market. When car hire companies publish their prices on comparison sites they want to be competetive and have to lowest prices. Most people just choose the lowest price. The insurance scam allows to companies to claw back some profit. It would be better to have a system where car hire companies were obliged to include excess coverage in all their prices or some other solution. But, from now on, as you have read this article you should more or less understand the system and how to avoid paying for overpriced insurance. 

Is Scam the correct word to describe this? 

When something is not actually illegal people can be reticent about calling it a scam. I have spoken to 30 or 40 people who have experienced this phenomenon and they say they felt intimidated and were suddenly put in a situation that they did not understand. Strictly speaking it is not against the law  to offer someone insurance but the situation should be better explained to the customer when they make the booking.  It is in same category of putting prices outside of a restaurant to attract people in without including IVA (taxes)  or - Bringing bread to a table  without it being asked for and then charging for it. or - Putting lavendar into someone's hand, reading their palm and then asking for money without their permission or - advertising the price of rental accommodation without including extra fees which are always charged such as cleaning.  The advertised prices of things should be what they are going to cost and should not include surprises. 

Disclaimer I amd writing this article in December 2023 and it is based on the advice of someone who has been avoiding paying for overpriced insurance using a policy which costs 30 UK pounds per year.  I am not affiliated to any company.

Notes: In the USA and Canada the extra insurance is called SCDW - Super Collision Damage Waiver

The photo above. 

The photos above was taken in the Sierra Nevada mountains near Granada during lockdown. Some young people were so desperate to get out of the house that they took went driving in the mountains with snow and ice on the road in an inadequate car. 

Places to get guided tours and tickets for the Alhambra

Suppliers	Description
Misreservas	Buy tickets for the Alhambra and Nasrid Palaces
Civitatis	Civitatis Alhambra Tickets
Tiqets	Buy tickets for the Alhambra and Nasrid Palaces

20,796 views of this article.
Last Modified on June 12th, 2024
Created on February 16th, 2020
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