The warning comes in the wake of one British holidaymaker who was involved in two minor accidents in Germany, being left to pay huge excess penalties as a result of the damage.

The two incidents left one rental car with a broken headlight after debris from the road smashed the bulb, with a bump to the left wing occurring in the second incident in a different rental car.

The British motorist believes the repair of each problem would have cost no more than £100 had the events happened in the UK, but instead was left to pay £599 for the broken headlight and £638 for the left wing damage, a cumulative £1,237 in extra fees.

When cars are hired in the UK or on the continent, the price includes fully comprehensive cover, but many holidaymakers are unaware of the inflated excess costs that are charged abroad.

Specialist online provider Insurance4carehire.com, say these fees can be as much as £1,000 overseas and that almost four out of 10 travellers are unaware that they could be liable for such costs which vary from country to country.

Three million UK motorists drive their own cars abroad each year with two thirds of them admitting to not being sure if their insurance covers them properly or not, according to comparison website uSwitch.com. They have also revealed that one in 10 holidaymakers go on a driving break under the incorrect knowledge that their travel insurance will cover them if they have a car problem.

Insurance expert at uSwitch.com, Ashton Berkhauer said, “It isn't only sun cream holidaymakers need to worry about when driving abroad.” He added that very few providers actually offer more than three day's free cover with the exceptions being Saga and eCar who both offer an all year round policy.

Barclays provide 90 days cover for a cost of around £21.50, with Admiral charging £9 for four days cover and £17 for 30 days.

Breakdown cover is available throughout Europe for 31 days per trip at a cost of about £70, compared to UK cover which can start at as little as £30 a year.

Peter Gerrard of Moneysupermaket.com said, “If you're in France for a week, you don't want to spend one day of the trip by the side of the road and the rest of your holiday without a car. Rather like comprehensive insurance, it's an area where British drivers might think they have more cover than they have. Recovery costs can be very expensive, especially if you have a foreign car and they order parts for you or they have to contract a recovery company to drive miles to pick you up.”

Gerrard went on to warn, “First check if you are covered for taking your car abroad. Only a few policies include Europe as standard, whereas others you have to pay extra. Also check what their response times are abroad. You don't want to be sitting on the hard shoulder for hours waiting for the breakdown company to come.”