Car rental excess insurance and VAT on excess

xorzp

I have recently rented a car aboard from Budget and unfortunately had a damage.  I have taken a car rental excess insurance separately, so I claimed the excess.

However, Budget charged me the excess + 22% VAT on excess + 20% location surcharge (airport tax) on excess + 22% VAT on location surcharge.  Basically, it ended up being almost 50% extra from the excess itself.

The excess insurer claimed that it doesn't pay for VAT and location surcharge.  I'd imagined that if I take the extra insurance directly from Budget (albeit more expensive), it would cover everything.

Is this a common practice for independent excess insurers?  I can now see why they can be cheaper since I ended up paying half the quoted excess anyway.  I didn't know this before, so it would be a good reminder for the next time.