My wife and I will be in Sydney for a week and are renting a car. Normally when I travel abroad I either use my AMEX card which affords me extra insurance coverage or pay the extra for a higher amount of insurance because of the nature of driving on the opposite side of the road from what I am used to and the general unfamiliarity of the area. I once slid off of a road in Crete under bad conditions and a new car was delivered to me at no cost so it has paid off in the past.

The car I've reserved includes: Normal excess amount for cars is $3850 AUD.
Excess reduction insurance needs to be purchased separately.

Listed as optional is: Normal excess amount for cars is $3850 AUD, it can be reduced to $390 by paying $26/day (excluding local fees and surcharges).

If I am reading this right, without purchasing Excess Reduction I would be responsible for up to the first $3850 of damage or I would have to pay $26 more plus fees, etc for full coverage lowering my risk to $390?

Wow, that almost doubles the price of my rental. And I've used my AMEX to reserve and pay for the vehicles in other countries because they offer coverage if I do but I see they don't for Australia.