To start, there’s nothing dodgy about a hire car company asking to take a waiver of a couple of grand when you take a hire car, every firm does this whether they’re big or small.
There’s 3 ways to play the hire car game. Each has merits.
1. Take the car with the basic insurance, taking lots of videos and pics of the car before pick-up and on drop off. They’ll still want to put £2k on a card as that’s to cover any damage you might do, but if you don’t do any, and can prove it, then you’ll get it back. Some companies well try and sting you for every tiny bit of damage, others are more relaxed. This is the cheapest option if all is well, but the most expensive if you do any damage. I’d also argue it’s the most stressful option.
2. Take out an protection policy before you go. Most of the above still applies, but in this method, once you’ve paid for any damage you then claim it back from the company you took protection with. You’ll still need to pay the £2k waiver. This is the 2nd cheapest option, and whilst it removes some stress, it does add some faff.
3. Pay the extra for £0 excess from the hire car company. Drive the car like you stole it and enjoy worry free driving, safe in the knowledge that any damage is covered. This is the most expensive but also least stressful option.
Personally, for holiday hiring when driving on roads I don’t know and parking in unfamiliar places then I’ll take the additional cost of option 3 every day of the week. When I was hiring cars in the UK regularly then option 2 was the one.