International Car Rental Insurance WIth Car Excess Cover

Alevin Chan

Alevin Chan

Last updated 28 February, 2024

Planning a driving holiday? Don’t overlook the importance of international car rental insurance, as it serves a different purpose than your regular travel insurance plan. These two policies, while complementary, offer distinct coverage areas.

If you’re planning a driving holiday down the Gold Coast, you may be wondering if the policy you bought using a travel insurance discount, or the free one that comes with your credit card also covers you when renting a car overseas.

Generally speaking, the answer is no. Standard travel insurance does not usually include comprehensive coverage for rental cars overseas. Instead, you'll need separate car insurance for international drivers to adequately protect yourself.

Let’s take a look at the difference between travel insurance and international car rental insurance to better understand why.


Why You Need A Specialised International Car Rental Insurance

Driving abroad offers freedom and flexibility, but it also comes with unique risks. Whether it's navigating unfamiliar roads, encountering different driving habits, or facing the potential for accidents or theft, renting a car overseas can expose you to unforeseen challenges.

Statistics reveal a sobering reality - car accidents are a global concern. According to the World Health Organisation, over 1.19 million people die in road crashes each year, with millions more injured. While accident rates vary significantly between countries, the risk is always present, especially in unfamiliar environments. In some regions, car theft rates are alarmingly high, with vehicles being targeted for parts or resale. Even minor fender benders can lead to unexpected expenses and disruptions to your travel plans.

This is where international car rental insurance with car excess cover becomes indispensable. It acts as a financial safety net, protecting you from the potentially high costs associated with accidents, theft, or damage to the rental car while you are abroad. While some credit cards might offer basic rental car insurance, it's often limited and may not cover the full extent of damages or theft.

By investing in comprehensive international car rental insurance with car excess cover, you're not only safeguarding your finances but also ensuring peace of mind throughout your journey. This allows you to focus on enjoying your travels without the worry of unexpected expenses or liabilities looming over your head. Remember, even the most cautious drivers can encounter unforeseen circumstances on the road, making this type of insurance a worthwhile investment for any international traveler renting a car.


Table of contents


Comparing International Car Rental Insurance Plans

Finding the right insurance that includes rental car excess coverage when you travel abroad  can significantly enhance your travel experience by providing peace of mind on the road. Here are some of the best travel insurance options with comprehensive rental car excess coverage to ensure that you are well-protected against unexpected expenses, allowing you to focus on enjoying your journey.

Travel Insurance Plans 
Coverage 
Premiums
Starr-Insurance-Companies-01
Starr TraveLead Travel Insurance (Comprehensive) – Bronze 
 
  • Up to S$200,000 overseas medical coverage with the option to add COVID-19 coverage.
  • S$200,000 in benefits for accidental death or total and permanent disability.
S$25
FWDFWD Travel Insurance – Premium
 
  • Up to S$200,000 overseas medical coverage with the option to add COVID-19 coverage.
  • S$200,000 in benefits for accidental death or total and permanent disability.
S$26.40 (+S$11.06 for COVID-19 cover)
Tiq-May-13-2024-05-53-03-0793-AMTIQ Travel Insurance – Entry
 
  • Up to S$200,000 overseas medical benefits, with additional COVID-19 cover available as an add-on.
  • Emergency evacuation and repatriation is up to S$1 million.
S$16.20 (+S$8.40 for COVID-19 cover)
MSIG-1MSIG TravelEasy – Standard
 
  • Provides S$250,000 overseas medical coverage with S$75,000 for COVID-19.
  • Includes S$1 million for emergency evacuation/repatriation and S$150,000 for personal accident benefits.
S$26.40

*Based on single trip, 1 adult, over four days in Malaysia

These travel insurance plans offer varying levels of coverage and benefits at different price points. Starr TraveLead's Comprehensive Bronze plan is a good value option for those primarily seeking overseas medical coverage, while TIQ Travel Insurance's Entry plan stands out with its high emergency evacuation and repatriation coverage. FWD Travel Insurance's Premium plan provides a balanced approach, and MSIG TravelEasy's Standard plan offers comprehensive coverage including COVID-19 benefits.

Ultimately, the best plan for you will depend on your individual needs and budget. Consider factors like your destination, trip duration, planned activities, and the level of medical coverage you require. It's crucial to compare quotes and carefully read the policy documents to ensure the plan you choose offers the right protection for your specific circumstances. Don't hesitate to reach out to the insurance providers directly if you have any questions or need further clarification.


What Is The Difference Between Travel Insurance And Car Rental Insurance For Rental Abroad?

Travel insurance and international car insurance do have some overlap in the benefits they offer, but both of these are designed with different areas of focus. 

Standard travel insurance does not always cover rental cars since it is aimed at offering broad-based cover against the common risks of overseas travel. On the other hand, international car rental insurance is for the specific liabilities that drivers take on whenever they get behind the wheel while travelling abroad. 

In most cases, you do need some form of insurance to drive a rental car abroad. However, the type of insurance and the extent of international car rental insurance coverage can vary depending on your individual circumstances and location. 

As the driver, you're liable for damages or claims if your rental car causes injury, property damage, or is stolen or damaged. This is where international car rental insurance becomes essential, providing financial protection for these situations.

Whether you’re travelling solo or with family, car insurance for international drivers is crucial for anyone planning to rent a car overseas. If unsure whether your travel insurance includes rental car coverage, contact your provider for clarification.

And because travel insurance and car rental insurance while abroad ultimately have different goals, it is crucial to think of both of them separately – even if there is some overlap between the two.

Travel insurance
Car rental insurance
Protects against common risks of overseas travel
Covers against liability arising from driving a vehicle
Mainly includes benefits for overseas medical expenses, personal accident, loss or damage to personal belongings
Benefits are focused on protecting the driver against financial consequences of accidents, damage or loss of vehicle, or damage or loss to third parties. Thus, may also include personal accident or medical expenses cover.
May include limited cover for rental car usage, including rental car excess
May come with high insurance excess; reducing or waiving the excess requires added cost

Looking for the best credit cards to complement your spending patterns and expenditure in 2024? Check out our Ultimate Credit Card Guide that covers all things credit cards in Singapore – from choosing between a cashback, miles, or rewards credit card to planning your credit card strategy.


What Does It Mean By Car Rental Excess Cover Travel Insurance?

There’s one thing to highlight about international rental car insurance, and it’s that while having this insurance will shield you from the financial impact of a road accident, you may not be fully spared the backlash.

This is because international rental car insurance plans commonly come with excess, which is the amount you have to pay before your policy pays the rest. Insurance excess is nothing new – most motor insurance policies impose a S$100 excess charge for windscreen repairs, for instance.

However, in the case of international car rental insurance, the excess may be set at a high amount – up to several thousands, or more. If your policy comes with a high excess, you will potentially have to pay a large amount out of your own pocket, which negates the whole point of having an overseas car rental insurance plan in the first place!

This is where rental car excess cover comes in. This is an insurance benefit that reduces the amount of excess you have to pay, or waives it off completely. With rental car excess cover, you can be compensated for the full sum of repairs or damage, or claims from injuries or loss.

Clearly, this is a crucial benefit to have when renting a car abroad, which makes it a shame that it is not included in most international rental car insurance policies. Instead, you’ll have to obtain your own rental car excess cover, which you can do in the following ways.

Related to this article: How Much Does It Cost To Rent A Car In Singapore?


What does Car Rental Excess Coverage encompass?

Rental car excess cover should be part of the list of travel essentials for travellers seeking comprehensive protection for renting and driving overseas.

Depending on the plan, rental car excess can cover the excess amount in case of damage or theft, and additional fees that rental companies may impose to remedy minor accidents, such as flat tyres, lost keys, and towing charges. This cover can also extend to accidental loss or damage of the rented vehicle and coverage for additional drivers listed on the agreement. Adding rental excess cover to your international car insurance is highly recommended to ensure you're fully protected during your travels.


What Is The Difference Between Car Rental Excess Cover And International Car Rental Insurance?

Car rental excess cover and international car rental insurance differ primarily in their scope of protection. While overseas car rental insurance covers damages and theft of the rental vehicle, car rental excess cover specifically addresses the excess charge that insurance policies often leave to the renter.

For instance, if you're involved in an accident causing S$2,000 in damages with a S$500 excess, your excess cover would handle the S$500, while the international car rental insurance would take care of the remaining damages. In this scenario, if you only have the international car rental insurance and no car rental excess cover, you would be responsible for paying the $500 excess out of pocket.


How Much Does Travel Insurance Plans With Car Rental Excess Cost?

In most cases, the cost of car rental excess cover will be significantly less than the potential expense of the excess charges in case of damage or theft, offering substantial savings. Prices for car rental excess vary depending on your destination and where you purchase the cover; buying directly from the rental company might be more expensive compared to opting for a third-party insurer. Regardless of where you choose to purchase your car rental excess cover from, it will allow you to mitigate potential financial losses by paying just a fraction of what the real cost could be in the absence of excess cover.

When choosing your international car rental insurance as you go abroad, compare the coverage offered by different providers, including any excess car insurance options, to find the plan that best suits your needs and budget.


How do I get international car rental insurance coverage? 

From Car Rental Providers 

When renting a car abroad, your car rental provider will likely offer various different add-on insurance options, often for an extra fee. While convenient, these options might not always be the most cost-effective or comprehensive.

Car rental providers typically offer coverage through Collision Damage Waivers (CDW) and Loss Damage Waivers (LDW). CDW reduces your liability for accidental damage, while LDW adds protection against theft. However, even with these, you might still be responsible for some expenses, as they often exclude common damage to components like tires, windows, and undercarriage.

Moreover, rental companies often split coverage into multiple add-ons, creating the perception that you need to purchase all of them for full protection. This can result in high costs, and even then, some companies offer tiered coverage options, with only the more expensive one fully waiving the excess.

Therefore, while purchasing insurance from your car rental provider is possible, it's crucial to carefully assess the costs and limitations before deciding. Exploring alternative options like standalone travel insurance with rental car excess coverage or dedicated international auto insurance could offer better value and comprehensive protection.

Related to this article: Best Travel Insurance Plans for Road Trips, Water Sports and Extreme Sports

From Travel Insurance Plans 

Some affordable and cheap travel insurance plans include international rental car excess waiver as either a standard feature or an optional add-on. This benefit covers any excess fees charged by your car rental company, regardless of the cause of damage or loss.

Unlike purchasing coverage directly from the rental provider, this waiver typically covers all excess claims, eliminating the need to worry about specific exclusions for certain car parts. However, it's important to note that some restrictions may still apply. For instance, damage to windows, tires, or other specific components might not be covered, depending on the policy.

Additionally, the amount of excess waiver offered by travel insurance may be capped. For example, FWD Travel Insurance offers S$1,000 in car rental excess waiver. If your excess exceeds this amount, you’ll have to cover the remainder on your own.

Therefore, while a travel insurance with rental car excess waiver is a convenient and often cost-effective option when you’re abroad, it's crucial to carefully review the policy details to understand the coverage limits and exclusions before relying on it solely.

Related to this article: Driving to Malaysia? Travel Insurance May Be More Important than You Think

From Third-Party Providers

Besides travel insurance and rental companies, third-party providers like RentalCover or Worldwide Insure also offer standalone rental car excess cover for travellers abroad. Similar to the travel insurance benefit, these policies reimburse the excess charged by your rental company in case of damage or theft.

However, third-party providers often go beyond basic excess cover. Depending on the chosen plan, they may also cover additional charges like damage to tires, windows, undercarriage, misfuelling, and even incidents related to road rage. Some providers offer unlimited excess waiver, completely eliminating your financial liability in case of damage or theft.

Compared to options from rental companies, third-party providers such as these often deliver cheap car insurance for international drivers and generally better value. This makes them an attractive alternative for travellers looking for the best international car rental insurance without straining their budget.

Related to this article: Driving to Malaysia in 2023: The Ultimate One-Stop Guide


What are the other rental car protection types i can get?

When renting a car, there are several common policies available to enhance your international car insurance coverage and provide you with added protection and peace of mind during your travels. Even the best travel insurance for road trips may not offer complete coverage so it is recommended to consider these additional protection types.

Collision damage waiver (CDW)

A collision damage waiver (CDW) offers comprehensive coverage for any damage to a rental car in your possession. Whether you encounter an accident while on the road or come to find your car damaged while it was parked, a CDW ensures you're not financially responsible for repairs. This waiver often includes coverage for accident-related towing fees, the rental agency's administrative fees and any lost revenue from the vehicle being unavailable for rent, known as loss of use.

Loss damage waiver (LDW)

A loss damage waiver, or LDW, enhances your car rental insurance by combining the benefits of a CDW with theft protection. This comprehensive international auto insurance not only are you covered for damages to the rental car, but you're also protected in the event the car is stolen during your rental period. It's important to note, however, that neither LDW nor CDW covers damages to other vehicles or injuries resulting from an accident while abroad.

Supplementary liability insurance (SLI) 

Supplemental liability insurance (SLI) is a crucial addition to any overseas car rental insurance policy for international drivers. It covers claims made by third parties for physical damage or injuries they sustain due to the rental vehicle. This additional layer of international car insurance coverage is vital even if the accident was not your fault, offering protection against potential financial liabilities resulting from third-party claims.

A Note On Driving In West Malaysia

If your travels are limited to West Malaysia, your existing Singapore motor insurance policy might suffice. Most Singapore policies cover driving not only within the country but also in West Malaysia and a portion of Southern Thailand (usually up to 80km).

However, before embarking on your journey, verify with your insurer whether your policy extends to rental cars, as some may not provide this coverage.

Having said that, it might still be a good idea to get a cheap Malaysian travel insurance and a separate international car insurance for drivers to have their out-of-Singapore road trip regardless. This additional layer of protection safeguards you from potential financial burdens arising from accidents or damage to the rental car.

For instance, if you get into a minor accident on the North-South Expressway, having a separate auto international insurance policy for the rental car can help you avoid impacting your No-Claim Discount or facing increased premiums on your primary motor insurance.

In essence, while your Singapore motor insurance might offer basic coverage in West Malaysia, investing in a specialised international car insurance policy for your rental car provides peace of mind and comprehensive financial protection throughout your journey.

Related to this article: What to Look for in a Car Insurance When Driving to Malaysia


Frequently Asked Questions For International Car Rental Insurance With Car Excess Cover

What documentation is needed for car rental excess cover?

To make a claim for car rental excess insurance for any expenses incurred while abroad, you'll typically need documentation such as the car rental agreement, damage report from the rental company, repair invoices, police report (if applicable), and proof of payment for the excess. This ensures that your international car insurance coverage is applied correctly to your specific situation.

Does car rental excess cover provide roadside assistance?

Car rental excess insurance cover generally does not include roadside assistance. This service is usually offered separately by the rental company or through your own international auto insurance policy. It's important to consider whether you need this additional coverage, especially if you're driving in unfamiliar areas.

Does car rental excess insurance cover all types of damage?

Excess car insurance abroad usually covers most types of accidental damage to the rental vehicle, such as collision damage, theft, vandalism, and damage caused by natural disasters. However, some types of damage may be excluded from your international car hire insurance, such as damage due to negligence, driving under the influence, or using the vehicle for unauthorised purposes.

Is theft covered by car rental excess insurance?

Yes, theft is typically covered by car rental excess insurance. If the rental car is stolen when you are abroad, the insurance will cover the excess amount that you would have been liable for under the rental agreement.

Are there any exclusions I should be aware of in car rental excess cover?

Yes, there are certain exclusions in car rental excess cover. These may include damage to the undercarriage, roof, or tires, damage caused by off-road driving, or loss of personal belongings inside the rental car. Before purchasing any international car insurance, It's important to read the policy documents carefully to understand the specific exclusions applicable to your coverage.

 

Read these next:
Travel Insurance Guide: Five Things All Travellers Must Know
Is Travel Insurance With COVID-19 Coverage Still Necessary?
Best Travel Insurance For Travellers With Pre-Existing Conditions
Why You Should Buy Travel Insurance (And What Happens If You Don't)

An ex-Financial Planner with a curiosity about what makes people tick, Alevin’s mission is to help readers understand the psychology of money. He’s also on an ongoing quest to optimise happiness and enjoyment in his life.

FINANCIAL TIP:

Use a personal loan to consolidate your outstanding debt at a lower interest rate!

Sign up for our newsletter for financial tips, tricks and exclusive information that can be personalised to your preferences!