Do You Need Insurance To Rent a Car Overseas?

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 often complementary, offer very distinct coverage areas. For example, your travel insurance might cover medical expenses from an accident, but it won't necessarily cover damage to the rental car itself.

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. This can include coverage similar to what you might have with comprehensive and collision insurance on your personal vehicle in Singapore, protecting you against damage to the rental car itself.

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 or property damage or is stolen or damaged. This is where international car rental insurance becomes essential, providing financial protection for these situations. If unsure whether your travel insurance includes rental car coverage, you should contact your provider for clarification.

>> MORE: Travel insurance add-ons

Yes, in most cases, you will need some form of insurance to rent a car overseas. However, most rental places will provide some basic form of coverage, though it may not be sufficient for comprehensive protection.

Additionally, while your existing travel insurance might offer limited protection, it rarely provides comprehensive rental cover insurance. For complete peace of mind, especially regarding liability and damage, you should consider international car rental insurance. This specialised coverage addresses the specific risks associated with driving a rental vehicle in a foreign country, ensuring you're protected against unforeseen incidents.

Understanding what is and isn't covered by the rental car company's basic insurance and comprehensive international rental car insurance is crucial to avoid unexpected expenses. Typically, these are the key areas to consider:

Theft and damage to the rental car

At the counter:

You'll often be offered a loss-damage waiver (LDW) or collision damage waiver (CDW). This isn't actually insurance but an agreement that the rental company won't hold you responsible for damage or theft. Think of it as car excess insurance, where you waive the excess charges.

With rental car insurance:

If you have a comprehensive rental car insurance policy, it will likely cover damage to the rental vehicle, similar to the LDW/CDW. However, just like with your personal comprehensive and collision coverage, your policy may have limitations or exclusions, and you'll likely have to pay a deductible. It's important to review the terms and conditions carefully to understand the extent of your coverage and any associated costs.

Damage inflicted on others

At the counter:

The rental company might offer supplemental liability protection, which covers damage you cause to other people and their property while driving the rental car. This can be a good option if you don't have your own auto insurance or if your existing coverage doesn't extend to rentals.   

Rental car insurance:

Many rental car insurance policies include liability coverage as a standard feature. This will protect you financially if you are found at fault for an accident that causes damage to other vehicles or property.   

Injuries that occur to you:

At the counter:

You might be offered personal accident insurance, which covers medical expenses for you and your passengers if you're injured in an accident involving the rental car. However, this availability will depend on your rental car provider. 

Rental car insurance:

Some rental car insurance policies include some level of personal injury protection, though the coverage may be limited. It's essential to check your policy details to see what's included and consider whether you need additional coverage through travel medical insurance or other types of health insurance.

Theft of personal property:

At the counter:

The rental company might offer personal effects coverage, which reimburses you for belongings stolen from the rental car. This can be helpful, but it often has limits on the value of covered items.   

Rental car insurance:

Rental car insurance typically doesn't cover personal belongings. For that, you'll need to rely on a separate travel insurance policy that includes coverage for lost or stolen luggage and personal effects or an eligible renters insurance policy.

>> MORE: Best travel insurance plans for road trips

If you’re jetting off soon, it’s also useful to know that some credit cards offer rental car insurance benefits as a perk when you use them to book your rental. This can be a convenient option, but it's crucial to understand the details of their policies. Credit card coverage typically falls into two categories: primary and secondary. Primary coverage means the credit card's insurance is the first line of coverage, while secondary coverage only kicks in after your personal auto insurance.

So, before relying on your credit card for rental car insurance, you should contact your credit card provider to clarify the specifics of their coverage. You should enquire about exclusions, such as specific countries or types of vehicles that may not be covered.

It's also important to note that most Singaporean credit cards do not offer full liability or rental car excess coverage. This means you might still be responsible for significant costs if you're involved in an accident. Therefore, it's crucial to consider whether your credit card's coverage is sufficient for your needs, especially if you require comprehensive collision coverage or personal injury protection.

>> MORE: Credit cards with free or complimentary travel insurance in Singapore 2025

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 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:

Starr TraveLead Travel Insurance (Comprehensive) – Bronze

Starr Insurance Companies offers a solid foundation for travellers with its S$200,000 overseas medical cover and accidental death/disability benefits. You can add COVID-19 cover for enhanced protection, all at a competitive price of S$25.

FWD Travel Insurance – Premium

FWD's Premium plan provides up to S$200,000 for medical expenses and accidental death/disability.  However, COVID-19 cover is an add-on, increasing the total cost.

TIQ Travel Insurance – Entry

TIQ's stands out with its lower price point. While the overseas medical cover is similar to other plans, it boasts a higher emergency evacuation and repatriation benefit of S$1 million.

MSIG TravelEasy – Standard

MSIG offers a well-rounded plan with higher medical cover (S$250,000) and built-in COVID-19 protection.  It also includes substantial benefits for emergency evacuation and personal accidents, making it a good choice for comprehensive cover.

If you’re driving overseas, you may not need to buy rental car insurance if:

• Your credit card already provides sufficient rental car insurance coverage.

• Your existing travel insurance policy includes comprehensive rental car coverage.

• You're renting in a country where your existing car insurance extends coverage.

It’s recommended to get rental car insurance if:

• You want more extensive coverage than what your credit card or travel insurance offers.

• You're renting a high-value vehicle or one that falls outside the coverage of your existing policies.

• You're travelling to a country with different driving laws and regulations, where having extra coverage could be beneficial.