[Self-drive Travel Insurance Comparison] Which travel insurance offers better rental car cover? Compare excess, NOC and premiums

In recent years, more and more Hong Kong people have enjoyed self-drive trips overseas. This offers greater flexibility in planning itineraries, while also allowing them to explore local attractions in greater depth. However, car rental insurance and Travel Insurance are not a choice between one or the other, but rather complementary. In the event of an accident, the “rental vehicle excess” is often where the protection gap lies. Policyholders should focus on comparing the maximum excess cover and the number of claims allowed, because a high insured amount does not necessarily mean the cover is complete. In addition, NOC (loss of use compensation), excluded vehicle types and claim conditions also affect the actual level of protection. As a major insurance platform in Hong Kong, 10Life will explain each of these points in turn, so that everyone can travel with peace of mind. 

What is commonly referred to as “self-drive travel insurance” is not an independent insurance product, but refers to basic travel insurance that includes, or offers as an optional add-on, “Rental Vehicle Excess Coverage”. As for the motor insurance provided by the local car hire company, this is arranged by the car hire company and may already be included in the rental fee, or may need to be purchased separately. It generally comes with a fixed excess (also known as a “deductible”).

In other words, if an accident occurs involving a hired vehicle, the car hire company’s insurance may not fully cover the repair costs, and the renter may first have to bear the excess specified in the contract. Rental vehicle excess coverage under travel insurance can then reimburse all or part of the relevant costs in accordance with the policy terms.  

Further reading:
Which travel insurance is best? Experts show you 10 key details to check when choosing travel insurance
[Annual Travel Insurance Comparison] Which annual plan scores highest? When is the best time to buy? 

Vehicle Damage Waiver (CDW)

Insurance provided by overseas car rental companies generally covers vehicle damage, but it comes with an excess. In Japan, for example, the excess is usually around JPY 50,000 to 100,000; in South Korea, it can range from several hundred thousand Korean won. In both places, you can usually purchase an additional CDW or Zero Deductible plan to reduce the excess. In Hong Kong self-drive travel insurance, the car rental excess cover (typically around HKD 5,000 to 15,000) is specifically designed to reimburse this cost; if the excess stated in the rental agreement is higher than the cover limit, the policyholder must bear the difference.

Car Rental Excess Cover

Car rental companies’ insurance usually only starts paying out after the excess has been exceeded, whereas the “car rental excess cover” in self-drive travel insurance can directly reimburse this excess, easing unexpected expenses. However, it is important to check whether the scope of cover includes NOC (loss of use charges), as policy terms vary between insurers. You should read the relevant terms carefully before purchasing.

Medical

The insurance provided by car rental companies mainly focuses on vehicle damage and third-party liability, and medical cover for drivers and passengers is generally limited or even absent. In contrast, travel insurance offers higher overseas medical cover, including emergency medical evacuation, hospitalisation and surgery expenses.

Third-Party Liability

Basic car rental insurance in Japan, South Korea and Taiwan usually already includes liability cover for third-party bodily injury and property damage. However, Hong Kong self-drive travel insurance generally does not cover such third-party liability—if the policyholder negligently damages another person’s vehicle or property while driving, the self-drive travel insurance will not cover the loss, and the claim must be handled by the car rental company’s insurance. It is therefore essential to confirm before departure whether the car rental company’s basic insurance provides sufficient third-party liability cover.

Other Travel Risks

Self-drive travel insurance is attached to standard travel insurance, so it also covers baggage loss, flight delays, trip cancellation and loss of personal belongings. 

Further reading:
【Travel Insurance】Compare trip delay cover across 10 products — can flight delays be compensated up to $3,600?    
【Travel Insurance Mobile Phone / Computer / Camera Cover】Compare personal belongings cover across 9 popular travel insurance plans (with claim tips) 

The key protection points to check vary depending on the car rental arrangement: 

Calculation example 

If you are unfortunately involved in a traffic accident or your vehicle is damaged during a self-drive trip, you should report the incident to the police immediately and obtain a police report or accident record from the local authorities. At the same time, remember to keep the car rental receipt, repair invoices, medical reports and relevant expense receipts, so that you can apply for insurance compensation later.

Most insurers require claims to be submitted within 21 to 30 days after the incident, so it is advisable to handle the matter as early as possible to avoid missing the deadline. If the insurer offers online claims or electronic document upload services, this can save time and speed up the approval process. If you are unsure, you may first call the insurer’s claims hotline for assistance to ensure the application is completed smoothly. 

Self-drive Travel in Japan

For self-drive travel in Japan, the mandatory third-party liability insurance (“Jibaiseki Hoken”) covers third-party bodily injury and death. The rental car company’s excess is generally around JPY 50,000 each, while property damage and vehicle damage total about JPY 100,000. CDW can waive the excess, but it generally does not include NOC (non-operation charge) compensation for business interruption.

Further reading:
【日本自駕遊攻略 2026】香港人自駕遊日本12大注意事項
內地自駕遊有咩要注意？內地租車VS 港車北上點揀好？

Self-drive Travel in Korea

Korea’s mandatory liability insurance is generally already included in the rental fee, but the vehicle damage excess remains payable by the renter. Renters may consider purchasing additional CDW or a zero-excess option to reduce the risk of vehicle damage excess.

Self-drive Travel in Taiwan

Taiwan’s compulsory insurance is generally already included in the rental fee, while the vehicle damage insurance excess is approximately TWD 5,000 to 10,000. Renters should assess, based on the car rental contract and their travel needs, whether to purchase comprehensive cover. 

If you want to save time, compare over 70 travel insurance plans in the market instantly to see the cover and premiums at a glance, with actuarial ratings specially provided.

1. The rental company already has insurance — do I still need to buy travel insurance?

Yes. The rental company’s motor insurance mainly covers vehicle damage and third-party liability; travel insurance, on the other hand, covers risks such as overseas medical expenses, lost baggage, flight delays and trip cancellations. If the rental insurance has an excess, you may also claim reimbursement through the rental car excess cover under travel insurance.

2. What is NOC? Is it covered by travel insurance or Collision Damage Waiver (CDW)?

NOC is the business loss compensation charged by the rental company for vehicle repairs and the period when the vehicle cannot be rented out, and it is different from the vehicle repair excess. CDW, comprehensive rental car insurance and travel insurance may not include NOC, so you should check separately with the rental company and the insurer before taking out cover.

3. What should I pay attention to when choosing self-drive travel insurance?

In addition to comparing the cover limit for rental car excess, you should also note the number of claims allowed per trip, whether vehicle types such as SUVs, campervans and motorcycles are covered, and whether the nominated driver, driving roads and rental agreement meet the policy requirements.

4. How should I make a claim after an accident during an overseas car rental?

You should first ensure everyone is safe, report the incident to the police and notify the rental company, then take photos of the scene and the vehicle damage. Keep the police record, rental agreement, accident report, repair documents and proof of excess payment; generally, you must first pay the excess to the rental company before applying for reimbursement from the travel insurance company.

5. In what situations might a claim be rejected?

Common situations include driving by a driver not named in the contract, no valid driving licence, drink-driving or unlawful driving, breach of the rental agreement, failure to report to the police or notify the rental company as required, driving on non-covered roads, and use of non-covered vehicle types. Pre-existing damage to the vehicle or normal wear and tear are also usually not covered. 

This English version of this article has been generated by machine translation powered by AI. It is provided solely for reference purposes. In the event of any discrepancy or inconsistency between this translation and the original Chinese version, the Chinese version shall prevail.