Car insurance when driving abroad
Whether you’re taking your own car abroad or hiring a car when you get there, you have to have insurance. Be careful – it’s easy to spend too much on unnecessary car hire cover and the excess can be very high.
If you’re taking your own car abroad
Inside the EU, your normal insurance will automatically give you the minimum legal requirement in each country.
However, you should:
- Talk to your insurance company about extending the minimum cover to include damage to your car and theft.
- Consider getting separate breakdown cover.
If you live in Northern Ireland
If you live in Northern Ireland always check your policy covers you to drive in Southern Ireland. Some insurers class Republic of Ireland as abroad and do not offer cover as standard.
If you’re hiring a car abroad
1. Check what’s included in the car hire
Depending on the country you’re travelling to, you might be legally obliged to have three types of basic insurance and they are usually included in your car hire costs and contract:
- Cover for the theft of the vehicle - know as ‘theft protection’ or ‘vehicle theft cover’
- Cover for damage to the vehicle – also known as ‘collision damage waiver’, ‘damage excess waiver’ or ‘vehicle damage cover
- Cover for injury or property damage suffered by a third party – also known as ‘third party cover’ or ‘supplementary liability’
2. Get to grips with credit card pre-authorisation
When you sign a car rental agreement, it usually includes an authorisation for the rental company to charge your credit card for additional items.
This is why you normally have to show your credit card at the desk when you pick up your hire car.
The car hire company can take a payment from your card without telling you or getting your permission.
In theory, a car rental company could charge you the full ‘excess’ cover for even minor damage to the car.
Make sure you check the car thoroughly and record every scratch and mark.
When you take it back make sure the hire company signs and records every mark so that you both agree the condition it was returned in.
3. Check the small print
Read all terms and conditions online before you buy (although sometimes the full documentation is only available at the desk) when you go to pick up the car.
- Check you’re covered for unlimited daily mileage if you’re travelling long distances (for example in Australia).
- Check your credit card statement at the end of your travels to make sure there are no rogue charges. If there are any charges you want to dispute report them to both the hire company and your credit card provider who will help resolve this for you.
Watch the excess on your hire car insurance
Most car hire companies charge a very high excess (between £500 and £1,500).
They could potentially end up charging you very large amounts for even small scratches.
Consider excess insurance so you don’t pay excess
You can always cover yourself by buying excess reimbursement insurance, which enables you to claim your excess back (if charged).
This cover includes things not usually included in any top-up insurance, for example tyre damage or lost keys.
But you can’t get it for prestige vehicles or camper vans.
There are two kinds of cover:
- Daily policy – starts at around £3
- Annual policy – around £39 (so often good value for a fortnight or more)
Don’t buy ‘top-up insurance’ from the car hire firm
Your car hire company will try to sell you top-up insurance – known as ‘super collision damage waiver’, ‘deductible cover’ or ‘non-waiver cover’ – which reduces your excess to zero.
This top-up insurance is very expensive (around £10 a day). It tends to exclude theft, vandalism, damaged tyres, lost keys and use of wrong fuels.
It can be poor value for money and not worth it.