Car insurance when driving abroad

Whether you’re taking your own car abroad or hiring a car when you get there, you legally must 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

If you are resident in the EU, your normal vehicle insurance would automatically give you the minimum legal requirement in each country.

But now the UK has left the EU, since 1 January 2021 you’ve needed extra documentation to drive abroad. To drive in the EU and EEA (European Economic Area) you need:

  • your driving licence and vehicle registration documents (V5C) if you are taking your own car.
  • an International Driving Permit (IDP) to drive in some EU and EEA countries – this can be bought from the Post Office for £5.50.
  • proof of insurance, such as a ‘green card’.

A ‘green card’ is a certificate proving that you have motor insurance cover when driving abroad. You should apply for one if you plan to be driving in the EU and EEA, including in the Republic of Ireland.

To get a green card, ask your insurance provider – and check the policy covers you to drive in the countries you’re going to. But plan ahead, as it can take several weeks to come through. There might also be a small charge.

To find out more about driving abroad and to stay up-to-date with Brexit-related changes, see the GOV.UK website

For a list of European Economic Area countries, go to the GOV.UK websiteopens in new window

If you live in Northern Ireland

The above still applies – since January 2021, drivers in Northern Ireland now need to carry an insurance green card when driving across the border to the Republic of Ireland (as well as the rest of the EU). This is unless there’s an agreement to the contrary.

If you’re hiring a car abroad

1. Make sure you’ve got the right documents

Since January 2021, you may need an International Driving Permit (IDP) – as well as your UK driving licence – to drive in Europe The permit you need depends on which country you are visiting and how long you’re staying.

But you won’t need a green card if you’re hiring a car within the EU.

2. 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’re 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’

3. 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. Taking close-up photos of any areas for concern is good practice.

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.

4. 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). The excess is the amount you pay towards any claim.

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 normally 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 but it will avoid any arguments when you return the vehicle as any damage should automatically be covered by their own policy.

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