Author
Bowtie Team
Updated on
2025-06-12
Disclaimer: This article is translated with the assistance of AI.
Wondering about deductibles in self-drive travel insurance? Does it include third-party liability? Bowtie breaks it down, compares plans, highlights exclusions, and shares essential driving tips for worry-free adventures!
What is the ‘Excess’ Coverage for Car Rentals in Travel Insurance?
When we rent a car while traveling abroad, the rental company generally explains that if an accident occurs and causes vehicle damage, the customer must bear a certain amount themselves—this is the “excess,” commonly known as the “deductible” or “out-of-pocket fee.” In travel insurance policies, the “excess” coverage for self-drive trips specifically provides protection for this excess amount. Here are some examples to help you understand how this coverage works in practice.
Suppose Mr. A is renting a car abroad for a self-drive trip. Due to heavy rain and poor visibility at night, he has an accident and crashes into a hillside. Thankfully, no one is injured, and there’s no damage to public property or other assets, but the car’s hood and front bumper are damaged. Mr. A immediately reports the incident to the police and obtains an accident report. The next day, when he returns the vehicle to the rental company, they inform him that he must cover the excess for the damage, amounting to HK$4,000.
- Scenario 1: If Mr. A’s travel insurance provides “excess” coverage of HK$5,000, he can successfully claim from the insurer and won’t have to pay any excess or repair costs himself.
- Scenario 2: If Mr. A’s travel insurance provides “excess” coverage of HK$2,000, after successfully claiming from the insurer, he’ll still have to cover the remaining HK$2,000 difference himself.
- * The above examples are purely fictional and for illustrative purposes only. In reality, the coverage and compensation under policies are subject to the terms published by individual insurance companies.
Does the Car Rental Company Provide Insurance?
As mentioned in the examples above, in the event of a traffic accident and vehicle damage, the rental company charges the at-fault customer the “excess” rather than the full repair costs. In fact, major or chain rental companies typically insure the rented vehicles, and the basic rental fee already includes this insurance premium. So, even if the car is a total loss, the customer only needs to pay the specified “excess,” not the full vehicle value, which could run into tens of thousands.
Keep in mind that different rental companies have varying “excess” amounts, which can differ significantly. When renting a car for your trip, be sure to check this carefully and assess whether your travel insurance ‘s “excess” coverage is sufficient.
Beyond vehicle damage compensation, rental companies often set “excess” amounts for “third-party property damage” and “business interruption compensation (NOC),” along with specific limits. However, note that travel insurance generally doesn’t cover these two types of “excess,” so renters must pay attention. Larger rental companies usually offer additional coverage options that eliminate any personal liability after an accident, which you might consider purchasing.
Also, be aware that some independently operated or smaller rental companies may have different insurance and compensation policies than described here. In cases of vehicle damage or total loss, you might be responsible for higher costs, so always understand the company’s policy before renting.
Does Travel Insurance Cover Third-Party Liabilities from Self-Driving?
No, travel insurance generally does not cover third-party liabilities arising from self-driving during a trip, such as injuries, fatalities, or property damage caused by traffic accidents (e.g., damage to road signs, barriers, or buildings). Therefore, when renting a car for self-driving, you must confirm if the basic rental fee includes third-party liability insurance for personal injury and property. If not, ask the rental company to add an extra coverage option.
Examples of Car Rental Company Insurance Policies
Take TOYOTA Rent a Car, one of the largest and most familiar car rental companies in Japan among Hong Kong people, as an example. The company states that the basic rental fee includes insurance for third-party personal injury and property, vehicle insurance, and coverage for passenger injuries. They also specify an “excess” for business interruption compensation (NOC).
Additionally, they offer optional insurance add-ons that allow customers to waive the “excess” and NOC compensation altogether.
What ‘Excess’ Coverage Doesn’t Cover
Different insurance companies have varying exclusions for ‘Excess’ coverage. It’s essential to understand these before purchasing a policy. Here are some common exclusions:
- The driver of the rented vehicle at the time of the accident is not the one listed in the rental agreement
- The insured or the driver listed in the rental agreement violates the rental contract terms
- The insured or the driver listed in the rental agreement violates local traffic laws or other laws (such as running a red light, speeding, drunk driving, etc.)
- The rented vehicle itself is already damaged, has existing or potential defects
- Natural wear and tear of the rented vehicle’s parts
- Business loss compensation (NOC) (for some policies)
Comparing Self-Drive Coverage in Top 6 Plans
Besides ‘Excess’ coverage, when on a self-drive trip abroad, you should also pay attention to the medical and accidental death compensation in travel insurance. Below, we’ve compiled the relevant coverage from 6 popular products on the market:
| Insurance Company | Excess Coverage ($) | Medical and Emergency Support Coverage Limit (HK$) |
| Insurance Company F | $5,000 | Medical total limit: $1,500,000
Return to Hong Kong follow-up limit: $1,500,000 (for accidents) Accidental death compensation: $1,500,000 (for self-drive accidents) |
| Insurance Company BO | $8,000 | Medical total limit: $1,500,000
Return to Hong Kong follow-up limit: $120,000 (for accidents) Accidental death compensation: $2,000,000 (for self-drive accidents) |
| Insurance Company BC | $5,000 | Medical total limit: $1,200,000
Return to Hong Kong follow-up limit: $120,000 (for accidents) Accidental death compensation: $1,200,000 (for self-drive accidents) |
| Insurance Company S | $5,000 | Medical total limit: $1,500,000
Return to Hong Kong follow-up limit: $750,000 (for accidents) Accidental death compensation: $750,000 (for self-drive accidents) |
| Insurance Company Z | $20,000 | Medical total limit: $1,500,000
Return to Hong Kong follow-up limit: $1,500,000 (for accidents) Accidental death compensation: $1,000,000 (for self-drive accidents) |
| Insurance Company C | $5,000 | Medical total limit: $1,000,000
Return to Hong Kong follow-up limit: $100,000 (for accidents) Accidental death compensation: $600,000 (for self-drive accidents) |
6 Key Tips for Self-Drive Travel
Prepare a Valid International Driving Permit
Before you hit the road, make sure you have your International Driving Permit (also known as an international driving license) ready. If you’ve already applied for one, double-check that it hasn’t expired (they’re good for just a year). And don’t forget to bring your Hong Kong driving license along for comparison purposes when dealing with rental companies or local authorities.
Assess the Need for Additional Car Rental Insurance
Keep in mind that travel insurance typically only covers the excess on a rental car and doesn’t include third-party liability. Some policies might not even cover NOC, and the basic insurance from rental companies (included in your rental fee) can vary widely. So, before you drive off, do your homework and decide if you need to add extra coverage from the rental company.
Carefully Inspect the Vehicle Condition
Any pre-existing damage or defects on the rental car aren’t covered, so it’s on you to give it a thorough once-over. If you spot any visible damage or mechanical issues, point them out right away and ask the rental company to note it in the contract. If it’s serious, request a different vehicle to avoid any headaches when you return it.
Understand and Obey Local Traffic Laws
Traffic rules and regulations can differ greatly from one country or region to another, so brush up on the local driving laws and customs before you go. Once you’re behind the wheel, always follow the rules of the road and steer clear of violations like speeding or drunk driving.
Be Mindful of Weather and Road Conditions
Overseas weather and road conditions can be a far cry from what you’re used to in Hong Kong—for instance, mountain areas might have steep, narrow turns, winter could bring icy or snowy roads, and some routes might lack proper lighting at night. Stay extra alert, drive at a safe speed, and don’t hesitate to seek help if needed. If you’re not confident, it’s smart to bring along a friend with driving experience.
Report Accidents to the Police Immediately
If you get into a traffic accident abroad, no matter who’s at fault or if there’s injury or damage, call the police right away. They’ll handle the follow-up properly, and remember to get a copy of the police report for your records.
Overseas Self-Drive Travel Claims Guide
If you’re involved in a traffic accident during an overseas self-drive trip and need to make a claim with your insurance company, note that travel insurance usually has a claim submission window of 21 to 30 days. Once you gather the necessary documents, submit your claim as soon as possible.
- Rental car receipt (including any NOC payment receipt)
- Rental car insurance proof
- Traffic accident certificate (i.e., the local police report)
- Hospital admission proof/medical report (only if you’re claiming for medical expenses due to injury)
Why Get Health Insurance Even If You Have Travel Insurance?
Overseas hospital stays and surgeries can be incredibly expensive, and if those costs exceed your travel insurance limits , you’ll end up footing the bill yourself. That’s where having health insurance* comes in handy—it can help cover those extra medical expenses and lighten your financial load.
- * Different health insurances cover various regions; consumers should check the terms and conditions before purchasing and claiming.
Why Bowtie Pink is the Perfect Companion for Travel Insurance
Bowtie Pink VHIS Plan offers multiple selling points, whether for children or seniors, as long as you love to travel, Bowtie Pink can be your health backup:
- Anyone from 15 days to 80 years old can apply for coverage
- Coverage applies worldwide ^
- Global emergency support services
- Full compensation 1 for any hospital, any surgery
- Annual limit: Up to HK$20,000,000 (recalculated annually)
- Monthly premium as low as HK$168 #
- ^ Excludes hospitals in the US and China not on the specified list; psychiatric treatment is limited to Hong Kong.
- # Based on the monthly premium for a 25-year-old non-smoker subscribing to Bowtie Pink (Ward) with a deductible option of HK$80,000.
- 1 Full compensation means no sub-limit on claims and applies only to specified coverage items. The payable compensation is subject to the remaining deductible (if applicable), annual limit, lifetime limit, and other factors including reasonable and customary charges, pre-existing conditions, specified hospitals in mainland China, and matters related to treatment in the US. For detailed terms, conditions, product risks, and exclusions, please refer to the relevant product website and policy.
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