Why does car rental insurance matter? When you rent a car in Taiwan, most rental companies only cover their vehicles with compulsory liability insurance, which falls far short of the risks you could face. If an accident happens, repair bills, medical costs and other large expenses can turn your trip into a financial nightmare.
Car rental insurance exists to cover the amounts compulsory insurance can’t, and you can buy it for a specific “set period” that matches your rental trip!
Who should buy car rental insurance? What does it actually cover?
This article walks through every detail of car rental insurance so that anyone about to rent a car can understand it at a glance, without getting caught out by the fine print or left with no coverage at all.
Why buy car rental insurance? What it’s really for
When you rent a car in Taiwan, car rental insurance exists so you don’t have to pay out of pocket and chalk it up to bad luck every time something goes wrong. It covers situations like these:
1. Are you sure the car you’re renting has full insurance coverage?
The cars rental shops provide don’t necessarily carry full coverage such as third-party liability or passenger insurance; typically they only have compulsory vehicle insurance.
That means if you collide with another vehicle, the repair costs for both the rental car and the other party’s car come straight out of your own pocket!
2. Short trips call for flexible coverage
Besides self-drive road trips, a same-day rental may be a last-minute decision. Like travel insurance, car rental insurance can be purchased as little as one hour before you pick up the car, giving you solid protection even for spur-of-the-moment rentals!
What is car rental insurance?
Car rental insurance mainly provides coverage during the rental period, including damage to the rented vehicle’s body, injury or death and property loss suffered by third parties, and liability for injury to passengers. It protects not only the vehicle itself, but also the driver and passengers against accidents along the way.
A breakdown of what car rental insurance pays out for
- Own-damage (vehicle body) liability insurance
What it covers: If you’re involved in a collision while driving the car and “your own vehicle” is damaged and needs repair, this insurance pays a set amount toward the repair costs caused by the accident. It does not cover natural disasters, stolen parts and similar losses.
Payout amount: Usually a capped payout of roughly NT$50,000 to NT$300,000. Some policies include a deductible of NT$5,000 to NT$10,000.
Example: Coverage limit NT$100,000, deductible NT$5,000 → the rental car is involved in an accident with NT$50,000 in repair costs; the policy pays NT$45,000 and you cover the remaining NT$5,000.
- Third-party liability insurance
Everyone other than the driver and passengers counts as a third party, and third-party liability insurance is split into two types: “bodily injury” and “property damage.”
Third-party bodily injury liability insurance
What it covers: This insurance pays for third-party bodily injury costs that “compulsory insurance” can’t cover, in other words it makes up the shortfall that “compulsory insurance” leaves behind!
Payout amount: Usually a capped payout of up to NT$1 million to NT$2 million per person, with a per-accident ceiling ranging from NT$1 million to NT$20 million.
Example: Coverage of NT$2 million per person / NT$10 million per accident → the accident injures pedestrians A, B and C; the policy pays up to NT$2 million in bodily injury costs per person, NT$6 million for all three.
Third-party property damage liability insurance
What it covers: Both “compulsory insurance” and “third-party bodily injury liability insurance” only pay out for injuries to “people”; objects and property aren’t covered by either. Third-party property damage liability insurance fills that gap, covering damage to a third party’s vehicle, objects and property!
Payout amount: Usually a capped payout of NT$100,000 to NT$500,000 per accident.
Example: Coverage of NT$300,000 per accident → the accident causes NT$280,000 in repair costs to the other party’s car; the policy pays this amount based on your share of liability.
- Passenger injury liability insurance
What it covers: If the rental car is involved in an accident and “passengers” in the car are injured or killed, this insurance covers those costs.
Payout amount: Usually a capped payout of up to NT$1 million to NT$2 million per person, with a per-accident ceiling of NT$1 million to NT$2 million.
Example: Coverage of NT$1 million → the accident injures two passengers in your car, with medical costs of NT$200,000 each; the policy pays this amount based on your share of liability.
- Travel insurance
What it covers: Some domestic travel insurance policies in Taiwan include car rental coverage, so the standard travel insurance benefits also apply, such as accidental death and disability coverage, medical expenses for injuries, home fire coverage, burglary compensation, food poisoning coverage and major burns while traveling.
Payout amount: Because travel insurance covers so many items, some benefits are fixed payouts, some are reimbursement of actual expenses and some are capped payouts. Read the policy terms carefully before you buy!
- Does car rental insurance cover single-vehicle accidents?
Yes, it can, but right now only the travel-plus-car-rental insurance from Mingtai Insurance offers it. All other car rental policies only cover “collisions with another vehicle”!
Mingtai Insurance own-damage liability policy wording: If the insured is involved in a collision while driving someone else’s car or in an accident such as a rollover, the insurer pays according to the insured’s liability. (Repair costs)
Fubon Insurance own-damage liability policy wording: For damage or loss caused when the insured is driving someone else’s car and collides with a vehicle or sideswipes one, the company is liable to compensate the insured in accordance with this policy.
Jishibao Plan A, B and C policy wording: Plans A, B and C apply only to accidents involving a collision with another vehicle, and compensation does not include loss of business income or depreciation.
Cathay Century Insurance rental vehicle body coverage wording: If the rented car is damaged because it collides with a vehicle or sideswipes one while being driven, the insurer bears the liability (collisions not involving another vehicle are not covered).
- Does car rental insurance cover the rental shop’s loss of business income?
No! No! Really, no!
Not a single car rental insurance product currently on the market compensates a rental shop for lost business income. Think carefully about your own situation before you rent a car and buy coverage.
Recommended car rental insurance
The table below uses “a three-day rental with the highest coverage tier” as the basis for estimating the coverage and premiums of each product. Insurers that don’t offer car rental insurance aren’t listed. Compare them against your own needs and pick the product that suits you best!
| Insurance plan | Estimated premium | Vehicle body coverage | Third-party bodily injury | Third-party property damage | Passenger injury | Travel coverage |
|---|---|---|---|---|---|---|
| Mingtai Insurance Domestic travel + car rental insurance | NT$801 Get covered | Limit NT$300,000 Deductible NT$5,000 | Limit NT$1,000,000/person Limit NT$2,000,000/accident | Limit NT$100,000 | – | ✅ |
| Cathay Century Insurance Car rental insurance, advanced plan | NT$480 Get covered | Limit NT$200,000 | Limit NT$2,000,000/person Limit NT$4,000,000/accident | Limit NT$500,000 | Up to NT$1,000,000 | ❌ |
| Cathay Century Insurance Car Rental Travel Accident Insurance, Advanced Plan | NT$631 Get covered | Up to NT$200,000 | Up to NT$2,000,000/person Up to NT$4,000,000/accident | Up to NT$500,000 | Up to NT$1,000,000 | ✅ |
| Fubon Insurance Domestic Travel Accident Insurance | NT$860 Get covered | Up to NT$150,000 | Up to NT$1,000,000/person Up to NT$1,000,000/accident | Up to NT$100,000 | – | ✅ |
| 吉時保 (Jishibao) Short-Term Rental Plan C | NT$757 Get covered | Up to NT$200,000 | Up to NT$2,000,000/person Up to NT$20,000,000/accident | Up to NT$500,000 | Up to NT$2,000,000 | ❌ |
| Tokio Marine Newa Insurance Domestic Travel Accident Insurance with Car Rental Add-On | NT$488 Get covered | Up to NT$50,000 | Up to NT$100,000/person Up to NT$200,000/accident | Up to NT$30,000 | – | ✅ |
Why is car rental insurance included in domestic travel insurance?
In Taiwan, a rental car is usually just a way to get around while traveling domestically. So besides the dedicated car rental policies above, some insurers also include a “self-drive rental” item in their domestic travel accident insurance plans.
If you only need a car for short trips around town — point-to-point rides in the city, commuting to work and so on — you can simply buy a dedicated short-term “car rental insurance” policy before you pick up the car!
The differences between travel accident car rental insurance and plain car rental insurance are as follows:
1. Car rental insurance focuses on the vehicle itself
Car rental policies such as Cathay Century’s Worry-Free Rental Car plan and 吉時保 (Jishibao) are designed specifically for short-term rentals. Their coverage centers on physical damage to the car and third-party liability — in other words, it mainly protects the “rented vehicle” and covers “third parties’ property damage and bodily injury.” Injuries to the driver are not included!
2. Travel accident car rental insurance also covers the trip itself
Travel accident car rental plans from insurers like Fubon Insurance and Mingtai Insurance cover accidental death and disability during the trip, and they also add protection for the “driver” — medical expenses for injuries, for example — which fills the gap that plain “car rental insurance” doesn’t cover!
| Car rental insurance | Travel accident car rental insurance | |
|---|---|---|
| Vehicle coverage | Focuses on physical damage and third-party liability, with solid protection | Covers the vehicle plus various risks during the trip |
| Driver coverage | Limited coverage for injuries to the driver | Includes medical expense coverage for injuries, filling the gap in personal protection for the driver |
| Best for | Short-term rentals, commuting and other brief rental needs | Self-drive trips in Taiwan and longer rentals for sightseeing |
Overseas car rental insurance
Renting a car and driving yourself overseas is a wonderfully free way to travel. Whether you’re renting in Japan, Korea, Europe or the US, once you’re on the road you need a plan for accident risk. In addition to the travel accident insurance mentioned above, we strongly recommend that you take the insurance offered by the rental company!
Planning a trip to Japan soon? Take a look at this article on car rental insurance in Japan: [Japan car rental] 2026 rental guide and price comparison for a truly free road trip in Japan!
Thinking of renting a car in Korea? Check out this breakdown of Korean car rental insurance: [Korea car rental guide] Recommended companies, insurance explained and everything to watch out for!
Heading to the US for a road trip? This article explains US car rental insurance in detail: [US car rental roundup] The latest 2026 guide with nine things you need to know!
Things to keep in mind when buying car rental insurance
Timing is flexible, but don’t forget to buy it
Most car rental policies let you sign up as late as one hour before departure, but some are domestic travel accident policies, and for those it’s better to buy at least a week in advance.
If a short, last-minute rental comes up, just remember to buy coverage an hour before you pick up the car!
Don’t cut the coverage period short
Whether it’s a quick short-distance rental or a long self-drive trip, we recommend that your coverage start the moment you “pick up the car” and end the moment you “finish returning it.” It’s also smart to add an extra hour of buffer on each end — if traffic delays your return, your coverage could run out while you’re still stuck in the jam!
Double-check the details before you buy
- Check whether each policy’s plan details and payout limits suit your needs
- Read the claim conditions for every coverage item carefully, including what documents you need to file a claim
- Confirm the age limits and any special conditions, and make sure you meet the eligibility requirements
Car rental insurance FAQ
Q: Are there any restrictions on where the rented or borrowed car comes from?
A: Most insurers simply require that the car is not registered to you or your spouse, and that it is not registered to a company you are responsible for — if so, you can go ahead and rent and insure it with peace of mind!
Q: Can I buy rental car insurance for any vehicle I rent?
A: Any rented vehicle that is a passenger car or passenger/cargo vehicle with nine seats or fewer (taxis and ambulances excluded) is eligible for rental car insurance.
Q: Can I buy rental car insurance for a scooter or a large motorcycle?
A: No. There are some separate products for motorcycle rental insurance, but none of the rental car insurance policies above cover scooters or large motorcycles !
Q: Several of us will be sharing the driving in this rental car. Does everyone need to buy rental car insurance?
A: The policyholder must be a driver, so you need one policy for each person who will drive the car. With the rental car insurance described above, the insured party is always the “driver of the vehicle.” At the same time, the policyholder does not have to be the person who rented the car.
Q: The rental car’s owner already has insurance on it. Do I still need to buy rental car insurance?
A: The items covered are completely different. Rental car insurance protects you, the driver renting the car, while the owner’s auto insurance protects the vehicle. So we still recommend adding the matching rental car insurance for yourself as the renter!
Q: Does today’s rental car insurance cover the rental company’s loss of business income?
A: No! No! Really, no!
None of the rental car insurance products currently available cover a shop’s loss of business income. Before buying, think carefully about your own situation when renting a car and choosing insurance.
With rental car insurance, you’re never left without help after an accident
All of the rental car insurance options above can be purchased online. As for whether to choose a policy that includes travel insurance or pure rental car coverage, weigh and compare them based on how you plan to use the car!
Either way, it’s better to be safe than sorry. The car you’re driving today isn’t the one you’re used to, and if you don’t drive often, it’s still a good idea to choose a rental company with solid vehicle insurance and to add one of the policies above for extra peace of mind during your trip.
Read more articles about insurance:
👉Travel insurance recommendations | 2026 travel medical and travel inconvenience insurance: coverage and claim rules at a glance!
👉Compulsory insurance: understand rental car insurance claims in seconds
👉Rental car insurance: understand collision coverage claims in seconds
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This article was translated by AI from the original Chinese version.
