Renting a Car Abroad? Get Insurance

Renting a Car Abroad? Get Insurance

Most credit cards offer liability protection for rental cars in Europe, but they may not cover theft/loss. In addition, a car-rental counter agent may try to sell you their collision damage waiver (CDW).

Vacation insurance, on the other hand, typically covers only unforeseen expenses, not rental car damages. To get the most out of your coverage, you must understand both the rules and fine print.

Know What You’re Covered For

A rental car opens up a world of awe-inspiring sights that are tucked away in places public transportation can’t reach. But renting a car can also be costly, so many travelers look for ways to save money. One way is by obtaining additional insurance coverage for the vehicle.

Most major credit cards offer some form of rental car insurance, but the exact coverage varies. The most common is collision damage waiver (CDW) and loss damage waiver (LDW), which covers damage to the rental car, including its replacement cost — up to a limit specified in the policy. Some cards also include personal effects coverage, which pays for items stolen from the vehicle up to a set amount.

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These policies typically act as secondary coverage, meaning that any claims go through your auto insurance first and your credit card company second. If you choose to decline the rental company’s CDW or LDW, make sure you have proof of your own coverage to ward off any hard sell from counter agents.

Other types of coverage to consider include trip cancellation/interruption insurance, supplemental liability insurance and personal accident coverage. These can help with unexpected expenses, such as a medical emergency or lost luggage. They may be included in a travel package or available as standalone products. Some auto insurance companies offer supplemental liability coverage that applies when you rent a car in the United States or internationally, but be aware that these policies are often subject to high deductibles and limit coverage to the value of the actual cash value of the rental vehicle.

Check With Your Credit Card

Credit card companies vary in how they offer rental car coverage. Some cards provide primary protection that effectively replaces the rental agency’s insurance — this is known as “car rental collision damage waiver” or “loss damage waiver.” The coverage is typically offered on select premium cards with high annual fees. Other cards may offer secondary coverage that’s in addition to your own auto insurance policy.

If you’re planning on using a credit card to cover the rental car, you should contact the benefits administrator before you travel. Ask for a proof-of-coverage letter that summarizes the terms of the policy and which countries it applies to. Then, bring that with you to the rental car counter. This can help you avoid a hard sell for extra coverage from the car rental agency.

Note that some credit cards that offer coverage only include liability protection. To use it, you must be listed as the driver and pay for the rental using the card with coverage. In most cases, you must also decline the rental car company’s collision damage waiver to activate the card’s protection.

Other credit cards that offer rental car coverage only provide secondary protection and don’t replace your own auto insurance. Some also exclude coverage for certain types of vehicles or locations. In any case, you should read your cardholder’s agreement carefully to see if there are any caveats that apply to your specific situation.

Buy Supplemental Coverage

If your personal auto insurance policy doesn’t cover rental cars, or if it does but doesn’t offer enough protection, you can buy additional coverage. Typically, this is offered by credit card companies as an add-on or a feature of their travel or car insurance policies. It may also be available through some travel agencies. Before you purchase any extra coverage, make sure to read the fine print. There are a few things to consider, such as whether the coverage is primary or secondary and how much you’ll be reimbursed (if you have to pay a car rental agency deductible).

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Some credit cards include full liability protection in their travel or car insurance policies. To take advantage of this, you’ll usually need to decline the car rental company’s collision damage waiver (CDW) or loss-damage waiver (LDW). Typically, this is only valid for rentals made with that particular credit card and only if the renter is the primary driver. It may also only be valid in certain countries.

Other travel insurance products offer rental car coverage, but those are more like vacation insurance than actual auto insurance. This type of insurance usually covers expenses related to cancellations, emergencies or lost valuables. It’s best to research these policies and find one that fits your needs before you leave for your trip.

Know the Rules of the Road

If you want to rent a car abroad, do your research before leaving home. Check to see if your current auto insurance follows you overseas and if it meets local minimum insurance requirements. If your policy doesn’t, consider buying international auto coverage from a company that specializes in it. Then you can rest easy knowing you’ll have adequate auto coverage while you’re traveling.

It’s also important to learn the driving laws of your destination country before you get behind the wheel. Road conditions, speed limits and driving norms are often very different than in the United States. For example, many European cities have narrow streets that require skill and patience to navigate. It’s also a good idea to know which side of the road to drive on, basic signs such as stop and how to park legally.

Lastly, read the rental car contract carefully to determine what’s covered and what isn’t. Typically, the rental company will offer some form of collision insurance. This is usually an option you can decline, but it may cost you an extra fee to do so. You should also look into travel insurance policies that include rental car coverage. These are often more affordable than buying a separate policy for each trip. They also usually cover more than just rental cars, including motorcycles and RVs.

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