Car-rental insurance abroad can be a costly headache. Here is a guide on how to do it right.
It was one dinged-up rental car. Smashed driver’s-side mirror; sizable dent in the passenger-side aft bumper. And no, it wasn’t my fault—at least, not entirely. The Dublin rental agency never asked about damage when I returned the car, but I spent that night agonizing about how much insurance I had purchased and the potential hit on my wallet. Ten years later, I’m still half expecting a bill.
That incident taught me a lesson: always have comprehensive insurance when renting abroad—especially in Europe, where your personal car insurance is unlikely to be valid and deductibles are high. But rental insurance in Europe is tricky. “There are different rules for different countries,” says Paula Lyons, who runs the websitebest-car-rental-tips.com. “It can be confusing.”
To begin with, most rental rates in Europe include liability insurance, which covers damage to anything outside the car—but not to the vehicle itself. For that you need a collision damage waiver (CDW). Some companies include a CDW in the rental rate, while others sell it for $15–$30 a day; it may also be offered through your credit card provider. Whether included in the rental rate or acquired separately, a CDW in Europe carries a deductible of around $1,000–$2,000—even if the damage wasn’t your fault. And a CDW doesn’t cover your tires, windows, roof, undercarriage, or interior. Nor does it include theft (also called “loss”) insurance, which costs an extra $5–$12 a day. If your car is stolen and you don’t have coverage, you could be liable for the full value.
As if all that weren’t confusing enough, there’s something known as “super” CDW, also called “extended,” “top-up,” or “excess” CDW. These lower your deductible to nearly zero for an extra $20–$30 per day. Avis’s Super Cover policy, for example, both nixes the deductible and protects against loss. “It relieves any financial responsibility in case of accident or theft,” says John R. Barrows, a company spokesperson.
Finally, a car-rental agent may suggest that you buy personal accident insurance. This provides injury and death benefits for the driver and any passengers. You already may be covered for this by your credit card or travel insurance.
You can buy all of the above coverage from the rental-car company, but it might run as much as $80 a day with advance purchase, or even more if you buy it at the counter. Alternatively, you can rely on the coverage provided by some credit cards, but beware that these policies come with restrictions.
Another option: get a CDW from a third-party insurer; they often charge less than rental companies. Travel Guard, for one, offers a low-deductible CDW for $9 a day. But these still may not cover theft and personal accidents.
“Like any insurance, it can be expensive,” Lyons says. “That is, until you need to use it—then you’re very glad you have it.”
When you purchase a collision damage waiver (CDW), tell the insurer all the countries you’ll be visiting. Some European nations have different insurance requirements than others.
In Italy, you must buy CDW and theft-protection insurance from the rental agency.
Many credit cards don’t insure rentals in Ireland or certain vehicles (pickups; cars valued above $50,000).
Paula Lyons of best-car-rental-tips.com says you are likely to get better CDW prices through an independent insurer rather than through the car-rental company. She recommends getting a quote from tripinsurancestore.com.
When you make your reservation, ask the rental agency if it’s cheaper to buy CDW in advance, at the time of reservation. You’ll sometimes get a better price, and you can compare it to a third-party quote.
Beware of restrictions when buying third-party CDW. You may find that you aren’t covered for certain types of vehicles, or that you’re limited to the length of the rental period or the number of drivers.
Credit-card coverage is good for 30 to 45 consecutive days, depending on the card.
You may want to take two credit cards with you, because an amount equal to the CDW deductible may be blocked on the card you use to pay for the rental.
Short-term leasing may be a better value than renting: it includes no-deductible collision and theft insurance. France’s main automakers have a handy buy-back program for a lease as short as 21 days.
Know what type of fuel your rented car uses. Engine damage caused by the wrong type of gas isn’t covered by car-rental insurance.