Slow Down and Learn About Car Rental Insurance Abroad

You’ve decided to pack the family up and head overseas. Your plane tickets are purchased, resort-wear packed, and rental car is booked. Excitement fills the air as you anticipate your journey overseas.

But wait; do you have everything you need? Here’s an important suggestion before you run out the door: make sure you’ve checked into car rental insurance, especially if you are travelling abroad.

Car rental insurance abroad may not sound exciting or you may not think you need it, but

it is just as important to have adequate coverage among all the details of your excursion.

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Before you decide to rent a car abroad, read the US State Department’s website about driving. The information is updated bi-annually and includes the most pertinent information passed on from embassies overseas. The information includes safety information, safe driving tips, and dangerous places to avoid. It’s valuable information to consider before you decide how much rental insurance coverage you may need.

An International Driving Permit is helpful to have, especially if you are involved in a traffic incident. These permits are recognized by 150 countries and are translated into 10 different languages. They may be obtained for eligible drivers at the National Automobile Club or AAA. These are the only two reputable places to get your permit. The IDP along with your photo ID and passport provide sufficient documentation of eligibility. The driving age overseas is between 23-75 years old in most countries.

Why do you need a Car Rental Insurance Abroad?

By now you may be asking, “Hey, I’m a safe driver. Why do I need car rental insurance abroad?”

Good question. In Europe, for instance, some of the countries drive on the left hand side of the road rather than the right side. This may not sound like a big deal, but if you haven’t done it before, it can get confusing and tricky, increasing your chances of an accident.

The driving is different and the parking may be harrowing. It’s highly probable you could end up with small dings and dents. Also, many of Europe’s roadways are poorly paved, narrow, winding, and challenging to navigate. Some roads are close to ocean cliffs and guardrails are absent along the roadway. Additionally, many European cars are manual shift. If you’ve never driven one before, this adds another layer of distractibility when driving abroad.  Did you know that most European cars use diesel fuel? If you accidentally put regular gasoline into a diesel engine, you are 100% liable for the engine damage. For these reasons, car rental insurance is a must.

But those reasons are certainly not the only scenarios to consider. European countries have different car rental insurance laws. It’s a good idea to check with the embassy in the country/countries you’re planning to visit. Many nations require by law that you have at least a basic minimum amount of insurance.

How do I obtain car rental insurance?

The next question is, “How do I obtain car rental insurance?” First, check with your personal automobile insurance carrier. Typically, residents of the United States, Canada and Mexico may have insurance policies that cover driving abroad but don’t cover all damages.  Inquire about a Personal Umbrella Policy, which may cover damages beyond your regular automobile insurance.  However, even with this extra insurance, you may not have all the coverage you need. It’s a good idea to obtain other quotes from independent insurance agencies that specialize in auto rental insurance; even better to look for it when booking your car online. They may be cheaper than your company or the car rental company.

Another way you may be covered is through your credit card company. Most of the major players such as Visa, MasterCard, American Express and Discover offer insurance. Make sure you ask your credit card company the following questions:

Do you cover car rental companies for collision, loss and theft? How much do you charge for an overseas rental? What types of vehicles are covered? How much coverage do you provide? Are there any hidden fees for this service?

It’s important to note that some rental car agencies place a “hold” on your credit card in the amount equal to the value of the car in case of damage. Make sure this doesn’t happen to you, or it may prevent you from making purchases on the card.

What type of car rental insurance do I need?

By now you may be asking, “What type of car rental insurance do I need?” The answer is different for everyone depending on your driving habits, how many people you are traveling with and the destination country’s laws. Most nations insist you must at least have Liability Insurance. Liability insurance covers the driver, passengers and any other persons hurt if the accident is deemed your fault. However, it does not cover the cost of the rental car itself. This is obviously a big problem and can be quite costly if you are involved in an accident.

The next logical question is, “What type of insurance can I obtain through the car rental agency?” Agencies provide a few options: Car Damage Waivers (CDW) for collision and CDW for loss or theft. The average cost for these is an extra $10-30 per day. Collision covers medical costs but not damage to the vehicle. Loss or theft insurance covers vehicle damages in the event of an accident or the car is stolen. It does not cover the contents inside (your personal valuables).

Car rental insurance tends to be pricey because it’s intent is to cover the entire value of the vehicle. Make sure before you leave the rental counter, you know the type of coverage you have and understand the limits of each policy, no matter which coverage you opt for. Good communication prevents problems and misunderstandings. If you decline rental insurance, understand you may be responsible for your deductible and a loss of use fee. A loss of use fee means if the car is damaged and must be sent out for repairs, you will be charged an additional fee by the rental agency.

What isn’t covered by car rental insurance abroad?

Finally, you may want to know, “What isn’t covered?” In general, high-end luxury cars built for speed, some large vans and off road excursion vehicles may not be covered. If you are involved in a collision, and you were exceeding the speed limit or driving under the influence, you may not be covered.

Always check details before you decide whether or not to purchase insurance. It’s an important part to any successful vacation plan.