What Car Insurance Do I Need While Traveling Abroad?
No one wants to think about the worst-case scenario while traveling abroad.
However, life happens.
You might be rear-ended while browsing the scenery of Italy or come back to your rental car only to find your possessions stolen while parked on the beaches of Spain.
Whether traveling abroad for work, school, or leisure, getting around on public transportation will only take you so far.
Eventually, you might face the dilemma of renting a car. International rentals are offered at the airport and even when you book your flight, but one issue you need to address before you show up to pick up your vehicle is insurance coverage.
You might have coverage in the U.S., and while that protects you if you are using a rental car stateside, the U.S. Department of State recommends reviewing your policy carefully. Rarely does a U.S.-based policy protect you overseas, and according to the U.S. Department of State, only Canada and Mexico recognize these policies.
Therefore, you may need to look at alternatives on your trip when travels take you further than the borders of the U.S. Luckily, you have a few to choose from depending on where you visit, what credit cards you bring along, and your existing insurer.
My Existing Insurance Isn’t Valid Out of the Country – Now What?
Before you assume you have no way to rent a car without insurance, review some of these options available for U.S. travelers who want extra peace of mind while renting a vehicle.
While you are looking at insurance, do not forget to make sure your driver’s license allows you to operate a rental car in the other country too. Visit the country’s embassy website to inquire about an international driving permit and whether it is required for your visit.
Book and Protect all Through Your Credit Card
While you travel, you most likely will bring along your trusty Discover or Visa. Call your credit card lender and ask about additional rental car coverage. Most credit card companies offer rental insurance on cars booked while using their card.
For example, Visa automatically provides renters with Auto Rental Collision Damage Waivers. These cover theft and collision losses up to the cash value of the rental vehicle. However, the car must be rented with your Visa card that has your name embossed on the card, and you listed as the driver. In the rental agreement, you may indicate authorized drivers. If you include them in the rental agreement, Visa will cover those drivers too.
While Visa offers this protection, they do not provide it in every country. Therefore, call Visa directly and let them know where you intend to travel and see what coverage they offer before assuming you have full protection.
Lastly, inquire about coverage protection length. If you are on an extended trip, Visa may not offer coverage beyond a specific travel period.
Visa is not the only service providing you with rental coverage. Other credit cards that may cover you according to CreditCards.com include Chase Sapphire Preferred and Chase Sapphire Reserve along with United MileagePlus. American Express may offer primary coverage if you enroll in the service program ahead of time.
Purchase International Car Insurance for Your Trip
You may need a third-party insurer offering international coverage. These companies may be located within the country you’re visiting, but have satellite offices in the U.S.
The coverage with these private third parties may be cheaper than the rental desk, but coverage amounts vary. Therefore, review your options carefully and ensure you pick a policy that covers accident, collision, and even theft.
Purchase a Stand-Alone Insurance Policy
Whether through your insurer or another, you can buy trip insurance.
Trip insurance works just like it sounds. As a stand-alone policy, it operates separately from your common automobile insurance policy by covering you only for the duration of your trip in the country you visit.
Trip insurance costs do vary by company and the length of your stay. The destination country may raise the cost of your insurance policy as well but running a quick comparison between providers is your best way to save on insurance while still getting the coverage you need.
It is best to check with your current insurer, because they may have discounts available for loyalty.
Buy Your Coverage Directly through the Rental Company
Another option, though the more expensive option available, is purchasing your insurance coverage through the rental car company itself. Rental companies sell their collision-damage coverage with the lease, but these are in the form of waivers.
Just realize that the cost is usually on a per-day basis and will add up quickly if you plan to stay longer than a couple of days. Furthermore, read the fine print on your policy.
Rental car companies have caveats and fine print that you might be tempted to go over quickly, but before you skim, realize the fine print might have exclusions. If you notice terms like “secondary” or “supplementary,” you may not receive the level of coverage you need.
Find out how much coverage you need, then review the policy to ensure it gives you that coverage before signing up for a daily fee.
Do Not Ignore the Country-Specific Insurance Requirements
Countries have specific requirements for insurance. Contact the U.S. Embassy in your destination country to find out specific insurance requirements. While the rental car agency might offer that particular coverage, if you opt for insurance from your insurer or a travel insurance company you must make sure you still meet the minimum requirements.
Is Minimum Coverage Enough?
Before you opt for the minimum to cover the vehicle, consider everything that is covered under the policy. Will you be covered for medical insurance payments in the event of an accident? Would personal belongings be covered if they were stolen or damaged in an accident? If so, for how much?
Prices for insurance might vary dramatically, but the last thing you want is to be under-covered.
Review all your options, look for gaps, and close those gaps before you step off the plane at your destination. Doing so will ensure that you have a great vacation or trip with the extra peace of mind you are covered by insurance.