Tips When Buying Rental Car Insurance Abroad

It is important to understand the rules of renting a car in another country before you leave home. Follow these tips when buying rental car insurance abroad so you aren't caught with a huge bill at the rental counter. Requirements and costs will vary from country to country, and you need to understand all the tips when buying rental car auto insurance coverage abroad.

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Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently a professional writer.

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Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business. Brad is licensed in all P&C lines.

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Reviewed by Brad Larsen
Licensed Auto Insurance Agent

UPDATED: Jun 4, 2021

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Renting a vehicle abroad is a bit more tricky that renting one within the United States. Different rules and regulations require a few more precautions than you would need to follow if booking within the states. Follow these tips so that your vacation or business trip is not derailed by a rental car issue.

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It is important to understand the ins and outs of renting a car in another country before you leave home. You could be out of luck or required to pay a great deal more once you are at the counter. Requirements and costs will vary from country to country, and you need to understand all the particulars before you cross the border.

Check Licensing Requirements of the Country

First, you need to check the licensing requirements of the country you will be traveling through. You may need to get an international driver’s license, according to the Insurance Information Institute.

Other countries may require that you get an International Driving Permit, or IDP.

The travel site Independent contends that an International Driving Permit is basically a copy of your U.S. license, but in 10 foreign languages. They assert that it is an acceptable form of driver identification in over 150 countries when accompanied by your U.S. driver’s license.

According to the site, there are two sources for an International Driving Permit: the American Automobile Association and the National Automobile Club. They also caution that there are many fakes and frauds out there, so make sure to only get an IDP from a reputable source.

It would be a shame if you found out at the ticket counter during your vacation or your business trip that you need an International Driving Permit, and you don’t have one. Such an occurrence could well ruin your trip!

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Check with Your Regular Insurance Company

Oftentimes, your regular car insurance will cover you when you rent a vehicle in the United States, but it is a completely different ballgame in another country.

Contact your insurer to see where they will and will not cover you.

You might be covered in Canada, for instance, but not in Mexico. Your insurance company may be able to offer you an insurance rider to cover you when renting abroad.

More than likely, it will depend upon what countries you will be driving through. Also make sure that you tell your insurer when you call to inquire about coverage if you are going abroad for a business trip. Most won’t cover business use of a vehicle, according to the National Association of Insurance Commissioners.

You might want to consider forgoing the use of your regular car insurance, however. It may be worth it to you not to have to worry about a deductible or an accident abroad affecting your car insurance rates. Furthermore, if you don’t have collision and comprehensive coverage with your regular auto insurance, you will need to purchase insurance to cover your rental car.

Check with Your Credit Card Carrier

You may find coverage with a bit of plastic in your wallet or purse. Credit cards are known to offer protection when it comes to renting a car, but it is not a cut and dry process.

The coverage offered by your credit card may be supplemental to a primary insurance, according to the travel site TravelSense, or it may not cover you overseas.

Again, you need to pick up the phone to find out the specifics from your credit card company about the coverage they will extend to you while driving abroad. You need to have all the information before you rely on your credit cards for rental car insurance while driving out of the country.

Remember, you can only receive rental car insurance coverage from your credit card if it is the credit card that pays for the rental car. Such a statement should be understood without saying, but it is worth repeating due to misunderstandings of the coverage.

Understand Driving Differences

You also need to understand any driving differences between the U.S. and the country in which you are travelling.

The driving rules and laws in other countries can be much different from just driving on the opposite side of the road.

Such variations can be the difference between having to use your insurance or leaving the country unscathed with only pictures and mementos.

For instance, many European cars have manual transmissions, or stick shifts. In the U.S., most drivers have only learned how to operate an automatic transmission, and they have no idea how to drive a manual car.

It can be quite a problem if you get to the ticket counter, or even to your rental car, only to find out that you can’t drive it! Driving a manual transmission is simple once you get the hang of it, but a foreign vacation is no place to start learning!

If you don’t know how to drive a stick shift, then you need to find a car rental agency that offers automatic transmission vehicles or find another mode of transportation.

There also may be different laws about which driver has the right-of-way, the speed limit and if you need to stop for pedestrians or even farm animals. In addition, many rental car insurance agencies will not cover damages that were the result of intoxication, reckless or heedless driving.

Furthermore, many rental car companies have age restriction. Generally, only those between the ages of 25 and 70 can rent a vehicle in foreign countries.

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Coverage Options

You should make sure that you purchase your car insurance for traveling abroad before you leave for your travels. That way, you can review all of your coverage options without trying to rush through it at the counter. Also, understand that different countries will have different rates, based on the rate of accidents and thefts within each country or region.

There are four different insurance options available to you to cover your rental car insurance. You don’t have to buy all of them, especially if your regular insurance or coverage through your credit cards or other insurance will cover some areas.

The first coverage option is a loss damage waiver. Abroad, this is also referred to as a collision damage waiver. It waives the renter’s liability, or financial responsibility, for the cost of damages to a vehicle or the loss of a car due to theft. The car rental agency certainly has insurance coverage of its own, but you need to pay to have their insurance cover the rental car. You want to make sure that the collision damage waiver also covers loss-of-use costs and other costs such as towing.

The next kind of coverage is liability. This covers paying for injuries and damages that you may inflict upon others. This rate will certainly vary depending upon the country you are driving through. Some rental car insurance agencies may base their rates on your driving record as well.

The first two types of coverage pay for damages to the rental car and to others, while the last two pay for damages you incur. The next type of coverage is personal accident insurance. It covers payments for your injuries and other expenses from an accident.

This can be a very important type of coverage to have while driving abroad, as your personal health insurance may not cover you outside of the U.S. That is another inquiry to make before you travel! Ambulance and hospital bills can add up at an alarming rate, so you need to know if you have health insurance while abroad, because it might be another type of coverage you need while traveling.

The last type of coverage is personal effects coverage. It pays for your loss if items are stolen from your rental car. Personal effects coverage is a good idea if you are travelling with expensive items like computer equipment, photography equipment or sporting equipment like golf clubs.

Homeowner policies or renter’s insurance policies may cover you under such a situation. Generally, the personal effects coverage of a homeowner or renter’s insurance policy covers you all over the world. It is a good idea to double-check this with your home or renter’s policy to inquire about the coverage, the value limits and if there is a deductible.

Use the Internet

The last tip is all about finding rental car insurance for your trip abroad, and it is as important as all of the others.

While you are planning your trip and finding insurance options, make sure you use the Internet to maximize your search.

First, you should use the Internet to find and compare quotes for insurance for a rental vehicle. Whether you utilize a comparison website, check the rates for rental car insurance, or buy the insurance from the rental agency in the end, comparing rates is the best way to find the range of prices for any insurance.

Next, you should search the Internet for discounts and promotional codes that are available for rental insurance companies, to see if you can get an even lower rate. Many rental insurance companies will run promotions that you may only find out about if you search for them.

Last, you should book your rental car and insurance over the Internet, just to be assured that you have all of your bases covered. Who wants to stand in line at a rental car agency while on a trip anyway?

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