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buying Declining Rental Car Insurance Abroad? Know the Risks

02:06  25 may  2018
02:06  25 may  2018 Source:

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If you decline rental insurance , understand you may be responsible for your deductible and a loss of use fee. 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

Some rental companies will decline to rent you a car if your credit limit is lower than the value of the car . The dates of travel (including travel while abroad ). So if you travel to Europe and tour several countries, the insurer would need to know when you would be moving between each country.

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You’re on an overseas trip and about to rent a car. You decline the additional insurance offer and mentally high-five yourself for saying no because your credit card offers primary rental coverage.

Not so fast, smarty-pants.

Although the Nerds are generally fond of credit cards that offer some form of auto rental insurance, be aware that even if you have primary coverage via your card, you might still want more, especially when traveling internationally. Here’s why.

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Read on Know the limitations of your own car insurance . When renting a car abroad , you may be asked to prove that you are insured on the rental car , or else you'll be required to pay a large daily insurance premium.

Understand your coverage

Several credit cards offer primary rental coverage as part of their cardholder benefits, which means the card would pay out first in the event of an accident and you could avoid involving your own auto insurer.

But that may not be what the rental car agent is offering with your rental agreement. You might be asked to opt for a collision damage waiver, or CDW (also known as a loss damage waiver). If you elect this option, and your rental car is damaged or stolen, the car rental company will likely waive any costs to you.

So why would you pay extra for a CDW when your credit card already provides primary rental car insurance?

Well, even though the latter provides protection in the case of an accident, you’ll likely still have to deal with a deductible, paperwork and lost time as you wait to be reimbursed by insurance. In most cases, a CDW lets you walk away free of all of those hassles and expenses, which can become even more cumbersome when you’re dealing with them internationally.

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When you rent a car , it can be hard to know if you need rental insurance coverage. If you have health insurance , consider declining personal accident insurance if your health plan covers accident-related injuries. International car insurance Before you rent a car abroad , get a free insurance

When you rent a car , you can usually get free insurance coverage through your credit card issuer, which means you rarely need the extra insurance offered by the rental company. This can be tricky to do abroad , though, since insurance regulations are different in other countries.

CDW waivers can cost between $10 and $30 per day. So if you’re renting a car for two weeks, it can pile a significant sum onto your rental fees. But consider whether what you’d save by skipping the CDW would be outweighed by the out-of-pocket costs, increased insurance premiums and headaches while dealing with an international claims process.

Be aware of exceptions by card, country

declining-rental-car-insurance-abroad-risks: Even if you have primary rental insurance coverage via your credit card, you might want more when traveling outside the U.S.© Getty Images Even if you have primary rental insurance coverage via your credit card, you might want more when traveling outside the U.S.

Every credit card has its own policies and restrictions, and insurance criteria may differ depending on where you’re traveling. A sampling of some potential trip-ups:

  • Discover discontinued car rental insurance as a benefit on any of its cards as of Feb. 28, 2018.
  • American Express cards can provide primary rental coverage, but you have to enroll and there’s a flat rate of $19.95 or $24.95 per rental period depending on the coverage you select (less in California and Florida). Know that the coverage doesn’t include any vehicles rented in Australia, Ireland, Israel, Italy, Jamaica and New Zealand.
  • Italy requires all foreign renters to include a collision damage waiver in their rental agreement.
  • Ireland allows foreign renters to decline the collision damage waiver, but the rental company may place a hold on your credit card for the amount of the deductible, which could cost thousands and hamper your purchasing power while you’re traveling.
  • The Chase Sapphire Preferred® Card and the Chase Sapphire Reserve® both offer primary rental insurance and don’t exclude any countries, but they do exclude most luxury cars, including certain models of BMW, Mercedes-Benz, Cadillac and Lincoln.

Ask the right questions

If you have more than one card that offers primary rental insurance, it’s likely that each one has different coverage. Before your trip, call the number on the back of your card and ask the representative for the most up-to-date information so you use the best card for your circumstances. You should know that in most cases the coverage may exclude:

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Many clients often ask if they can decline insurance while renting a car in order to avoid the extra cost. Credit cards don’t usually cover every country abroad , certain types of cars or certain type of roads.

It gets even more complicated when you want to rent a car abroad . Here’s what you need to know . Credit Cards and Car Rental Insurance : What's Covered and What's Not. You won’t be able to rent a car without it, and even if you could, you’d be at risk of losing a ton of money if something goes wrong.

  • Certain countries or territories, specific to each issuer and card
  • Luxury and antique vehicles
  • Trucks and other cars with open beds
  • Motorcycles, mopeds and RVs
  • Rentals lasting past a certain number of days. Some cards won’t cover rentals longer than 15 days; others won’t cover rental agreements that are longer than 31 days.

Weigh the pros and cons

If you did your due diligence and feel that your credit card’s coverage is sufficient for your trip, you then have to consider whether the cost of purchasing the rental agency’s CDW is worth it to you. It may add significant cost to the rental.

The flip side is that without it, if anything happens to the car, you’ll likely owe a deductible, have to pay for any repair charges upfront and wait to get reimbursed from the insurance company.

There are also other rental insurance options besides your credit card coverage or the rental agency’s CDW. If you’d rather price-shop to get the best rates, or buy a different policy altogether, use a site like, or consider adding collision coverage as part of a larger trip cancellation insurance plan.

States Where Poor Credit Has the Biggest Impact on Car Insurance Rates

  States Where Poor Credit Has the Biggest Impact on Car Insurance Rates A study finds low credit scores can cost you thousands a year in car insurance, especially in Michigan.A nationwide report by NerdWallet finds that auto insurers widely use consumers' credit histories to determine rates, and those with low credit scores pay an average of $1,270 extra per year in car insurance. Insurers see those with low credit scores as more likely to file claims, the report states.

If you’ve ever rented a car , you know how much insurance drives up the price—it can sometimes cost as much as the rental itself. Maybe, if you have no other choice, but you have other options when it comes to insuring a rented vehicle.

rental car coverage is always necessary. know your current coverages If you have got insurance , think about declining personal accident insurance if your health arrange covers You're solely insured underneath an ad insurance policy. You don't wish to risk paying a high deductible. And if you are driving abroad (apart from Canada), your current insurance in all probability will not cowl you.

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Robin Saks Frankel is a writer at NerdWallet. Email: Twitter: @robinsaks.

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