Reader question:

What should I know about getting car insurance on rental cars while traveling abroad?

Ilma

As much as you can!

Most insurance companies will cover you for driving about anywhere in the United States as well as Canada. In fact, Canada actually tends to have the same kinds of insurance requirement laws that the U.S. does, so you generally won’t have any problems with conflicting legal requirements while you’re there. Still, it isn’t the same everywhere you go.

Mexico, for example. Most insurance companies in the states will provided limited coverage in Mexico, but this usually only extends to the border areas, so any more in depth traveling might require something extra. Auto liability laws in Mexico do require you to have coverage, though, so you might want to consider getting coverage from a Mexican car rental company.

I would say probably zero auto insurance companies extend their coverage to Europe, but I don’t want to lie just in case. Still, at least most don’t, and it’s very unlikely that any do. So, if you’re renting a car in Europe, it’s better to get your insurance through the rental company there. Remember that many foreign companies don’t recognize the same insurance rules, so ask before you drive so you don’t get stuck somewhere without coverage.

Cheers,

Fashun Guadarrama.

Reader question:

I’m going to be doing some traveling over the summer and I’ll be renting a car. Do I need  rental car insurance?

LaKeisha

Unfortunately, you do, LaKeisha.

Considering how much rental companies charge you to use their cars (some charge more than my car’s monthly payments!), you’d think it would be their responsibility to deal with the insurance, but in reality rental car insurance is just another hassle you have to deal with when you’re traveling. Usually the rental company will help you through this, but of course they want you to pay the largest amount possible, so you shouldn’t just trust them.

Something many people don’t realize is that they may be able to get coverage on their current insurance policy for their own car. Call your agent and check your policy to see. If the car your renting is of equal to lesser value than the car you already have, you might be able to get it covered under your policy with no worries. If it’s more expensive, or a lot newer, you might run into trouble extending your policy to cover it. Because of this, be reasonable about what kind of car to rent. If you can get it covered under your own policy, that’s best, and a lot cheaper than getting your coverage through the rental company.

Also, a lot of credit card companies offer insurance on rentals if the rental is paid for with the credit card. If you combine that with what you get from your own insurance company, you can have as much insurance as you desire. Keep in mind, though, that doing this will lower your card limit, and it might not be a great idea if you plan on paying for all your vacation needs with your card.

Rental car agencies will try to get you to buy injury insurance. If you already have health insurance, though, you’ll want to decline. Another way to make sure you have to pay the least out of pocket expenses in the event of an accident is getting from the rental car place what’s called a Collision Damage Waiver, or CDW. For a few extra bucks a day, this will make it to where you aren’t financially responsible for damage done to the car, and you won’t have to pay if it’s out of use and in the shop. This isn’t insurance, though, which is still required by state.

Read the fine print, and have a great vacation!

Fashun Guadarrama