How to Handle Insurance When Renting a Car Overseas

Renting a car abroad? Insurance can be one of the most confusing — and expensive — parts of the process. Here's how to make smart choices without getting caught under- or over-covered.

Understand the Types of Car Rental Insurance Abroad

You’ll typically encounter four main types of insurance:

1. Collision Damage Waiver (CDW) – Covers damage to the rental vehicle
2. Theft Protection (TP) – Covers if the vehicle is stolen
3. Third-Party Liability – Covers damage or injury to others
4. Personal Accident Insurance (PAI) – Covers you and your passengers’ medical costs

Note: CDW and TP are not always insurance — they’re waivers that limit your liability. Some countries mandate basic coverage; others don’t.

Know What Coverage You Already Have

Before you pay extra, check:

- Your personal auto insurance: May extend to foreign rentals (often not outside North America)
- Travel insurance: Some policies include rental coverage
- Credit cards: Many premium cards cover CDW/TP if you decline the rental company’s insurance

Contact your providers and request confirmation in writing.

Decide What to Buy From the Rental Company

Rental desks are known for upselling. Don’t get pressured — but also don’t skip necessary coverage.

Buy:

- Liability insurance if not included — it’s often required by law
- CDW/TP if your credit card or policy doesn’t cover it

Skip:

- Duplicate PAI if your travel insurance already covers injuries
- Roadside assistance if your card or membership (e.g., AAA) offers it

Read all terms before signing. Some CDWs come with high deductibles or coverage limits.

Use Credit Card Benefits Wisely

To activate your card’s coverage:

- Pay in full with the qualifying credit card
- Decline the rental company’s CDW/LDW
- Be listed as the primary driver
- Limit rentals to 30 days (or whatever your issuer allows)

Coverage varies by card — Visa, Mastercard, Amex, and Discover all offer different terms. Read your benefits guide or call customer service.

Watch for Hidden Clauses and Exclusions

Even if you have insurance:

- Off-road driving may void coverage
- Some vehicles (luxury, 4x4s) may be excluded
- Country restrictions may apply (e.g., no coverage in Ireland or Israel)
- Alcohol use can void claims

Document any existing damage before driving off, and get written confirmation of your coverage.

Final Thoughts: Cover Yourself Without Overpaying

You don’t need to accept every insurance offered — but you do need to protect yourself. Understanding your options helps avoid paying twice or risking thousands.

Do your homework, confirm your existing coverage, and read the fine print. Peace of mind abroad starts with smart insurance choices.