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When renting a car outside of America, navigating the complexities of auto insurance can be as challenging as driving on a new side of the road. Many travelers find themselves at rental counters, deciphering insurance policies that seem designed to confuse. Here’s a guide to help you understand the cautions of renting a car abroad in relation to auto insurance.
Understand Local Insurance Requirements for Car Rental Abroad
Each country has its own rules and regulations regarding auto insurance. In some places, the rental car will come with a basic insurance package that covers third-party liability — that is, any damage or injury you might cause to other people or their property. However, this basic coverage often comes with a high deductible, and it might not include theft or damage to the rental car itself.
Check Your Existing Insurance Policies for Car Rental Abroad
Before you travel, it’s essential to check whether your current auto insurance policy covers international rentals. Many U.S. policies do not extend coverage outside of the country, but some do. Similarly, check if your credit card offers rental car insurance as a benefit and understand the terms. Credit card coverage often acts as secondary insurance, kicking in only after other policies have been exhausted.
Be Wary of Additional Insurance Sold at the Counter
Rental companies abroad often try to upsell additional insurance coverage, such as Collision Damage Waiver (CDW) and Theft Protection (TP). While these can offer peace of mind, they can also significantly increase the rental cost. It’s vital to understand what is already covered by your existing policies to avoid paying for redundant coverage.
Car Rental Abroad and the Excess Reduction Products
In many countries, rental car insurance comes with an “excess” or “deductible” — the amount you’re responsible for paying in the event of damage or theft. This excess can be quite high, often upwards of $1,000. Rental companies may offer additional products to reduce or eliminate this excess, but these can be costly. Weigh the risk of a high excess against the price of these products.
Inspect Your Rental Car Thoroughly
Before driving away, inspect the rental car thoroughly and document any existing damage. Take photos or videos as evidence. This careful inspection can prevent disputes over damages that were not caused by you when returning the car.
Familiarize Yourself with Local Driving Laws and Conditions
Understanding local driving laws and conditions is indirectly related to insurance since failure to comply can affect insurance claims. For instance, if you’re involved in an accident and it’s determined you were violating local traffic laws, your insurance claim might be denied.
Keep All Documentation
In the event of an accident or theft, having thorough documentation can make the insurance claim process smoother. Keep copies of your rental agreement, insurance policy, and any correspondence with the rental company.
Car Rental Abroad requires a good understanding of local auto insurance requirements and how they interact with your existing coverage. By doing your homework before you arrive at the rental counter, you can ensure you’re adequately covered without paying for unnecessary extras. Always remember that being informed is your best defense against the complexities of renting a car abroad.
For our specific carriers, here are the underwriting guidelines: (feel free to make the formatting easier to read and make the content easier to read if you’d like:
AAA:
Coverage applies to the continental United States, District of Columbia and Canada. Coverage applies “within the states or while the insured auto is being transported between their ports”. Property Protection Insurance only applies in Michigan.
Coverage applies to a rental car, however, purchase of the Loss Damage Waiver is recommended to cover dimished value and loss of use.
Bristol West:
The policy territory is: 1. The United States of America, its territories or possessions; 2. Puerto Rico; or 3. Canada. This policy also applies to loss to, or accidents involving, your covered auto while being transported between their ports.
Coverage for a rental car only applies if the car is rented in the United States or Canada. Coverage for rental car only applies when the vehicle is rented from a business in the business of renting cars. We will not pay for insurance, collision damage waivers,
fuel, or any other charges, except for the actual cost
of the rental of the vehicle including applicable taxes.
Citizens/Hanover:
Canada Yes all national land is covered –
No to Mexico or Foreign Countries on their physical Vehicle
There a Endorsements called Prestige Rental Upgrade and Prestige Global Rental
with these, you would have loss of use and diminished cause on a rental Vehicle
Fremont:
This policy applies only to accidents and losses which happen during the policy period as shown in the Declarations. They must take place within the United States of America, its territories or possessions, Canada or between their ports. No coverage in Mexico
There is an Endorsement called Rental Automobile Gap coverage
with this doesn’t cover loss of use or diminished value
Michigan Insurance Company:
Canada Yes- Need Canadian ID cards. No to Mexico or Foreign Countries. Vehicle coverage carriers over, No Loss of Use. Purchase rental coverage from the rental company -Below from Heather 1. The coverage Territory is within the US, Canada and US Owned Territories only. Mexico is not covered as well as any other countries not a US owned Territory.
2. They can purchase LDW from a rental company when renting a vehicle, we do have a Travel Package Available that van be added to a vehicle with comp/collision.
Trip interruption Coverage of $600 for transportation expenses incurred in the event of a mechanical or electrical breakdown of an auto. Expenses incurred for lodging and meals in the event of a covered physical damage loss or mechanical or electrical breakdown of a specified auto.
Rental Car Loss of Use-Pays up to $1000 per occurrence for rental fees insured is required when a rental car is damaged while being used by the insured
Rental Car Diminished Value-when held responsible for the damage to a rented vehicle and not a total loss and the rental company opts to sell the rental in damaged condition or repair but has a perceived reduction in its value.
3. If out of the country that is not within a covered territory they will want to purchase coverage.
Nationwide:
Canada-Yes need a Canadian Insurance, which can be provided by a service agent. Mexico up to 25 miles from US border, but not underinsured or unisured. Must purchase Mexico Insurance. No other countries except Puerto Rico. Below is detailed info emailed from NW. For the Canadian proof of insurance, the insured can contact Personal Lines Service Solutions: 1-877-669-6877. Service can then email, fax or mail the POI to the insured.
Standard motor vehicle insurance cards are not accepted as proof of insurance by Canadian authorities.
-The proof of insurance does not provide additional coverage above the Nationwide policy.
-According to the Canadian Insurance Regulatory Commission (CIRC), Canadian POI is not required to get into Canada. It is only required in certain provinces and only if the insured is stopped or in an accident.
-We do not provide Canadian POI cards on trailers.
It the insured is going to rent a vehicle to go to Canada, they should request a Canadian POI for one of the vehicles currently on the policy. The member will need to keep the rental agreement, their POI and Canadian POI together.
Progressive:
Canada and US Territories – coverage carries over. Mexico- Need to purchase coverage with 3rd party carrier, Mexpro. International is not covered. Suggests always getting insurance offered by the rental company, you are basically uninsured without it. LDW, Collision and Property damage should all be purchased. Suggested going to US Embassy or information area near rental company for clear ideas of what is covered under these policies.
Safeco:
US and its territories and Canada- Broadest coverage carries over. Mexico and international not covered. Suggests getting LDW (loss damage waiver) and what ever is offered by rental company. **Person renting car should be aware of a weight limit on non-owned vehicles: Gross Vehicle
Weight Rating of 12,000 pounds or less or any cargo van or moving van with a Gross Vehicle
Weight Rating of 18,000 pounds or less. Anything larger risks a claim being denied.
Wolverine:
Canada, Mexico, any other foreign country – No coverage, Good idea to purchase LDW if the client wants to walk away from any financial responsibility. Everything major is covered with exception to loss of use and potentially diminished value not being covered. When renting a vehicle in a different country, go with whatever coverages the rental car company offers because you will not be covered under Wolverine.
