Rental Car Insurance in Europe vs the US: What’s Different?
When it comes to car insurance in the US and in Europe, there are several similarities, but there are also lots of differences. If you’re planning on taking a trip to either Europe or the US this year, make sure to familiarise yourself with these differences first.
What is Rental Car Insurance and Why Do You Need It?
Simply put, rental car insurance is in place to protect you. It protects you from financial responsibility for theft or damage to the rental vehicle, or for injuries or damage to others if you are involved in an accident.
What Does Standard Rental Insurance Usually Cover?
Generally, it covers things such as theft, damage to the vehicle and other third-party liabilities. However, it may not cover broken windows, damage to the interior of the car, or damage to the undercarriage of the car – it is best to check with your individual provider first.
Why Do Policies Vary So Much by Region?
There are several factors as to why this is the case. Urban areas with high crime rates, population densities and areas with high traffic congestion generally contribute to the overall price of a rental policy going up in a certain region. For example, in the US, some cities which have the highest car rental costs include New York City, Seattle and Chicago, and given the factors listed above, it is easy to see why these are three of the most expensive cities to rent a car in the US.
What Extras Might You Be Offered at the Desk?
You may be offered extra insurance options such as cover for damages to the windscreen, interior of the car (including staining the seats or ripping them), or damage to the undercarriage of the car. However, sometimes company representatives working at the insurance desks may be working for commission, so they may try and upsell you insurance add-ons and other extras that you do not necessarily need. Make sure to take a firm stance if this is the case, and do not be pressured into purchasing any extras if you do not want or do not need them.
How Does Rental Car Insurance Work in the US?
Most personal car insurance policies will also cover the insurance for one rental car, but make sure to check with each provider beforehand – never automatically assume that this will be the case. Some credit card companies may also offer rental car insurance as a perk.
What’s Included with Most US Rentals?
Liability insurance is almost always included, which covers injuries to others or damage to other vehicles up to the state’s required minimum. Personal accident insurance is also commonly included.
How Can Your Credit Card or Personal Policy Help?
Your credit card or personal insurance policy can help in situations where your car may have been stolen or damaged. However, you should always check with your providers first to make sure that this is the case.
Where Do State Laws Affect Your Coverage?
Each state requires a driver to carry a minimum level of liability insurance, and rental providers must match this amount. This means that when you rent a vehicle, your personal auto policy will most likely cover the liability portion of the rental.
How Does Rental Car Insurance Work in Europe?
Like in the US, some sort of liability is protected and covered on vehicle rentals in Europe. In this case, it is known as basic third-party liability. This basic third-party liability covers damage to other people or property. However, this is often limited and/or includes high excess fees, which are known as deductibles. As a result, most people opt to take what is known as a CDW (Collision Damage Waiver) to reduce or eliminate the excess.
What’s Legally Required Across Europe?
Basic third-party liability is legally required across Europe, although this is almost always included in the rental price. Make sure to check with your provider first, though.
How Do Insurance Terms Differ by Country?
Basic third-party liability insurance is mandatory in almost all European countries. Some countries may offer specific requirements, but UK vehicle insurance (for example) provides the minimum level of cover for driving in the EU.
What Is Excess Insurance and When Might You Need It?
This is an additional purchase you can add to your rental vehicle insurance policy. Sometimes it can cover damages to your vehicle that are not covered by the insurance policy, such as damage to the windows. You can also buy this to ensure that part or all of your legal excess amount is covered, should you be involved in an accident.
What Are the Main Differences Between Europe and the US?
There are several striking differences between rental vehicle insurance in Europe and the US. Perhaps the biggest difference is that there is a lot more focus and emphasis on personal responsibility on rental car insurance in Europe in comparison to the US. This means that add-ons such as window cover, undercarriage cover and damage to the interior of the car are more likely to be purchased – and more likely to need to be purchased – in Europe rather than the US.
Another thing worth mentioning is that language barriers – particularly when you are picking up your rental vehicle – could be an issue, more likely in Europe than the US for English speakers, due to the number of languages spoken on the continent.
What’s Typically Included in Each Region?
In the US, liability insurance and personal accident insurance are typically included in rental car insurance policies. On the other hand, in Europe, basic third-party liability insurance is generally included in all rental vehicle policies.
How Do Claims and Repairs Work Abroad?
Generally, in both the US and Europe, the rental company will deal with the insurance company directly, meaning that you do not have to, especially if you have been involved in an accident yourself. This generally includes recovery, replacement of the vehicle and repairs.
When Should You Be Wary of Extra Fees?
While damage to windscreens and the interior of cars is generally not included in an insurance policy, sometimes, when you rent a vehicle, it is included. You should always check the small print to make sure that this is the case before purchasing any additional add-ons. Furthermore, if you are unsure of anything you are paying for, you can ask the rental company for a full breakdown of the costs.
What Should You Look for When Booking?
You should look for reliable customer experiences, either through online reviews or customer testimonials. You should also look out for any hidden fees or extra charges that you may be unsure about. Make sure that the company is a legitimate one, and also that your insurance policy covers everything that you need to be covered for.
Should You Rely on Your Credit Card for Coverage?
While this can be tempting, you should not rely on your credit card for coverage. Not all card providers adhere to this policy. If you have any doubts, contact your credit card company and ask them first before making an assumption.
In addition, even though some credit cards provide extra insurance coverage, there are usually certain vehicles which are exempt from this, such as vans, pick-up trucks, or luxury vehicles like sports cars. If you are renting one of these types of vehicles, make sure to check if it is covered by your credit card rather than assuming it is, finding out it is not in fact covered, and then getting stung by a hefty bill.
How Can You Avoid Common Pitfalls?
It’s been said time and time again, but you should always check the small print. Read it over, and then read it again and again just to make sure that you fully understand it. Ask questions to the insurance provider or the car rental company to also make sure you understand exactly what you are covered for, so that no nasty financial surprises are awaiting you.
Final Thoughts: When Is It Worth Paying Extra for Peace of Mind?
This is dependent completely on you as a person. You should not feel obliged to pay extra simply for peace of mind, but if you genuinely feel better about paying for add-ons because you may need them, then do so.
For some drivers, extra insurance can provide peace of mind for long journeys, particularly if you might be travelling over unfamiliar terrain such as mountain passes or driving on snowy or icy roads.
What’s the Smartest Option for Most Travellers?
For the majority of travellers, car rental insurance policies will cover almost anything that is needed. However, it can be worth checking for add-ons like windscreen cover or internal car cover if this is something that you feel you might benefit from.