In the US there are basically two types of auto insurance: 1) liability, which covers bodily injury and property damage to other people for accidents you cause, and 2) collision, which covers damage to your own car. Does the same thing apply in countries outside the US?
The reason I ask is that my own insurance covers liability when I rent a car in the US, but not outside, and my credit card covers damage to a rental car in most countries but not liability. On a recent rental in Iceland I was concerned about the liability aspect and was told I would be covered if I took out their Super Collision Damage Waiver for extra cost. What we in the US call liability was not mentioned in the contract, so I am wondering if I really needed to spend that extra $350 for the extra insurance.
Iceland is one of the special cases for car insurance - a lot of credit cards (possibly yours) do provide car insurance except in certain countries and Iceland is often one of those countries. I don’t know if you checked your credit card before going there, but it wouldn’t be surprising to find Iceland isn’t covered.
Also, the thing that is going to damage the car in Iceland isn’t a collision; it’s the wind. The wind is going to rip parts of the car off. It is going to blow things (sand, small rocks, so many rocks) into the car and damage the windshield or body. (There might also be collisions, but it’s more likely to be environmental damage.) Coverage in Iceland really does need the rental car place’s special coverage.
Other countries are hit or miss. Credit card insurance will usually cover (again, check the fine print) but make sure that you use that credit card to reserve and pay for the car. For me, if I’m planning on driving overseas, I usually buy travel insurance that includes coverage for rental cars and use that.
Insurance on hire cars in Europe can be a ripoff. It’s quite easy to buy a policy that provides sufficient cover from a third-party insurer that is much cheaper than the hire company’s offering.
When you collect the car, they will try to sell you extra cover and tell you that your policy is not adequate. The problem is that some of them charge low rates for the car and depend on the inflated insurance charge for their profit (That and the fuel fiddle).
The problem that can arise especially affects people who return the car after hours. You can find that they have made a charge of several hundred Euros for “damaged tyres” or “collision damage”. Disputing this can be difficult since you are now thousands of miles away and claiming on your insurance can take a long time as the hire company won’t play ball. Many people just give up.
I just got back from Iceland and used my CC insurance without issue. The rental place did mention the wind damage but nothing was said about any additional coverage needed.
OP here. My main point is whether I need to worry about liability coverage in a rental outside the US. My credit card will take care of damage to the car I’m renting, so that’s not a problem. But what if I cause an accident and hurt someone or damage someone else’s car? In the US my personal auto policy provides coverage for that but not outside the US.
Are people taking a big risk when renting cars outside the US?
I’ve never rented a car in Norway, but all other car insurance there is for the car, and wouldn’t cover you renting a vehicle. All registered vehicles are required to have liability insurance for property damage, bodily injury isn’t relevant since that is covered by our socialized medicine. I expect the rental companies already have that covered.
Looking around at Norwegian insurance companies’ advice for renting cars in Europe it appears collision is required to be covered in the EU/EEC, but the deductible can vary. You can by separate insurance to cover that if you rent cars regularly, since the rental companies charge a lot for a lower deductible.
Within most of Europe — and certainly within the European Union — your car-rental fee must include adequate liability coverage.
Also good advice is to request a letter from the CC for collision damage waver, as some placed will require it. Also mine states to be covered I must decline any and all of the rental CDW.
Of course, every country is going to be different here, so your question is kinda hard to answer.
In the UK, we have ‘Third Party, Fire and Theft’, which is compulsory and includes liability (that’s the ‘Third Party’ bit), and we have Comprehensive, which covers all of the above plus any damage you cause to your own car, which is not compulsory.
The vast majority of rentals I’ve had across Europe will include some sort of Collision Damage Waiver/Liability Insurance as standard (it’s sounds like maybe not in Iceland, unless they miss-sold you a premium package). It’s the extras around damage to your own car that you normally have to fork out more for, and that sounds like it’s covered by your own CC.
If it’s helpful to you, in the past I have purchased European-wide car insurance, when I was renting a lot. You can see here that it doesn’t cover Collision Damage/Liability specifically because that normally comes as standard with the rental. Which may be why your CC doesn’t include it.
So to your other question, no, people aren’t taking a big risk when they hire outside the US. In fact, from that link above
Collision Damage Waiver (CDW) or Supplemental Liability Insurance (SLI). Most rental policies include this, but some (notably in the US) do not. If you need CDW and SLI cover, visit our Annual Worldwide Plus CDW & SLI page