Refusing foreign rental car insurance? Realize the Risks

Susan Kelly

Dec 31, 2022

You will pick up your rented car in a foreign country. Since your credit card already provides main rental coverage, you politely decline the additional insurance and give yourself a high five. Oh, hold your horses, you smug.

Global Travel

Having main coverage through your credit card is great, but the Nerds advise purchasing additional insurance, especially while traveling internationally. And here's why.

Find out what you're covered for

You can avoid involving your auto insurance company if you have one of the credit cards that provide primary rental coverage as part of its cardholder perks.

However, the terms of your rental agreement may include something other than such a provision. You may be offered the chance to purchase a CDW or collision damage waiver (also known as a loss damage waiver). If you choose this plan and something happens to your rental automobiles, such as damage or theft, the firm may not charge you anything.

If your credit card already includes primary rental car insurance, there's no reason to spend more for a CDW.

However, even while the latter offers some measure of safety in the event of an accident, it is not without its drawbacks, including the deductible as mentioned above, paperwork, and time lost. At the same time, you wait for insurance to pay out. If you have a CDW, you won't have to worry about pesky costs and headaches, which may multiply exponentially when you deal with them on a global scale.

The daily cost of a CDW waiver can range from $10 to $30. If you need the automobile for more than two weeks, you may pay more than expected. Think about whether the money you'd save by not getting the CDW would be more than offset by the need to pay for repairs out of pocket, pay more for insurance, and deal with a more complicated foreign claims process.

Check for the card and country-specific restrictions.

Credit card companies and insurers have their own rules and regulations, and your mileage may vary depending on where you go. Some pitfalls you might encounter include the following.

Until further notice, all Discover cards will no longer provide automobile rental insurance as a perk.

If you have an American Express card, you may sign up for primary rental coverage at a flat charge of either $19.95 or $24.95 per rental period (less in California and Florida). Vehicles leased in Australia, Ireland, Israel, Italy, Jamaica, and New Zealand are not covered.

A collision damage waiver is mandatory for all foreign rentals in Italy.

Chase Sapphire Preferred® Card

While Chase Sapphire Preferred® Card Ireland cardholders from other countries are allowed to decline the collision damage waiver, doing so may result in a hold on your credit card for the deductible, potentially costing thousands of dollars and limiting your ability to make purchases while abroad.

Neither the Chase Sapphire Preferred® nor the Chase Sapphire Reserve® excludes any nations from their primary rental insurance coverage. Still, the Chase Sapphire Preferred® does not cover expensive vehicles like BMW, Mercedes-Benz, Cadillac, or Lincoln. Some vehicles, including vintage automobiles, are not covered by the Chase Sapphire Reserve®.

Shows Fundamental Rental Coverage

The principal rental insurance benefits offered by the many credit cards you use could differ. Call the customer service number on the back of your card before you go for your trip to get the most recent details on which card is suitable for your needs. You should be aware that there are several situations in which coverage will not apply, including but not limited to the following:

Expensive and old cars

Vehicles having open beds, such as pickup trucks

Autos, scooters, and motorhomes

Weigh the benefits and drawbacks

If you've done your research and determined that your credit card's coverage is adequate for your vacation, you'll need to decide whether or not the additional cost of the rental agency's CDW is justified. It could significantly increase the monthly rent.

On the opposite side, if something happened to your car and you didn't have collision coverage, you'd have to pay a deductible and the full cost of repairs out of pocket before your insurance company reimburses you.

In addition to the CDW provided by the rental agency and any credit card protections, you may purchase additional insurance from a third party. You can compare rates at sites like, search for a new policy, or even add collision coverage to your existing trip cancellation insurance policy if you want.

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