Should You Decline Car Insurance When Traveling Abroad?

Are you planning on traveling abroad this summer to Canada, Mexico or another country? If so, you may be offered the opportunity to have additional car insurance by your car rental company but the big question is should you accept it?

Understand your coverage

Several credit cards offer primary rental coverage as part of their cardholder benefits, which means the card would pay out first in the event of an accident and you could avoid involving your own auto insurer.

But that may not be what the rental car agent is offering with your rental agreement. You might be asked to opt for a collision damage waiver, or CDW (also known as a loss damage waiver). If you elect this option, and your rental car is damaged or stolen, the car rental company will likely waive any costs to you.

So why would you pay extra for a CDW when your credit card already provides primary rental car insurance?

Well, even though the latter provides protection in the case of an accident, you’ll likely still have to deal with a deductible, paperwork and lost time as you wait to be reimbursed by insurance. In most cases, a CDW lets you walk away free of all of those hassles and expenses, which can become even more cumbersome when you’re dealing with them internationally.

CDW waivers can cost between $10 and $30 per day. So if you’re renting a car for two weeks, it can pile a significant sum onto your rental fees. But consider whether what you’d save by skipping the CDW would be outweighed by the out-of-pocket costs, increased insurance premiums and headaches while dealing with an international claims process.

Be aware of exceptions by card, country

Every credit card has its own policies and restrictions, and insurance criteria may differ depending on where you’re traveling. A sampling of some potential trip-ups:

  • Discover discontinued car rental insurance as a benefit on any of its cards as of Feb. 28, 2018.

  • American Express cards can provide primary rental coverage, but you have to enroll and there’s a flat rate of $19.95 or $24.95 per rental period depending on the coverage you select (less in California and Florida). Know that the coverage doesn’t include any vehicles rented in Australia, Ireland, Israel, Italy, Jamaica and New Zealand.

  • Italy requires all foreign renters to include a collision damage waiver in their rental agreement.

  • Ireland allows foreign renters to decline the collision damage waiver, but the rental company may place a hold on your credit card for the amount of the deductible, which could cost thousands and hamper your purchasing power while you’re traveling.

  • The Chase Sapphire Preferred® Card and the Chase Sapphire Reserve® both offer primary rental insurance and don’t exclude any countries, but they do exclude most luxury cars, including certain models of BMW, Mercedes-Benz, Cadillac and Lincoln.

Get Car Insurance Here

For affordable car insurance in Central Oregon contact the Farnsworth Agency today at (541) 318-8835 or click here to connect with us online.