Eu Auto Insurance: What's Required?

When registering a car in an EU country, it is mandatory to insure it for third-party liability. This compulsory insurance is valid in all other EU countries and covers damage to property or injury to anyone other than the driver. However, it does not cover other costs such as repairs to the insured vehicle.

People are not required to carry auto liability insurance in the EU, but they must ensure their vehicle is properly insured when travelling between member states.

Liability insurance is included in rental fees

When renting a car in the EU, liability insurance is typically included in the rental fee. This covers injuries caused to other people while driving, or damage to other people's property. However, it is important to note that collision coverage for the rental car itself is not included in the liability insurance. This means that if the rental car is damaged, you will be responsible for the cost of repairs.

To avoid this, you can purchase a Collision Damage Waiver (CDW) from the rental company, which is not technically insurance but an agreement that relieves you of financial responsibility in the event of damage to the car. However, CDWs sold by European rental car agencies tend to be expensive, adding 30-40% to the daily rate, and they don't cover all parts of the car. Additionally, they may have large deductibles, and theft insurance may cost extra.

As an alternative, you can consider purchasing the Rental Car Damage Protector, which provides primary coverage for collision, loss, and damage in almost every country for a much lower daily rate. This option offers comprehensive insurance, has no deductible, and covers theft as well as damage caused by fires, storms, and vandalism.

It is worth noting that some countries in Europe, such as Ireland, prohibit the use of third-party insurance, so you must purchase the insurance directly from the rental car agency. Therefore, it is recommended to research the specific requirements of your destination country before renting a car.

In summary, while liability insurance is typically included in rental fees in the EU, it is important to understand its limitations and consider additional coverage options to ensure you are fully protected during your travels.

Rental agencies may question credit card coverage

Rental agencies may be sceptical about whether your credit card covers you for rental car insurance. Many US credit cards offer free coverage that allows you to skip the rental company's collision damage waiver (CDW). This is a waiver that says the rental company won't come after you financially if the car is damaged or stolen. However, this perk is less common for credit cards issued in Europe, so you may encounter resistance from rental agents when you turn down their CDW coverage. This is especially true in areas where US visitors are less common.

To reduce pushback, it is recommended that you bring a printout of your credit card's car rental coverage provisions. If possible, try to get a copy in the language of the country you're visiting.

It's also important to note that some countries have regulations about what credit cards can cover for car rentals. For example, in Italy, specific coverage against theft is required, and in Ireland, you are prohibited from purchasing collision coverage from a third party, such as a credit card company. Instead, the driver must purchase it themselves. Therefore, it's a good idea to ask what type of coverage is included as part of the rental rate before you arrive in the country.

Some countries have special requirements

When registering a car in any EU country, you must insure it for third-party liability. This is valid in all other EU countries and covers any damage to property or injury to anyone other than the driver. However, some countries have special requirements regarding rental cars and credit card coverage.

In Italy, for example, specific coverage against theft is required by law. In Ireland, regulations prohibit the use of third-party insurance, meaning that the driver must purchase insurance from the rental car agency. This is in contrast to most other European countries, where liability coverage is included in the rental fee.

A few other countries with special requirements include Israel, Jamaica, and New Zealand. It is important to research the requirements of your destination country before travelling, as credit card coverage varies by country. For example, some credit cards exclude coverage for certain types of luxury cars and won't cover rentals in certain countries, such as Ireland and Italy.

Additionally, it is worth noting that while your home country's car insurance policy may cover third-party liability across the EU, it may not cover the cost of injuries incurred in an accident or other liabilities.

US rental companies may be the simplest option

When it comes to renting a car in Europe, there are a few things to keep in mind. Firstly, liability coverage is typically included in your rental fee. This covers injuries you may cause to other people or damage to their property. However, it's important to note that collision coverage for the rental car itself is usually not included. As a result, rental companies will often require you to purchase a Collision Damage Waiver (CDW) to reduce or eliminate charges if the car is damaged.

Using a US rental company may be the simplest option for several reasons. Firstly, US credit cards often offer free coverage that allows you to decline the rental company's CDW. This perk is less common for European credit cards, which may lead to resistance from rental agents when you turn down their CDW. To reduce this pushback, it's helpful to bring a printout of your credit card's car rental coverage provisions, preferably in the local language.

Additionally, US rental companies with a presence in Europe may offer more familiar and accessible customer service. This can be beneficial if you encounter any issues during your trip, such as accidents or disputes over billing. These companies also tend to have a wider choice of pickup and drop-off locations, making it more convenient for your travel plans.

Furthermore, US rental companies may provide more transparent pricing and fewer hidden fees. When booking with a European company, there may be additional costs that are not disclosed until you pick up the car. By using a US rental company, you can avoid potential language barriers and have a clearer understanding of the rental agreement.

Lastly, US rental companies often have websites and customer support in English, making it easier to navigate the booking process and ask any necessary questions. This can save you time and effort, especially if you are not fluent in the local language of your destination.

In conclusion, while renting a car in Europe can be a great way to explore, using a US rental company may offer several advantages in terms of insurance coverage, customer service, pricing transparency, and language accessibility.

Credit card coverage may not cover all countries

When it comes to renting a car, having the right insurance coverage is essential. While your credit card may provide some rental car insurance benefits, it's important to understand the limitations, especially when travelling internationally. Here are some key points to consider:

Credit Card Coverage May Not Apply in Certain Countries

Credit card rental car coverage typically applies within your country of residence and may also extend to international destinations. However, it's important to note that certain countries might be excluded from this coverage. For example, standard Visa and Mastercard coverage usually excludes rentals in Israel, Jamaica, and Ireland. On the other hand, American Express may not cover rentals in Italy, Australia, and New Zealand. These exclusions vary depending on the credit card company and the specific card you hold. Therefore, it is crucial to review the terms and conditions of your credit card carefully before assuming you're covered.

Understanding Primary vs. Secondary Coverage

It's important to understand the difference between primary and secondary coverage when it comes to credit card rental car insurance. Primary coverage means that you can file a claim directly with your credit card company without involving your personal auto insurance policy. This is a valuable feature as it simplifies the claims process and prevents potential increases in your auto insurance premiums. Secondary coverage, on the other hand, kicks in after your personal auto insurance policy has been exhausted. This means you would first need to file a claim with your auto insurance company and then seek reimbursement from your credit card company for any remaining costs.

Limitations and Exclusions

Credit card rental car coverage usually applies to specific types of vehicles, such as standard cars, and may exclude luxury or exotic vehicles, motorcycles, and trucks. Additionally, there are often time limitations, with coverage typically provided for a maximum of 14 to 31 consecutive days. It's important to review the fine print of your credit card agreement to understand these limitations and ensure you have the necessary coverage for your trip.

Liability Coverage

While credit card rental car insurance typically covers collision damage or loss damage waivers, it may not include liability coverage. Liability coverage protects you in case you are found at fault for an accident, covering medical expenses for injured passengers or damage to other vehicles and property. This type of coverage is usually provided by rental car companies at an additional cost or may be included in your personal auto insurance policy. However, it is generally not included in credit card rental car insurance, so it's important to review your specific coverage details.

Knowing Your Coverage

Before renting a car, especially in a foreign country, it is crucial to understand the extent of your credit card's rental car insurance coverage. Review your credit card agreement, benefit guide, or contact your credit card company directly to clarify any doubts. Knowing exactly what is covered and what is not will help you make informed decisions and ensure you have the necessary protection while travelling.

Frequently asked questions