Car Insurance, Rental Cars, and International Travel

A client called me last week to discuss a question about her car insurance. She’s taking a vacation with two friends in May and will head for Europe for a couple of weeks. They’ll travel through Italy, France, head up to Switzerland, and then back to Italy before returning home. They will rent a car for part of the trip and she wanted to know if her car insurance covers a rental car in Europe.

The answers range from absolutely not to absolutely yes.

  • Domestic Only: Most car insurance companies provide coverage anywhere in the United States and will extend coverage to rental cars. There are few who don’t so always confirm.
  • US & Canada: Many companies will cover your car and a rental car if traveling anywhere in the US and even in Canada.
  • US Territories: Some companies extend coverage to US territories such as Puerto Rico, Guam, the US Virgin Islands and American Somoa, however, confirm before you go.
  • Mexico: Car insurance if you’re driving across our southern border is limited at best. Many exclude coverage in Mexico while others provide limited coverage which means the first two to five miles. If you’re traveling to Mexico, Central America, or even further south, I recommend buying the local insurance.
  • Europe & Asia: A few carriers extend coverage when traveling to Europe or other western countries such as Japan, Australia, etc. Some may have restrictions by country or coverage while others don’t. MetLife extends coverage for both property damage and personal liability. Safeco requires a specific car insurance package to provide property damage coverage and an umbrella policy to cover personal liability.

Regardless of where you’re traveling, confirm with your agent what coverage is provided by your policy and what limitations you may have. Here are a couple of considerations:

  • Confirm you have enough property damage coverage in the liability and uninsured motorist limits to pay for a new car especially a high-end car.
  • You’ll need to carry both collision and comprehensive deductibles to fully protect you in an accident claim when renting a car. If you don’t carry comprehensive or collision coverage, add it to your policy for the duration of the trip or buy it from the car rental company.
  • If you don’t want an international claim to follow you home and impact your rates, buy the car insurance from the rental or travel company.
  • If you’re traveling to multiple countries, such as in Europe, confirm if the insurance applies to each country you’re visiting.

In the case of my client, I quoted the coverage she needs to be fully covered while driving a rental car in Europe. The cost is about is about $220 a year. She is then able to compare this with the cost of purchasing rental car insurance through Orbitz to see which provides the better value. Where are you traveling this summer? Share your travel plans, questions, and experiences with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!

Thanks!

Ed Wise

Wise Insurance Group

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