Rental Car Insurance Outside the US

When our daughter, Julia, went to Outward Bound, Costa Rica as a teenager, she was told that there are three kinds of fun.

  • Type 1 Fun is fun when you do it and when you look back on it. It is just fun.
  • Type 2 Fun is not so much fun when you are doing it, but fun when you look back on it. Kind of like riding in the rain.
  • Type 3 Fun isn’t fun when you are doing it and no fun when you look back on it either.

The teens at Outward Bound were told that they would experience all three types of fun on the trip. And while Julia had a great time, she definitely experienced all three types of fun.

At Adventures in Tandem, we strive to keep our fun to Types 1 and 2 only. That doesn’t mean that sometimes we, as tour organizers, won’t experience Type 3 Fun. On our recent trip to the Loire Valley in France, while our guests were out enjoying the French countryside on their tandems, we experienced a bit of Type 3 Fun and we would like to tell you about it now.

On our recent tour in France, we got into a minor accident with our rental car (our fault). No one was hurt, the damage to both cars was minimal, and both cars were still safely drive-able. But, when we went to look into how we were covered, things got interesting.

When you rent a car, they typically offer you the following:

  1. Liability Insurance Liability insurance covers you in the event you are in an accident that is your fault. It will cover the cost of any property damage as well as the medical bills from any resulting injuries. By law, rental companies must provide the state required minimum amount of liability insurance coverage—generally this figure is low and does not provide much protection.
  2. Loss Damage Waiver (LDW) Also referred to as a collision damage waiver, an LDW is not technically insurance – it is designed to relieve or “waive” renters of financial responsibility if their rental car is damaged or stolen. It only covers your rental car.
  3. Personal Accident Insurance This covers the driver and passengers for medical and ambulance bills for injuries caused in a car crash.
  4. Personal Effects Coverage This provides insurance protection for the theft of items from a rental car.

So, if you are like us, when you rent a car, you always turn down all of those coverages. You probably thought, like we did, that your auto insurance policy covered it. Or perhaps you thought your credit card did. Well, if you are in the US (or maybe Canada), you are probably correct. However, if you are somewhere else (like France), you may not be covered – as we learned the hard way!

So after the accident, we checked with our auto insurance company and found out that we were not covered at all. We also have an umbrella policy, so we checked that. An umbrella policy is always secondary insurance and only pays when your primary insurance maximums have been exceeded. Since our auto insurance didn’t cover us, the umbrella policy wouldn’t either.

Then we checked our credit card company. The paperwork says we have coverage. Yay! But wait, it only covers the collision or LDW part of the insurance. So, the damage to our rental car was covered, but not the damage to the car we hit. Dang!

So now what? Well, we are going to have to pay for the damage to the car we hit (if they ever send us bill that is – it’s been over two months and we haven’t heard anything yet).

And most important – next time we are out of the US, we are going to take the Liability Insurance that is offered. And you should too (but first check with your auto insurance company to make sure they won’t cover you).

Overall, even though we experienced some pretty hard core Type 3 Fun in France, we feel that we got off easy – nobody was hurt, it doesn’t seem like we did too much damage and we learned an important lesson. And we are happy to be able to share that lesson so that this won’t happen to you.

Happy travels!