By the time you read this, I’ll be on vacation in Ireland.
I will rent a car and drive around the country. Naturally I don’t want to expose myself to losses resulting from a car accident while I drive a rental car in Ireland. I did some research in rental car insurance. I’m sharing this here with you.
Liability vs. Theft, Collision and Damages
On any auto insurance policy in the U.S., the coverage for liability and the coverage for the car are separate. If you have an older car, you may not have coverage for the car itself, but you should have coverage for liability, i.e. damage you cause to others.
This liability coverage may or may not follow you worldwide. You have to call your auto insurance company to find out. If you are covered, there is usually no deductible on liability coverage.
Theft is covered under comprehensive while damage caused by a collision is covered under collision. There are separate deductibles for comprehensive and collision coverage.
Your collision and comprehensive coverage from your auto policy also may not follow you worldwide. I called my insurance company. They told me I will be covered for liability worldwide but I won’t have collision or comprehensive coverage outside of U.S. and Canada.
Primary Rental Car Insurance
Your own auto insurance usually covers you when you rent a car, at least in the U.S. If you don’t want to use your own auto insurance (and subject yourself to premium increases in case you file a claim), you can buy primary rental car insurance.
I found two places that sell primary rental car insurance:
|Company||American Express ||TravelGuard|
|Product||Premium Car Rental Protection||Car Rental Collision Insurance|
|Cost||$18-25 per rental||$9 per day + $3 service fee|
|Coverage Limit||$75,000 – $100,000||$35,000|
|Max. Days||42 (30 for WA residents)||180|
|Covers Theft and Damages||Yes||Yes|
|Covers Loss of Use||Yes||No|
|Excluded countries||Australia, Ireland, Israel, Italy, Jamaica, and New Zealand||Ireland, Jamaica|
 Must enroll an American Express card
I don’t find primary rental car insurance that useful. I am exposed to the risk of having an auto accident every day when I drive my own car. That risk is covered by my own insurance. I don’t see why all of a sudden I want to pay extra to protect my own insurance only when I rent a car. If you want primary rental car insurance though, I think the American Express product is a better deal.
Secondary Rental Car Insurance
Many credit cards provide free rental car insurance. This insurance only covers theft, collision and damages. It does not cover liability. Usually it’s also secondary, which means your own auto insurance must pay first. In effect, the credit card’s rental car insurance only pays your deductible. If you don’t have collision or comprehensive coverage on your own auto insurance policy, then the credit card’s insurance becomes primary.
|American Express||Visa Signature||MasterCard|
|Coverage Limit||actual cash value||actual cash value||$50,000|
|Max. Days||30||15 in U.S.; 31 outside U.S.||15|
|Covers Theft and Damages||Yes||Yes||Yes|
|Covers Loss of Use||Yes||Yes||Yes|
|Excluded countries||Australia, Ireland, Israel, Italy, Jamaica, and New Zealand||Ireland, Northern Ireland, Israel, Jamaica||Australia, Ireland, Israel, Italy, Jamaica, and New Zealand|
If you are still with me, you notice Ireland is one of the excluded countries in all these insurance options, and I happen to be going to Ireland! I don’t know what the deal is with Ireland. Theoretically AmEx, Visa, and MasterCard cover me if I rent a car in Iraq but they won’t cover me in Ireland. Isn’t that crazy?
The rental car companies in Ireland offer Collision Damage Waiver (CDW) for about 15 Euros per day, and it comes with a deductible of 1,500 Euros or so. 1 Euro is worth about $1.50 now. If I pay another 10 Euros per day for a so-called “Super CDW,” they will lower the deductible to 100 Euros. $25 Euros per day for insurance is more than the cost for renting the car itself!
Fortunately I found a way to avoid being fleeced. The rental car insurance offered by a regular (“Platinum”) MasterCard excludes Ireland. The insurance from a World MasterCard (except those issued by Citibank) includes Ireland. Needless to say I upgraded my MasterCard to a World MasterCard. Whew!