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If I’m Traveling in Europe What Kind of Car Insurance Do I Need?

When you rent a car in Europe, it’s important to remember that liability insurance is normally included in the rate. Fire and theft insurance may also be included, but it’s always a good idea to ask.

What typically isn’t included is insurance against collision damage. To protect yourself against having to pay for car repairs (or even a brand-new car) in the event of an accident, you need a Collision Damage Waiver or “CDW.” This is available from two sources:

1. Rental agencies

The rental agent will offer you a Collision Damage Waiver when you pick up your car. In a few countries, such as Italy, you may be required to take the CDW. The cost isn’t cheap, but buying it from the rental-car agency is simple and offers peace of mind. You may also want to inquire about theft insurance, (LDW), which is usually mandatory with Italian car rentals but is optional in most countries.

2. Credit-card companies

Some credit-card companies provide free collision insurance for rentals charged on their Gold or Platinum cards. Unfortunately, the coverage isn’t always as good as it seems, and many card issuers no longer protect overseas travelers or limit their protection to cheaper cars.

To make matters worse, you may be required to authorize a deposit on your credit card up to the replacement cost of the vehicle, which isn’t very practical if the car’s value is more than your credit-card limit. If you get into an accident, you’ll normally have to settle up with the rental firm, then seek reimbursement from the credit-card company after you get home.

It is also possible to avoid the need for extra insurance. If you live outside the EU and are driving for at least 17 days, consider a short-term lease (such as a Peugeot Open Europe “Buy Back” lease or a Renault Eurodrive lease) instead of a traditional car rental. You’ll get a new, factory-fresh car that’s fully insured at no extra cost. As a bonus, leases are available to drivers who may be too young or too old for a standard car rental.

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