Rental companies in Europe never deal with your third party insurance provider (credit card insurance or your own north American policy). If the vehicle is damaged (no matter who is at fault), you are charged - up to the stated excess amount - and then it's for you to reclaim that from your provider. The system works - I use amex insurance - and I have been quickly refunded after a damage claim. But it was charged to my card first, and I subsequently got the money back from amex insurance.
Blocking your credit card in those circumstances would just put you straight on the 'do not rent' list.