Well, here's a dry but important issue . . . .

I'm renting a car in Costa Rica for the first time and I hear that Americans are often pressured (forced) to buy various expensive insurance policies at the counter there.

So I've done a little homework to see what's really necessary.

Most travellers are familiar with the free "collision damage coverage" that you get from major credit cards. Indeed, as long as you make sure you don't violate any of the fine print, that seems to adequately protect you for any damage you do to a foreign rent-a-car. For instance it will work fine in Costa Rica -- if the car rental company allows me to decline their CDW coverage.

But a thornier issue for overseas car rental is liability coverage. This is the coverage you need if you smash into another car or otherwise damage people or property. The CDW isn't going to help you with this. You need "liability" coverage. If you rent a car in the US, no problem, because your personal auto policy includes liability. But that policy doesn't cover foreign driving.

It does appear that most countries require rental companies to insure their customers for liability. But the limits can be very low. In Costa Rica, for example, at a reputable company I'm dealing with, they only insure you for $500 in damage! That's not likely to cut it if, God forbid, you actually hit someone. The rental agency will sell you additional liability coverage, but of course it's priced outrageously compared to the small risk (like $15/day).

Does anyone know a solution to this problem? It's ironic that credit cards give you the CDW for free (a small but real risk), but that it's hard to get liability coverage (a tinier risk, but one you'd really like to insure for). I'd love to be able to buy a policy -- or better yet, use a free credit card -- that would insure me for liability coverage on foreign auto rentals.

Does anyone have a solution? Thanks.

Well, there are some US policies that do provide world wide liability coverage on rental vehicles. You may not be able to purchase a policy like this, but one that I am aware of is the Chubb High Value automobile policy.

Finding the coverage for free on a credit card (or even low cost) is going to be next to impossible. Realize that on CDW, the potential risk to the car issuer is maybe $50,000 max. Liability coverage, if offered, with be useless to most people if it provided less than $300k coverage - something that I doubt the credit card would give for free or even at low cost.

Thanks for the info on Chubb. It may not make sense to change by insurance company for this, but I'd sure like to know the options.

I think you're right about the liability coverage. While the risk is much lower than the CDW, the damages are higher, and I doubt any credit card company wants to mess with foreign legal systems on this.

FWIW, I phoned down to my Costa Rican car rental company and they told me the $500 liability number was "a mistake" (hmmm). It seems to be 500,000 colones (now THAT'S a big mistake!). So I think I'm sufficiently OK on this rental. But this is definitely a potential minefield that I've never paid much attention to, even though I've been renting cars overseas for 20 years (and, knock wood, never had a bigger problem than a flat tire).

this site provides third-party liability coverage for many parts of the world:
http://insurance4carhire.com/
it will be much less expensive than buying it from the rental car company.
caveat: I have not used this company's products and cannot say how reliable (or not) they are.

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this insurance also may not be accepted, even though it is valid coverage. I doubt that you could convince an italian rental car agency that you were covered.

I signed up for the full coverage with Amex.

As I read the fine print, it seems to cover just about everything, including the noxious "loss of service" charges they like to throw in there.

The best part is, it's only $24.95 per rental, up to 40 days (IIRC), so a rental of a week or two averages out to bupkus per day, and the peace of mind seemed worth it to me.

As far as I remember, the "full coverage" offered by AMEX does not cover third party liability.

Insurance4carhire does offer some liability coverage (at a relatively high price), but it does not seem particularly useful to Americans.

It does not have liability coverage, but your primary auto insurance will have that.

It will cover you worldwide except Italy, Australia, New Zealand, Israel, Ireland and Jamaica.

from:

http://www.bargaineering.com/article...ance-plan.html

The OP was looking for liability coverage for a foreign rental. Reading of the summary posted in the link a couple of posts above, states that the Premium Coverage "provides some liability."

And remember, MOST US auto policies do not extend liability coverage outside of the US, its territories, and Canada - even as secondary coverage.