Car Rental Insurance in Europe for Americans - All you need to know
June 21, 2025
When it comes to car rentals, insurance can be a bit of a minefield – and it’s not helped by cross-continent discrepancies. For U.S. travellers looking to hire a car in Europe, we’ve untangled the web with our comprehensive guide below.
Why your U.S. car insurance won’t protect you in Europe
The first thing to understand is that, as a general rule, U.S. personal auto insurance policies do not extent coverage overseas – and it’s better to internalise that now than at the rental counter or, even worse, after an accident. This includes both collision and liability, which tend to be the two things that Americans assume they are automatically covered for, because what’s how it works for us back home.
In a nutshell, the auto insurance you rely on at home will not be valid in Europe, meaning you have to look elsewhere for protection when renting a car.
Credit card coverage: The pros and cons
Using your credit card’s built-in rental-car insurance can certainly save you money when you’re driving in Europe. Most major cards include collision and theft coverage, which means you can avoid pricey add-ons at the rental counter. The coverage usually kicks in automatically when you pay with the card and decline the rental company’s insurance. Many cards even waive the usual European excess, i.e. the portion of damage costs you’d normally have to pay out of your own pocket. However, not every card automatically waives it, and coverage can vary by bank and card type – another question to ask of your card provider before you travel.
Credit-card insurers sometimes ask for detailed paperwork, including an itemized repair report. While there have been reported cases where foreign rental companies were slow to provide documents, these situations are not the norm. In most cases, especially when renting from large, well-known international brands, renters are able to supply the required paperwork and complete their claim without major issues. Still, delays can happen, so it’s worth being aware of the possibility.
So, do you need to buy insurance?
If you are booking through CheapCarRental.com, we don’t require U.S. citizens to purchase rental insurance, because it isn’t legally mandatory. However, since U.S. auto insurance doesn’t apply abroad, you will still need some form of protection. You can rely on your credit card’s coverage, which is the most cost-effective option, but if you do go down that route you should be prepared for potential paperwork requirements, as highlighted above. Or, if you prefer to keep things simpler, you can buy insurance directly from the rental company at the counter