In Europe, Damage-Waiver Insurance Is a Card Game

Renting a car in Europe can be an anxious enterprise: You are in unfamiliar territory, contending with foreign currencies and laws. And as in North America, you may be dealing with a rental-car company trying to make you pay for something you don’t need, or a credit-card company making broad promises.

For years, desk clerks for the biggest U.S. rental companies have pushed to sell extra insurance to customers who probably don’t need it. Travelers are often already covered for such risks through their own regular auto insurance policies (check your own policy to be sure) or through a revolving credit card, American Express card or Diners Club card.

In Europe, the circumstances are even more complicated. As the comparison below shows, American credit cards may be of no use or of great help, depending on what kind you carry. One rule remains in place, however: The phrase “collision damage waiver” deserves your full attention.

CDW coverage, also known as a loss-damage waiver, is sold as a measure that protects renters from being held responsible if their rented vehicle is damaged or stolen. Before you say yes to any rental agent’s CDW pitch--thereby incurring extra expenses that can surpass $15 per day--check to see if you already have a card that gives you the coverage you want.

In most cases, credit-card coverage is limited to short-term rentals (often 15 consecutive days or less), and doesn’t take effect unless you decline the auto rental firm’s CDW coverage, and you use the card in question to pick up and pay for the rental vehicle. Most coverage excludes Italy, where restrictions are different from those in other European countries. (All renters there are required to buy theft insurance, which runs about $10-$14 daily for a compact car.)

Another crucial factor is that except for Diners Club, the credit-card CDW coverages described here are secondary--that is, they covers losses only after your own regular auto insurance had paid out its maximum. And if your own auto insurance has to make a payout, there’s a good chance that an increase in your premiums will follow. (Some credit-card-issuing institutions may offer primary coverage, but only in the most elaborate versions of their cards, reserved for most-prized customers.)

Here’s a quick overview of four well-known cards:

* Visa Gold credit cards (which carry a minimum credit line of $5,000) include primary rental-car coverage (with no deductible) in the event of theft, collision or vandalism in all European countries except Italy. The standard-issue Visa Classic credit cards do not include auto-rental insurance benefits. But many Visa card-issuing institutions add extras for their cardholders, and auto rental insurance is often among them.

“This is one of the cases where it can really pay to read the fine print,” said Visa U.S.A. spokeswoman Stephanie Caracristi. * Personal American Express cards offer secondary coverage in case of rental-car collision, fire, theft or vandalism, in every European country but Italy, a spokesman said. There’s no deductible, and the policy only applies to cars valued under $40,000. American Express Optima True Grace cards do not offer that coverage; coverage of corporate cardholders varies by company.

* Gold MasterCards (which carry credit limits of $5,000 or more) include European rental-car coverage that roughly follows the same ground rules as the card’s competitors, with a damage or loss limit of $50,000. Though it does cover most rental vehicles, Gold MasterCard’s coverage excludes sport-utility vehicles and luxury cars. Standard MasterCards do not automatically include European car-rental coverage, but many issuing institutions add it. Individual cardholders should inquire to be clear on their benefits.

* Diners Club, which issues personal and corporate cards, offers primary CDW coverage on both, covering theft, collision, vandalism and fire in every European nation but Italy. No deductible. Rental vans carrying up to eight passengers qualify for coverage; high-performance vehicles do not.

As a Diners Club spokesman is quick to point out, that primary coverage means that if your rental car suffers damage that qualifies for coverage, the Diners Club payment is automatic, and you need not worry about payment by your auto policy at home, or rising premiums.

If you do choose to rely on a card for your CDW coverage, be forewarned: European car-rental agencies may insist on blocking a large amount of credit on the card as a deposit ($5,000-$14,000 is not unusual)--a move that could severely cramp your vacation finances, if you’re unprepared for it. One way to give yourself flexibility to use one credit card for your day-to-day spending, another for your rental-car transaction.

If you decide not to count on your credit cards, how much will CDW coverage in Europe cost? I concocted an imaginary weeklong car rental, an economy manual-shift beginning June 1 at London’s Heathrow airport, and called around for quotes. Alamo’s rate was more than $17 per day. Avis’ was $14.75 daily. Hertz’s, usually offered as part of package, separately worked out to $14.32 daily. Rates elsewhere on the Continent are roughly comparable.

Reynolds travels anonymously at the newspaper’s expense, accepting no special discounts or subsidized trips. To reach him, write Travel Insider, Los Angeles Times, Times Mirror Square, Los Angeles 90053; telephone (213) 237-7845.