Car Rental Insurance for Tourists in Europe: What You Need and What's Covered

A standard car rental in Europe includes two types of insurance as default: CDW and TPL. Neither gives you complete cover, and neither is optional. Understanding what each does — and what it does not — tells you exactly what gap you are managing when you consider buying extra protection.

What is included as standard

Every car rental rate in Europe legally includes:

CDW (Collision Damage Waiver): covers damage to the rental car body caused by an accident or collision. The catch is the excess — a maximum amount you still owe even with CDW in place. Typical excess ranges:

TPL (Third-Party Liability): covers damage you cause to other vehicles, property or people. EU law mandates minimum TPL on all rental cars. The included amount meets legal minimums but is sometimes set low — major companies typically provide higher limits automatically.

What CDW does not cover

Even with CDW, these are almost always excluded from the standard rate:

• Tyres and wheel rims
• Windscreen and glass
• Underbody and undercarriage
• Roof damage
• Interior damage (seats, dashboard, trim)
• Key loss or lockout
• Damage caused while violating the contract (driving under the influence, off-road use without permission, F-road use in Iceland)
• Theft of personal belongings

These exclusions mean the standard CDW covers the car body in a standard collision only. Anything outside that definition remains the renter’s financial responsibility.

The excess waiver: how to reduce the risk

An SCDW (Super CDW) or full excess waiver reduces the excess to zero for covered damage. If you damage the car body, the company cannot charge you the excess amount.

From the counter: €15 to €25 per day depending on the country and car category.

From third-party providers: €3 to €8 per day. Providers include:

• iCarhireinsurance.com
• Careasy.com
• insurance4carhire.com

Third-party products work differently: you still pay the rental company in full for any damage, then claim reimbursement from the insurer. This means you need sufficient card balance to cover the excess at the time of the incident. The counter product eliminates the charge directly in the local rental contract.

Both approaches are valid. The third-party route costs significantly less. The counter product is simpler if you want to avoid any out-of-pocket moment.

Compare car rental rates with insurance options

Credit card cover: when it works and when it does not

Several premium credit cards (Visa Signature, Mastercard Gold, American Express) include car rental insurance as a benefit. The conditions are strict:

1. The entire rental cost must be charged to that card — paying even part of it with another card or PayPal voids the cover
2. CDW must be declined at the counter — accepting CDW from the rental company makes the card cover secondary or void
3. Declining CDW increases the deposit hold substantially — confirm your available credit limit covers the full excess before declining
4. Claims go through the card issuer — you pay the damage charge first, then submit a claim with documentation
5. Some card policies are secondary cover — they only pay what your primary insurance (e.g., a travel policy) did not

Before relying on card cover, read the specific policy document for your card. “Car rental insurance” in a card’s marketing materials may mean primary cover, secondary cover or a limited amount that does not match a typical excess.

Country-specific variations

Car rental insurance rules vary slightly across Europe:

What tourists most often misunderstand

“Full insurance” does not exist. Every rental contract has exclusions. The question is not whether you have full cover — no one does — but how large the gap is between what you pay and what you are exposed to.

Counter upsells are not compulsory. GPS, roadside assistance upgrades and personal accident insurance are add-ons, not requirements. The only required insurance is what appears in the rate conditions.

TPL minimums vary by country. The EU requires minimum TPL on all rental cars, but the minimum amounts differ. Major international brands typically provide higher limits automatically. Local agencies in some eastern European and Mediterranean markets may provide only the legal minimum.

For the complete insurance terminology guide, see car rental excess waiver.