If you’re like most renters, navigating Costa Rica’s rental car coverage options can be confusing, so we’ll try to simplify the insurance process and explain the options.  There are several rental car companies in Costa Rica from which to choose.  Some are large international chains, some are medium-sized local companies, and some are small mom-and-pop outfits.  At www.bestdeals2.com, we work only with the best and most trusted companies, so if you book your rental car with us, you can be sure you’re in good hands.

An Introduction to Costa Rica Rental Car Insurance

Auto insurance is mandatory under Costa Rican Law, but only the basic third-party liability protection insurance (TPL) coverage, so all the other available insurance coverages are optional, but highly recommended.  In this article, we will explain your options so you can choose the coverage that best fits your needs and travel plans, such as the Collision Damage Waiver/Loss Damage Waiver (CDW/LDW) Car Protection Plan, and the Extended Protection Coverage (SSP).  Keep in mind your credit card might offer an insurance coverage program that could also apply with the car rental agreement, but you have to be 100% sure it works outside your country of origin.

Important points to note

1.      Rental deposit: A minimum of US$1.000 (US$1.130 with taxes) vehicle damage deposit is required in most of the car rentals. This is the equivalent of the deductible in case of an accident, and it must be made with a valid credit card, such as Visa, Mastercard, Discovery, or American Express.  Your credit card issuer retains this amount until the rental period is completed, and when you return the vehicle undamaged and free of traffic violations, the rental company will submit an electronic request to the credit card issuer to release the deposit.

2.      Collision and Loss Damage Waivers (CDW/LDW): Although major credit cards, such as American Express, Visa, and Mastercard, provide CDW/LDW coverage, not all might work within Costa Rica, so before deciding, ask your rental company’s agent if your card’s coverage applies.  In some cases, you will need to provide an official letter from the credit card company that confirms that it provides CDW/LDW coverage in Costa Rica.

3.      Pricing: When you browse the internet, you’ll find conflicting prices between rental car companies, sometimes the differences are huge.  But remember, if you see a rental car listed at a price that appears too good to be true, it probably is!  So, if you want to get the best deal possible, book your rental car thru www.bestdeals2.com.

4.      Common company omissions: Many companies don’t include third-party liability in their car rental quotes, so be sure to ask and get in in writing.  If you choose to use your credit card CDW/LDW coverage, be sure it will really cover you in case of an accident.

Vehicle Rental Insurance in Costa Rica Explained

So, how does insurance coverage for a rental car in Costa Rica work, and what exactly is the rental car process?  Costa Rica’s largest insurance company is the National Insurance Institute (INS), which provides the required Liability Protection Insurance (TPL) car rental insurance, designed to provide limited liability coverage and financial responsibility for incidents involving third parties.  This is charged as a daily rate in your rental agreement, but keep in mind it does not cover any damages to the rental car itself, neither theft protection nor possible personal injuries.

The mandatory daily TPL rate has to be included in your rental agreement, but anything else is optional.  For third-party property damage, the TPL coverage covers up to US$20.000 with the $1.000 (+VAT) deductible charged as a deposit.  In case of injury or death of a third party not inside the rented vehicle, it covers up to USD$100.000 per accident, with no deductible, but it does not cover damage to the rented vehicle.

Additionally to the mandatory TPL coverage, renters can take one or more of the following optional coverages to drive in Costa Rica:

• Collision and Loss Damage (CDW/LDW) Coverage: this can be bought with the car rental agreement, it provides coverage for damages to the rental car in the event of a collision, rollover, or theft (but no tire damage, nor vandalism), and it waives any financial responsibility for the renter in case of an accident.

• Credit Card’s CDW/LDW Coverage:  Some clients prefer to decline local CDW/LDW coverage and, instead, use their credit card’s CDW/LDW coverage.  If you do so, you should know that there are several important drawbacks.  Even though your credit card may cover damage to the vehicle in Costa Rica, several conditions apply:

  In the case of an accident, collision, or rollover, you will be 100% financially responsible for all damages upfront.

  You will personally pay all repairs and related fees while still in Costa Rica.

  In order to file a claim with your credit card, you must present all the associated paperwork and fees.

  For the above reasons, many renters are uncomfortable with processing a collision claim on their own, or they are unable to assume the costs and delays.  Taking the optional local CDW/LDW coverage is often the safest and easiest solution, so the rental company will handle the logistics, including paying the repair bill and filing all incident reports and claims.  Another option for renters who insist on using the CDW/LDW coverage, is to take a third-party waiver (TPW) coverage, increasing property damage cover to US$2 million and reduces the deductible to US$0.

• Supplemental Protection Plan (SPP): this coverage includes any accident, no matter the seriousness of the cost of the damages.  It has US$0 deductible and the renter is released from the financial responsibility of the Third-Party Liability deductible (US$1.130) & Vehicle Protection deductible (US$1.130).  It also extends the limit for third-party property damage coverage to US$2 million per event, it includes Vandalism damage to the car (including tires and windows), and covers the cost of 24/7 nationwide roadside assistance, including towing services.

General Terms and Conditions of all the Vehicle Rental Insurance in Costa Rica

Be aware that the TPL, CDW/LDW or even the SPP do not apply under the following circumstances:

• When the driver fails to report an incident (collision or damage) immediately to rental company

• When the driver is under the influence of drugs or alcohol at the time of any incident

• When an unauthorized driver (one not registered as an additional driver in the rental agreement) causes any incident or other damage

• When the driver incurs any damage while driving on unauthorized terrain or not officially recognized roads.  This includes flooded roads or “off-road” conditions such as driving through rivers, lakes, mangroves and on beaches

• When the driver fails to comply with the corresponding insurance company’s legal claim process.  This includes, but is not limited to:

  Failing to report the incident to the Police

  Failing to report the incident or claim to the insurance company

  Failing to comply with all the legal process requirements

FAQs

• Do I need insurance to drive in Costa Rica?  Yes, you do.  However, there are many car rental insurance options to choose from.  See above.

• Does GEICO cover rental cars in Costa Rica?  GEICO does not offer international rental car coverage in Costa Rica.  Even if you have American car insurance or rental car coverage through your credit card, you must still obtain the Costa Rican third-party Liability Protection Insurance (TPL)

• Can foreigners rent and drive a car in Costa Rica?  Yes, foreigners can rent cars in Costa Rica, but the duration is depending on the validity of their tourist or transit visa duration.  The traveler must carry a valid passport and a valid driver’s license to legally drive in Costa Rica, as well as the original rental agreement.  Please note that there is a heavy fine for driving without a license in Costa Rica as well as possible legal charges.  Currently this fine is 280.000 colones or more (approx. US$500).  Additionally, the police may impound the vehicle.

• Does American Express Cover Car Rental Insurance in Costa Rica?  Yes, American Express provides CDW/LDW rental coverage in Costa Rica.  However, if you wish to use your AMEX rental insurance coverage, you must enroll for the service ahead of time and pay the indicated flat rate.  The rate varies per country, per rental period, and the chosen coverage.

For more information, visit https://www.adobecar.com/en/insurances/adobe-rent-a-car-insurance-coverage/