The Costa Rica Travel Blog is the current traveller, will-be traveller, has-been traveller, and should-be traveller's guide to everything Costa Rica. Information, stories, news, and advice written by the Pura Vida! eh? Inc. team; Costa Rican insiders, outsiders, and everywhere-in-between-siders.

Costa Rica Car Rentals: Credit Card Insurance Coverage And Declining Part CDW With Costa Rica Car Rental Insurance

Costa Rica Car Rentals: Credit Card Insurance Coverage And Declining Part CDW With Costa Rica Car Rental Insurance

NOTE: The content on this page was last updated on July 15th, 2017.

Looking for Costa Rica vehicle rental discounts? As a thank you for visiting us, WE OFFER TRAVELLERS FREE ACCESS TO A 25%-50% DISCOUNT OFF VEHICLE RENTAL RATES when booking with the vehicle rental agency directly using our “Pura Vida! eh? Exclusive Promotion” code. Click here for more information and/or to obtain the car rental promo code. Con mucho gusto (you’re welcome) and pura vida! 🙂

Costa Rica car rental insurance
Costa Rica vehicle rental insurance; get ready for a whole new load of baggage.

COSTA RICA CAR RENTAL INSURANCE: WHAT IS “MANDATORY” INSURANCE?

Just when we thought we had shed enough light on the topic of renting a vehicle in Costa Rica to avoid travellers’ panic and regret (via our related blog posts, or, blog novels rather: Should You Rent A Car For Your Costa Rica TripHow Not To Fall For A Car Rental Scam, and Good Car Rental Agencies Are Hard To Find. Here’s Where We Choose To Look), an influx in the number of Costa Rica car rental insurance emails (that target the act of declining part CDW insurance) that we have received lately expose confusion and concern throughout the travel community of a whole new kind. Ah, Costa Rica car rental insurance. Welcome back. We (have most certainly not) missed you.

Travellers, if you have made your way to this page looking for information regarding the various types of Costa Rica car rental insurance available for purchase (or you are in search of a detailed explanation of “mandatory” car rental insurance in Costa Rica) please see the “Take An Aspirin For The Inevitable Headache You Are About To Get, Then Study Up On Your Vehicle Rental Insurance Material” section of our How Not To Fall For A Car Rental Scam blog post for the response(s) you need. For those of you who are looking for information specifically related to the act of declining part CDW mandatory insurance in favour of credit card insurance coverage, you’ve come to the right place.

COSTA RICA CAR RENTAL INSURANCE: WHAT IS “CDW INSURANCE” AND SHOULD YOU BUY IT?

Discussions around Costa Rica car rental insurance typically come down to a debate surrounding CDW insurance and whether travellers should buy it. In attempting to answer this question, let’s start by acknowledging a tip we noted in our How Not To Fall For A Car Rental Scam blog post that may have peaked the interest of some travellers:

Tip: If you plan to decline part insurance through your chosen vehicle rental agency (assuming this is possible and you have the proof to be able to do so), make sure you clearly understand the repercussions of this choice. Most travellers will jump at the opportunity to decline part insurance in order to save a few dollars per rental day (money can be maleficent!), however the decision could change other details pertaining to the rental, such as the rental agreement’s fine print (ie. the type and extent of insurance coverage provided), access to rental discounts, vehicle rental deposit amounts, required action(s) to be taken upon accident/theft, and/or the paperwork and process required to make a claim.

Let me ask you this: if we offered you one of two options, either A) a 10-day trip to Costa Rica for $1000 at a 5% discount, or B) a 10-day trip for $2000 at a 15% discount, which would you choose if you were trying to spend the least amount of money on a vacation? The answer is obvious, right? Despite the greater discount percentage provided via option B, option A is the least expensive trip overall. It’s a relief that you think so too, because we can only assume that the majority of travellers who consider declining part CDW insurance when renting a vehicle in Costa Rica disagree with our choice, given that most end up spending more money overall because they are swept off their feet by the appeal of a better deal. We cannot say that we blame such travellers though, as we maintain (as we have touched on throughout our related Costa Rica Car Rental blog posts) that the area of car rentals, within the greater realm of Costa Rica trip planning, is an ambiguous one that travellers best tread through lightly. Many car rental “deals” are as booby-trapped as a scene from Indiana Jones.

“We can only assume that the majority of travellers who consider declining part CDW insurance when renting a vehicle in Costa Rica disagree with our choice, given that most end up spending more money overall because they are swept off their feet by the appeal of a better deal.”
~ Nikki & Ricky,
Costa Rica Travel Blog

To cut to the chase, when it comes to Costa Rica vehicle rentals, what we also assume is that most travellers simply want to avoid getting scammed, in addition to saving money whenever and however they can. Plain and simple. What is our recommendation to accomplish this? Opt not to decline part CDW insurance if/when you choose to rent your vehicle here. Why? To avoid falling for deals offered by other companies similar to option B described in the example above. Just because an offer appears to be a good one doesn’t mean it can help you save more in the end.

COSTA RICA CAR RENTAL INSURANCE: IS IT CHEAPER OVERALL TO DECLINE PART CDW INSURANCE?

To answer this question, we will look at the Costa Rica car rental numbers as they help us prove our point. As we explain in our How Not To Fall For A Car Rental Scam blog post…

In Costa Rica (and according to our preferred vehicle rental agency), the portion of the CDW insurance that is “not mandatory” is mandatory in the sense that a renter must have it in order to rent a vehicle in the country, however it is not required to be purchased through a Costa Rican vehicle rental agency so long as the renter can show proof of coverage obtained elsewhere. For this reason, some will argue that the insurance is mandatory in the sense that an individual must have it in order to rent a vehicle (this is correct) although others will argue that its purchase is mandatory through a Costa Rican vehicle rental agency (this is incorrect). The portion of CDW insurance that is “not mandatory” is typically provided by travellers’ credit card insurance (most travellers have this insurance unknowingly) or else through other insurance coverage purchased from home. When travellers obtain a copy of proof of this insurance coverage from their insurance/credit card provider (usually in the form of a letter), and this proof is then presented to a vehicle rental agency in Costa Rica, the traveller can opt out of the portion of CDW insurance that is “not mandatory” (in effect, although the insurance is mandatory to have, it is not required to be purchased through the vehicle rental agency in Costa Rica as it has already been assumed elsewhere). When travellers elect to do so, only the remaining “mandatory” portion of the CDW insurance is required to be purchased in Costa Rica.

If we use our preferred vehicle rental agency’s BeGo 4X4 rental vehicle in this example (the least expensive 4X4 vehicle available in their fleet), the cost of CDW insurance (i.e., basic mandatory insurance) is $18.00 per rental day. As described above, this cost can be broken down into two parts: one part that is mandatory for purchase in Costa Rica ($12.00 per rental day) and the other part is mandatory to have upon renting, but can be assumed elsewhere (such as through credit card insurance coverage) so long as proof of such insurance coverage can be provided to the vehicle rental agency upon vehicle pick-up ($6.00 per rental day). If and when a traveller opts to decline part CDW insurance (the second part described above, if/when proof of CDW/zero deductable credit card insurance coverage can be provided), then the following vehicle rental agency policy rules apply (as written by our preferred vehicle rental agency):

  1. The amount for the deposit on hold will be double than normal (the deposit increases to $5000.00 from $750.00)
  2. You have to bring a document on headed paper from your credit card bank as a proof for insurance declination: coverage amount, type of vehicles, period of coverage, etc.
  3. You lose any special offer or discount so you have to pay regular price
  4. You have to pay for Supplemental Liability Insurance (Civil Responsibility)
  5. It is not possible to decline when renting Nissan Urvan or Frontier vehicles

Pay special attention to the third point above. When travellers opt to rent their vehicle here (as we recommend they do), if/when they decide to decline part CDW insurance they also forfeit their access to discounted vehicle rental rates. This pressures travellers into choosing one of two options: A) they can rent a vehicle for their trip at a discounted rental rate plus the cost of CDW insurance, or B) they can rent a vehicle for their trip at a regular (non-discounted) rental rate and decline part CDW insurance. If we asked you, once again, which option you would choose if you were trying to spend the least amount of money on a vacation, how would you respond? Would you want the option that appears to be the best deal or the option that provides you with the least expensive trip overall?

Getting back to the numbers that evidence our claims, assuming a traveller was to select a BeGo 4X4 rental vehicle for 7 days during Costa Rica’s high/dry/summer season, he or she could save $85.00 simply by choosing NOT to decline part CDW insurance. It’s purely mathematics.

Costa Rica car rental insurance example A: Opting for CDW insurance

Discounted 7-Day BeGo 4X4 Rental Vehicle High/Dry/Summer Season Rental Rate: $245.00
7-day CDW Insurance Cost ($18.00 per rental day): $126.00
7-day CDW Declined Savings ($6.00 per rental day): -$0.00
TOTAL RENTAL COST: $371.00

With this option the traveller chooses not to decline part CDW insurance (so both mandatory portions of CDW insurance are included with the vehicle rental reservation and no proof of insurance coverage from the credit card company is required to be provided) and in turn is able to access to discounted vehicle rental rates.

Costa Rica car rental insurance example B: Opting to decline part CDW insurance

Our Preferred Vehicle Rental Agency’s Regular 7-Day BeGo 4X4 Rental Vehicle High/Dry/Summer Season Rental Rate: $372.00
7-day CDW Insurance Cost ($18.00 per rental day): $126.00
7-day CDW Declined Savings ($6.00 per rental day): -$42.00
TOTAL RENTAL COST: $456.00

With this option the traveller declines part CDW insurance (paying only the portion that is required to be purchased in Costa Rica, while proof of the other portion will need to be obtained by the traveller’s credit card company and provided to the vehicle rental agency upon vehicle pick-up) and forfeits access to discounted vehicle rental rates.

Although there are some exceptions (sometimes with 1 or 2-day rentals and/or with non-4X4 vehicle rentals), in nearly every case the savings earned via discounted vehicle rental rates are greater than the savings earned from declining part CDW insurance.

COSTA RICA CAR RENTAL INSURANCE: WHY DECLINING CDW INSURANCE DOESN’T MAKE SENSE–FINANCIALLY OR OTHERWISE

Monetary advantage aside, opting to include CDW insurance (i.e., choosing not to decline part CDW insurance) with a Costa Rica car rental just makes more sense. Not only does it avoid the hassle of needing to obtain a document from your credit card provider confirming the details of your insurance coverage prior to travelling, but it provides two separate sources of rental protection (wouldn’t you prefer to have CDW insurance provided by both your credit card provider AND the vehicle rental agency if/when such double coverage is allowed, just in case?). If it is not costing you extra to obtain insurance coverage from two separate sources (and rather, if doing so is saving you more overall), why wouldn’t it be the best choice? Furthermore, opting to include CDW insurance allows renters to pay a much lower amount for the vehicle’s refundable rental deposit (in the case of our preferred vehicle rental agency, $750.00 as opposed to $5,000.00 when CDW insurance is declined as per rule #1 listed above). If you consider the lower amount of money to be paid upfront, the lower amount of money to be paid overall, and the added security of having CDW coverage via two different sources, the best choice is as clear as a clean, wiped windshield. If you’re running out of reasons to support how declining part CDW insurance with your Costa Rica vehicle rental would give you an advantage, we’re right there with you.

Of course, as with all aspects of Costa Rica vacation planning, whichever decisions, options, and choices are best for travellers are best for us. We would never want to persuade other travellers into doing and seeing what we think and feel is best simply because we say so, however we are here to help travellers navigate the in’s and out’s of informative, safe, and smart trip planning. When it comes to the issue of Costa Rica car rental insurance and CDW insurance specifically, we have had plenty of travellers thank us for our honesty just as we have had travellers hear our recommendations and intentionally chose otherwise. While opting to rent a vehicle with part CDW insurance declined is a bit like declining a hotel room upgrade available at a promotional rate (if you were offered a standard hotel room for $100.00 or a luxury suite for $80.00, could you justify paying more for less when you could pay less for more? What if we threw in the fact that the $100.00 standard room required a deposit more than 6 times the amount of the deposit required for the $80.00 luxury suite? Wouldn’t that just add to the ridiculousness of the question?) each traveller must decide for his or herself which trip items are the best for them, fine print, policy rules, and mathematical calculations included. After all, in true Costa Rica Travel Blog style, we’re all for dishing out trip planning autonomy. We just hope its ordered with a little extra attention, common sense, and deductive reasoning on the side. 😉

QUESTION TO COMMENT ON: When it comes to vehicle rental insurance, how do you justify paying more for less when you could pay less for more, or do you?

Pura vida!

Nikki and Ricky

DIY Costa Rica

Costa Rica tour discounts



1 thought on “Costa Rica Car Rentals: Credit Card Insurance Coverage And Declining Part CDW With Costa Rica Car Rental Insurance”

Have something to say or add to the discussion? Leave your comment below!