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This series of posts is written by the Wandering US Expat, who’s lived in Australia and Panama. And applied for cards from there!
Don’t let living abroad stop you from getting miles and points bonuses from credit cards!
It’s no secret that US banks lead the world in promotional point bonuses for new customers. They give away lots of points to get a new customer in the hopes that you’ll remain, and spend, with them for years. Lots of non-US folks wish they could get access to the same deals!
But many US citizens and ex-permanent residents, known as expats, often wonder whether they can still get credit cards if they leave or have already left the US. Perhaps they’ve relocated for a job or have gone for an extended trip abroad. Some expats have left permanently to start a new life.
Are you or someone you know in this category?
Figures are hard to determine because the US does not track expats who are traveling or living abroad. But a recent report estimated the number to be living overseas at about 2 to 7 million. There are millions more who leave, or “visit” outside the US for months at a time all year round.
This series will help folks living outside the US have Big Travel with Small Money!
“Living or Working Overseas” Series Index
- Part 1 – You Can Still Get Lots of Cards!
- Part 2 – How to Setup a Bank Account While Overseas
- Part 3 – Establish, or Re-establish Credit While Overseas
- Part 4 – Mail Forwarding Services for the Overseas Expat
- Part 5 – Charge to Your US Cards, Transfer Foreign Currency to Pay Your Bills
- Part 6 – Car Rental Insurance Reductions – For US and Non-US Licensed Drivers
- Part 7 – Dual Citizens/Residents – Get Extra Points!
Which Rental Car Insurance Should You Use?
While living overseas you may want to rent a car. And there are ways to save money on the insurance!
You can read my post about car rental insurance but here I’ll discuss ways to reduce your rental insurance while abroad, whether you have a US driver’s license or 1 from another country.
Car rental insurance costs a lot more in the US and Canada compared to many places in the rest of the world.
While many US credit cards come with car insurance included, they may NOT always fully cover you in an accident. And none that I’ve seen cover you for 3rd party liability. So if you injure someone or damage property or another car, your credit card will NOT protect you from potentially huge financial claims.
Rental car companies operate on a very small margin and they try to increase their profits by selling you insurance.
For simplicity, you may choose to purchase the insurance offered at the counter. Because some folks would rather not deal with the hassles of “jumping through extra hoops” to save a few bucks. But there are more affordable options. Just be sure you understand the risks!
The Scary High Deductible
If you’re willing to consider a few extra steps, you may be able to save yourself hundreds of dollars on car rental insurance overseas.
Say you’re going to Australia and want to find the best way to save money on your car rental. You find a car for 4 days at $126. You consider whether to use your credit card insurance or the rental car insurance. But the rental car insurance costs anywhere from $112 to $160!
However, paying this large amount lowers your deductible in an accident from $3,360 to ~$300. Most folks are scared to death of a $3,360 deductible! So people often pay the extra fee for insurance.
But there are other options besides buying insurance at the counter or using your credit card’s insurance.
Companies That Specialize in Car Rental Insurance Deduction
There are several companies competing for your insurance dollars. We’ll cover a few here.
For folks who still have a US driver’s license and residency or citizenship status, you can buy car rental insurance from us.protectyourbubble.com
I have NOT used this company but they offer car rental car insurance for ~$8 per day, which is significantly cheaper than what you’ll pay from the rental car agency. The service says you are covered for up to $35,000 in physical damages and theft with no deductible.
The plan does not cover personal accident insurance. Many rental car agencies don’t cover this either unless you pay extra.
You can use the coverage worldwide as long as your destination is at least 100 miles from your home address.
Inexpensive insurance of any kind is always great when you avoid making a claim. But if you’re in an accident, that’s when you find out what your insurance is really worth! So do what’s comfortable for you.
ProtectYourBubble has a UK version for those with UK citizenship or residency.
This company specializes in reducing your deductible to very low or zero.
Outside of the US, the most basic insurance included in your rental car agreement has 3rd party liability (such as injuries to other people). It’s mandatory. But check with the rental agency or country you’ll be visiting. So if you have a car accident and hurt someone while overseas, the injured person can get medical care paid for as part of the insurance.
But outside the US there’s a HUGE deductible. It can be ~$2,000 to ~$3,000!
Protectyourbubble offers policies which cover you for the 1st $3,500 of the rental deductible. Generally this is the amount in Europe, Australia, and elsewhere, that would you be liable for in an accident. Even if you bumped a tree, the damages could reach over $3,500.
The insurance companies will try to get you to reduce your deductible down to $300 or lower by purchasing their optional additional insurance which can be $25 to $40 day or more.
Prices are very reasonable and could save you a lot instead of buying directly at the rental car agency itself.
But I’ve read some negative feedback in forums about Protectyourbubble. You never know what your insurance is worth until you have to make a claim! So know the risks and do what’s comfortable for you.
Worldwideinsure.com is similar to protectyourbubble, except the feedback I’ve read about them isn’t as negative. Their rates are sometimes lower than protectyourbubble.
These companies can save you lots of money on car insurance when covering yourself for emergencies. But I haven’t had to file a claim, so please consider that part of the process if you were to have an accident.
Other Points to Consider
When you pick up your rental car they may or may not decide to charge your credit card an amount as a pre-authorization. This could be thousands of dollars, depending on where you are and the rental car agency. This is so they are covered should you have an accident, because you’re not using their insurance.
But what happens if you have an accident? The rental car company MAY go ahead and charge your credit card!
This shouldn’t be a surprise, because you declined their insurance. But if you have all the necessary paperwork (make sure you have it all!) and send it immediately to the insurer, these companies pledge to handle claims promptly.
But you could still be out thousands of dollars while you wait for a resolution between your insurance provider and the rental car agency. It’s a risk, but it may be worth it to you for the big savings.
Using an alternate insurer instead of the 1 provided by the rental car company could save you hundreds of dollars per rental. But in the unlikely event of an accident, it could cost you more time and headaches. There are definite savings if the risk is worth it for you. But as always, do what’s comfortable for you.
In the next post of this series, I’ll explain how to get extra miles & points if you have more than 1 citizenship or residency.