You have free credit card insurance but still get charged for CDW and theft insurance.

Jim Anderson (not his real name) returned to the U.S. from his European vacation to find a nasty surprise on his Mastercard bill. Avis in Holland had charged him 719 euros for collision and theft insurance. At an exchange rate of about 1.28 that's $920, almost as much as the cost of the car rental itself which was $965 for a compact car with automatic transmission for 19 days picked up in downtown Haarlem.

Since Mr. Anderson was covered under the CDW/Theft policy of his Mastercard, AND had declined an opportunity to buy CDW/theft from Gemut.com at about one-quarter of what he wound up being charged, it seems clear he did not want or need the additional insurance. He disputed the charge through his credit card company, and then called Gemut.com car rental department who requested written proof from Avis of his acceptance of the charge.

Avis promptly sent a copy of the contract signed by Mr. Anderson that enumerated the extra insurance charges. It was, however, in Dutch, a language Mr. Anderson does not speak or read. It is law in Europe that rental car contracts be written in the local language, though, as a courtesy, some companies provide copies in other languages. They are not required to do so and such copies have no legal standing. (European rental car operators quite logically point out that when they visit the U.S. they are required to sign rental car contracts in English.)

At the urging of Gemut.com and Auto Europe, Avis Europe refunded half of Mr. Anderson's money, but that was out of the goodness of their heart, as the law and the rental contract were fully on their side.

How does this happen and how can you avoid erroneous CDW/Theft charges?

Mr. Anderson is not alone. Thousands of North Americans vacationing in Europe last year were charged for auto rental insurance they didn't want or need. The question is, were they cheated or were these just misunderstandings? First, one must understand that car rental counter employees receive bonuses and commissions for selling collision and theft insurance. Along comes a jetlagged customer who is required to sign a contract written in a language he doesn't know and the elements would seem in place for a bit of fraud. On the other hand, since most Europeans purchase the optional insurance, rental agents are used to issuing contracts that include it. Consider also that car rental agents have limited English skills, are often young, inexperienced, and minimally trained, and one has a recipe for confusion and error.

Whether it's dishonesty or just a misunderstanding, vigilance is the watchword for those planning to rent a car in Europe. Here are our recommendations for insuring your European rental cars and for avoiding unwanted insurance charges:

Buy CDW/theft insurance or rely on a credit card?

Purchase insurance when you book the car prior to departure and you'll pay about $60 per week and up for CDW and theft insurance that carries deductibles from about $400 to $3000. Wait until you are at the car rental counter to buy and you'll pay from $10 to $25 per day, depending on the country, the car, and the rental company. Most rental companies sell a "super CDW" coverage that reduces the deductible to zero.

Most gold and platinum credit cards, plus the regular green American Express card, and Diner's Club, offer free CDW and theft coverage if you use their card to pay for the rental. They will reimburse you if there is damage to the car. Except for Diner's Club, credit card coverage is usually secondary to any other insurance coverage you may have. (It is unlikely that your U.S. car insurance will cover you for rentals in Europe.) Thus if you purchase insurance from the rental company you invalidate your credit card coverage (except for Diner's Club which offers primary coverage). Generally speaking, credit card coverage is not offered on cars rented in Italy, Ireland, Israel, Australia, and New Zealand. In those countries you must purchase CDW and theft insurance.

If you rely on a credit card for protection, and the rental car is damaged or stolen, in order to be reimbursed you will have to provide damage documents to the credit card company and notify them of the loss within a specified period of time, typically within a month.

Make sure you have CDW and theft coverage

Prior to your U.S. departure, contact your credit card company to find out if your card provides free rental car collision and theft insurance coverage in Europe.

For $19.95 per rental, American Express customers can purchase a policy that offers primary, zero deductible collision and theft coverage up to $75,000 on all rentals. The policy also includes personal property, medical expenses, plus accidental death and dismemberment coverage.

Another purchase option that offers better rates than those offered by car rental companies is Travel Guard's $9 per day CDW and Theft coverage. The deductible is $250. Other travel insurers have similar policies.

Overseas car rental brokers, such as Ireland-based Nova, offer rates that include CDW and theft, albeit with a large deductible or "excess." In order to reduce the deductible to zero they will sell you additional insurance. With such overseas companies there is also the problem of resolving, at long distance, post-rental issues such as billing errors and credit card overcharges.

At the rental car counter in Europe

If your rental includes CDW and theft insurance you don't have a problem (of course, you want to make sure you're not being charged for extras such as GPS, winter tires, pre-paid fuel, or anything else you thought was included in the quoted rental price).

However, if you plan to rely on coverage from a credit card or travel insurance company, you want to be certain you're not charged for expensive CDW and theft insurance by the car rental company.

First, tell the agent that you do not want or need any additional insurance, and that you are covered by your credit card. Prudent renters will carry a "Letter of Coverage" provided by their credit card company.

Unfortunately, you will be required to sign a rental contract in the local language - German, French, Italian, Spanish, etc. That is the law and, though it may do so as a courtesy, the rental company is not required to provide a copy in English (be sure to ask for one, however).

Complicating this process is the fact that several rental companies no longer obtain customer initials that indicate acceptance or rejection of additional services; just one signature on the bottom of the contract is required. This shows agreement to all terms of the contract, and that might include a charge for optional insurance. Though with scant knowledge of the local language it may be difficult to determine exactly the terms of the contract, you still should look it over and ask to be shown the parts that relate to CDW (most European rental companies use the term CDW) and theft insurance. (In German, you're looking for the word abgelehnt [declined]).

Customers booked through Gemut.com/Auto Europe have a safety net. If they suspect they are being incorrectly charged for CDW/theft they can call a toll-free-from-Europe number and request a note to that effect be placed in their booking record. Of course, the signed contract is the controlling legal document but in a post-rental dispute where you are claiming an unauthorized charge, that note in the record, made at the time of rental, may influence your credit card company.

In review:

• Use a credit card that provides free CDW and theft protection on car rental contracts of up to 30 days. (Note most Mastercards offer coverage on contracts up to 15 days. If you have a 16-day or longer rental, you have no coverage.
• Make it clear at the rental counter that you wish to decline the rental company's CDW and theft coverage. Show them the "Letter of Coverage" obtained from your credit card company.
• Ask for an English copy of your rental contract.
• Examine the foreign language rental contract carefully and ask the agent to point out the part that addresses the issue of CDW and theft insurance.
• When in doubt, ask for a supervisor or call the Gemut.com/Auto Europe toll-free-from-Europe help line (the number is on your voucher.

Book your rental car in Europe with Gemütlichkeit's travel department and get the best rates, personalized, knowledgeable service and our unique at-the-rental-counter safety net that ensures our customers get what they are promised. We book with all the major companies in more than 35 countries. If you have questions about rentals in Europe, or simply prefer to deal in-person, phone us at 800-521-6722.