If you plan on exploring Costa Rica on your own or with a few friends, it’s alot more enjoyable to rent a car to get around. However, with car rental comes the responsibility of ensuring you have proper insurance coverage. In Costa Rica, car rental insurance is mandatory, and it’s essential to understand what it covers and what it doesn’t.
With numerous options available, it can be confusing to choose the right coverage. To make your trip stress-free and ensure you have peace of mind while driving in Costa Rica, it’s crucial to know what car rental insurance options are available and what they entail.
In order to clarify the car rental insurance options in Costa Rica, I have broken it down into sections so that you can better understand your options. Ready? Let’s get started
Is Car Rental Insurance Mandatory?
Car rental insurance is not technically mandatory in Costa Rica, but it is highly recommended. However, Costa Rica has a “strongly recommended” law that all visitors to the country must have liability insurance that covers damages or injuries that you may cause to third parties while operating a vehicle.
The roads in Costa Rica can be challenging and unpredictable, and it is a good idea to have insurance in case of an accident or other unexpected event.
The insurance will protect you from the high costs of repairs or replacement of the rental car, as well as liability in case of injury to others or damage to their property. It is important to note that your personal car insurance may not cover you while driving a rental car in Costa Rica, so it is best to check with your insurance provider before your trip.
It’s also a good idea to read the fine print of the rental company’s insurance policy and understand the coverage and exclusions.
What is the Car Rental Process Upon Arrival in Costa Rica
When you arrive in Costa Rica the Car agency will meet you on your scheduled day, time & location. (Hotel pick up drop off in San Jose area is free). Other areas available but there are fees for certain ones. Make sure to ask the car rental company to see what, if any, the price is.
If you choose to pick up your airport at the airport, then you will need to let them know the exact arrival information (airline, time and flight number). Then car company in Costa Rica will meet you there at arrival and take you to their office.
Once you meet with the car rental representative, they will ask for major credit card and valid drivers license both of which need to be in YOUR name! You MUST be 21 to rent!
You MUST have available credit for the deposit. They will then go over all the paperwork and insurance information with you. You will do the site inspection of the car and you will sign off on it.
On the last day of the rental you will bring back the car to the specified location on your car travel voucher provided to you.
There are NO Refunds for unused service. so if you need to return the car early you can do so but you will not be refunded those days.
What Insurance options will I be offered when Renting a Car in Costa Rica?
There is no specific type of car rental insurance that is required by law in Costa Rica. Rental car companies are not “”legally” required to provide insurance to customers, however, many companies will require you to purchase insurance as a condition of renting a vehicle.
That being said, Costa Rica has a “strongly recommended” law that all visitors to the country must have liability insurance that covers damages or injuries that you may cause to third parties while operating a vehicle. This coverage is often included in the car rental insurance policies offered by car rental companies.
It’s important to note that even if you have liability insurance from your personal auto insurance policy, it may not cover you while driving a rental car in Costa Rica. It is best to check with your insurance provider before your trip, and also read the fine print of the rental company’s insurance policy to understand the coverage and exclusions.
Optional Insurance called “CDW or SLDW”
In Costa Rica, car rental insurance that covers damages to the rental vehicle is typically called a Collision Damage Waiver (CDW). This type of insurance protects you from financial responsibility for damages to the rental car caused by an accident or collision.
The coverage may be subject to a deductible, meaning you will be responsible for paying a portion of the repair costs. Some rental companies may also refer to it as “Loss Damage Waiver” (LDW) or “Vehicle Damage Waiver” (VDW)
It’s important to note that coverage may vary from one rental company to another and it’s important to read the fine print and understand the coverage and exclusions. Some rental companies may offer different levels of coverage, such as “super CDW” which will have lower or no deductible.
It’s important to check the terms of the rental agreement and understand what is covered, and what is not covered, under the CDW.
This type of insurance may be replaced by your home auto insurance policy or credit card coverage.
Check with your credit card company or insurance company before you rent and get it in writing. Some credit card companies have exclusions specifically against Latin American rentals and some rental companies do not allow you to waive this insurance regardless of other coverage.
Optional Insurance with A Zero Deductible
In Costa Rica, some car rental companies may offer an optional zero deductible car rental insurance, also known as “Super CDW” or “Super Collision Damage Waiver.” This type of insurance covers damages to the rental vehicle without having a deductible.
That means that you will not have to pay any out-of-pocket expenses in case of an accident or collision. It is an optional insurance that is usually offered by rental companies as an upgrade to the standard Collision Damage Waiver (CDW) that includes a deductible.
The zero deductible insurance is a way to provide more coverage to customers and it usually comes with a higher cost than the standard CDW. It is important to note that this type of insurance may not always be available and it depends on the rental company’s policies.
It’s important to check the terms of the rental agreement and understand what is covered, and what is not covered, under the zero deductible insurance before making a decision. It’s also important to check if this type of coverage is included in your personal car insurance or if you have a credit card insurance that can cover it.
What are any Additional Car Rental Costs in Costa Rica?
When renting a car in Costa Rica, there are several additional costs that you may be required to pay, in addition to the base rental rate. These costs include:
As mentioned earlier, car rental insurance is highly recommended in Costa Rica, and many rental companies will require you to purchase insurance as a condition of renting a vehicle. This can include liability insurance, collision damage waiver (CDW), and theft protection.
Costa Rica charges a value-added tax (VAT) on all goods and services, including car rentals. This tax can be as high as 13%.
Rental cars are usually rented with a full tank of gas, and you will be responsible for returning the car with a full tank. If you don’t, you’ll be charged a refueling fee.
Additional Driver Fees
If you plan to have someone else drive the rental car, you may be required to pay an additional driver fee.
If you plan to drop off the rental car at a location different from where you picked it up, you may be charged a drop-off fee.
”Unless you purchase all of the above insurance or your credit card covers it, you are responsible for damage done by potholes, vandals, thieves, falling trees, high tide, army ants, spilled food, and any other imaginable occurrence other than a traffic accident involving another party.
Final parting words of advice: Never leave anything of value in the car!
Some rental companies might offer GPS rental as an option and it may cost you extra.
Airport Concourse Fee
There is extra airport concourse tax added to the cost of any car picked up at Juan Santamaria or Liberia.
The car companies all know this and will make arrangements to help you avoid it. If you arrive late and plan to stay in the area (do not drive at night), take a taxi to your hotel and have the car delivered the next morning (often free of charge and saves you a day of rental).
If you arrive early and want to get on the road, the car companies have off airport pickup locations a few minutes away.
Always try to park your car in a secure parking area or sometimes you may see people asking to watch your car for a couple hundred colones, if this occurs, I would recommend that you do it.
Important Information to Look at When Comparing Car Rental Rates
Does the Price Clearly explain the Insurance Options Available to You Before you Arrive?
They all should clearly explain the options available and show you a list of available options so you will clearly understand your choices before you get to Costa Rica.
This is sometimes glossed over and many people assume its like renting a car in the United States but its vastly different so make sure to ask.
Picking the Car Up at the Airport
Check to see if Costa Rica Car Rental price quoted by the car rental company includes the fee charged by the airport management for pickup (fee is on both rental price and insurance). If not, ask about it!
Does the Car Rental company guarantee a car type or does it say: “intermediate 4×4” or similar?
This usually means a sub class of 4×4 that we refuse to use do to the quality of these vehicles. You should know all these things in order to avoid any “surprises” at the outset of your trip.
Most vehicles have a standard transmission. Automatic transmissions can be requested for certain vehicles for free or sometimes a small additional fee if available. Infant car seats can also be requested for an additional charge.
Can I use a Credit Card for instead of Buying Car Rental Insurance?
In Costa Rica there is one insurance company, the government, (technically there are others) and they require all foreigners renting a car in Costa Rica to buy insurance. This is to avoid a tourist having an accident and later their credit card company denying coverage after the tourist has left Costa Rica.
Therefore there is mandatory insurance that all rentors must take when they arrive in Costa Rica. There is no credit card company, that I am aware of, that will cover this mandatory insurance.
Therefore, when comparing Costa Rica car rental prices make sure they clearly explain to you the insurance, car model, year of the car and any other fees you will need to pay when you arrive.
This will avoid any surprise car rental charges upon your arrival. Also most credit card companies explicitly EXCLUDE Costa Rica car rental for coverage and more specifically for 4×4 vehicles as well as for driving on unpaved roads.(In Costa Rica there are many).
Check with your credit card company about their car rental coverage policy for Costa Rica or look into travel insurance as occasionally this is less expensive.
Thanks for the tips.
Renting cars is about the most frustrating thing in Costa Rica. It feels like a scam, but with some additional info I think the challenges can be avoided. Here’s what I found.
TPL [aka Supplemental Liability Insurance (SLI)] – There is no way around this. It’s mandatory, regardless of what coverage your credit cards provide or other personal insurance you have. Most online rental agencies leave this number out of their prices, whether that’s Expedia or directly from the big rental car company site (Budget, Alamo, etc.). They’ll use some generalized version of ‘additional local charges may apply’.
I used Booking dot com (branded Rentalcars dot com) and rented from Avis because they included TPL in the final price. I had to dig into the details to determine that. If your contract includes TPL, bring a hard copy of the invoice that indicates such. The only way to find out what the TPL charge would be if they are not included, would be to contact the local office of whatever company you’ve rented from and get the rates.
CDW (Collision Damage Waiver) – No rental car companies include the CDW in the fees you see online. Your credit cards may have coverage to take care of the CDW the local agents say is mandatory, but you need to bring a hard copy letter from your credit card company stating that you have coverage. You may get away with providing the credit card company’s generic policy statement that says rental car insurance is included, but a letter is better. The letter should have the name of the credit card company on it. Local agents will tell you that one of the major credit card companies name’s has to be there because this is the only additional insurance they accept.
Please note, personal 3rd party liability insurance, which should give you the ability to decline all rental car coverage was not applicable. Even if your coverage is from a company like Chubb (the biggest insurance company in the world), they will not accept it. It needs to be from a credit card company. See above.
I watched a couple get dinged for $300 in unexpected charges at the time of rental. What an awful way to star a vacation.
Side note. Rent a 4×4. The roads here get rough sometimes, so if you’re going further than Tamarindo, like Nosara or Santa Teresa you might prefer something larger. You could get by with the cheapest 4x4s they offer (Begos, Terios), but going slightly larger to something like a Nissan X-Trail will make you more comfortable.