Exposed! The Truth About Spain Car Rental Insurance
Are you thinking of hiring a vehicle but you are not sure about Spain car rental insurance, how it works and what is the best option?
Here is the nitty-gritty of car hire insurance in Spain, with all the ins and outs, from the legally required Third-Party Liability to the all-encompassing Comprehensive Insurance.
Table of Contents
- 1 Your coverage options for rental cars in Spain
- 2 What kind of insurance do I need when hiring a car in Spain?
- 3 Insurance for an economy rental car in Spain
- 4 Conclusion
Your coverage options for rental cars in Spain
In this chapter, you will find a quick comparison table with everything you need to know about car insurance in Spain (very similar to most of the world):
|Damages to others
|Mandatory by law, basic protection
|Doesn’t cover damage to the car hire in Spain
|Collision Damage Waiver
|Damage to the rental car
|Varies based on excess
|Reduces financial liability for damages
|Often has an excess/deductible
|Full Insurance (Todo Riesgo)
|Covers most scenarios, peace of mind
|More expensive, may have exclusions
|Glass, tires, undercarriage, etc.
|Tailored coverage for specific risks
|Can increase overall rental cost
If you are already familiar with these insurance types, including all the pros and cons, I suggest jumping straight to the next section where you will find all the info about the car insurance you need when renting a vehicle in Spain with an example.
An important disclaimer of expertise before proceeding. Please, keep in mind that I am not an Insurance Professional, a Risk Management Expert or a Financial Advisor. I am just a traveller with 20+ years of experience in renting cars, taking road trips around the world and enjoying the local cultures.
Third-Party Liability – Mandatory when you hire a car in Spain
Third-Party Liability (TPL), or as it’s known in Spain, “Responsabilidad Civil Obligatoria” is the bare minimum insurance you must have by law to drive on Spanish roads.
It covers any damage you might cause to other vehicles, property, or individuals – but not a cent for you or your car.
Is it Mandatory?
Absolutely. Driving without at least this level of coverage is illegal in Spain and can result in hefty fines or even imprisonment.
- It’s the most budget-friendly option, making it accessible for everyone.
- It ensures you’re legally compliant, keeping you out of trouble with the law.
- It offers zero coverage for damages to your rental vehicle or personal injuries.
- If you’re at fault in an accident, you’ll have to pay for your own repairs and medical bills.
Imagine you’re driving through the beautiful landscapes of Andalucia and, unfortunately, you rear-end one car at a stoplight. Your Third-Party Liability insurance will cover the damages to the other car and any medical expenses for its occupants. However, you’ll be on your own when it comes to fixing your car or treating any injuries you might have.
So, while Third Party Liability is mandatory for legal driving in Spain, it’s worth considering if the minimal protection it offers is enough for your needs.
Collision Damage Waiver
Collision Damage Waiver (CDW) is a popular add-on that many drivers opt for in Spain.
Unlike the basic Third-Party Liability, the Damage Waiver extends your coverage to include damages to your own vehicle in the event of a car accident. It’s like an extra layer of insurance.
There is, however, a caveat. The Damage Waiver has typically an “excess” or “deductible“. This is the amount of money you will have to pay before the insurance kicks in, usually 500 to 4,000 Euros.
The amount depends on the policy, the type of car and the age at which you are renting the car, the younger the pricier.
Is it Mandatory?
It’s not a legal requirement, but most rental car companies might already add it to the quote or insist you take it once you are at the rental desk to pick up your vehicle. Alternatively, they may require to hold a hefty deposit on your credit card.
- It provides peace of mind, knowing that your vehicle is also protected, especially for big damages.
- It significantly reduces your financial liability in case your car gets damaged.
- It comes with a higher premium, so you’ll pay a higher daily rent
- The Damage Waiver comes with an “excess” or “deductible”, meaning you’ll still have to pay a certain amount out-of-pocket if you make a claim.
You’re exploring the lovely towns and villages of Costa del Sol, and you accidentally scrape the side of your rental car against a narrow passage. With CDW, the insurance will cover the repair costs (for instance €3,500), minus the excess fee, which could range from €500 to €4,000 depending on your policy.
This means that if your deductible is 2,000 Euros, then you will be out of pocket for 2,000 Euros and the insurance will pay the remaining 1,500 Euros.
Of course the smaller the excess the better, however, a smaller excess means usually a higher cost of insurance.
Although the Damage Waiver is a must in my opinion (it is usually included in the quote), most of the minor damages (scratches, dents, etc) cost less than the excess and you will be once again out-of-pocket.
Full Insurance (Todo Riesgo) or car hire excess insurance
Comprehensive Insurance, or “Todo Riesgo” as it’s known in Spain offers the most extensive coverage available. Not only does it include Third-Party Liability and Collision Damage Waiver, but it also covers theft, vandalism, and sometimes even roadside assistance and legal fees.
This is often called Car Hire Excess Insurance or Excess Insurance Policy because it covers also the “excess” or “deductible” of the CDW. In a few words, you will have a no-worries experience.
Is it Mandatory?
No, it’s not required by law, but it offers such a great peace of mind, especially considering how narrow can be the Spanish streets and parking areas.
You drive without the anxiety of the final check at the drop-off time when the hire companies look for new scratches, dents etc.
- It offers the highest level of coverage, giving you peace of mind in almost any scenario.
- Some policies even include perks like a courtesy car while yours is being repaired.
- It’s the most expensive type of insurance, so it might not be ideal for budget travellers.
Let’s say you’re parked in a charming square to visit and stay in Malaga, and you return to find your car has been broken into and your belongings stolen.
With Comprehensive Insurance, you’re covered for both the damages to your car and the stolen items (up to a certain limit). Plus, if you’ve opted for legal assistance, you’ll have help navigating any legal procedures.
Or, let’s assume you inadvertently bumped into another car with damages to both cars. The TPL will cover the other vehicle meanwhile your full insurance will cover yours, without any excess.
I personally love driving without anxiety and knowing that I am covered even for small scratches that can happen even when the car is parked, or for those situations I cannot control.
Just keep in mind that there is no insurance covering the interior of the car or a dirty vehicle.
Optional Add-ons when you rent a car in Spain
These are not standalone policies but enhancements, or additional insurance to your existing coverage. Popular choices include Roadside Assistance, Legal Assistance, and Travel Insurance Policy.
Is it Mandatory?
Not at all. These are entirely optional, but they can add a layer of comfort and security to your journey.
- Enhanced coverage means you’re prepared for a wider range of scenarios.
- Some add-ons like Roadside Assistance can be lifesavers in emergencies.
- These come at an additional cost over your base insurance premium.
- Not all add-ons may be useful for your specific travel needs, so choose wisely.
Imagine you’re driving around the sunny destinations of Tenerife, and your car suddenly breaks down. If you’ve opted for Roadside Assistance, help is just a phone call away. They’ll tow your car to the nearest garage and may even provide a replacement vehicle.
Whenever I have a trip, I usually take Travel Insurance, which covers also some basic legal assistance. I always suggest taking one, independently from renting a car. It covers a ton of things. Honestly, I never needed it but it’s one of those things you never need till you need it.
I find Roadside Assistance to be almost a must, to be honest with you. Especially if travelling in the countryside of Spain. The great thing is that most car rental companies nowadays include it in the quote.
What kind of insurance do I need when hiring a car in Spain?
Let’s see now how these insurances apply to Spain, from basic insurance to full protection, no questions asked.
For all of the examples below, I use screenshots from my favourite hiring website, DiscoverCars, which compares local and international companies providing the best available deals. You will notice that each provider has a rating. This is based on customer reviews, essentially an Airbnb of rental cars.
Other aggregator websites work in a similar way, although with a few differences that may be not as straightforward.
In saying that, any quote must include Third Part Liability, a mandatory insurance when renting a car in Spain. That’s the first thing I usually check, just to be double sure.
Most of the rentals, or at least the best rentals, have already CDW and Theft Protection in the quote. What differentiates the providers is the excess amount. The lower the better, of course.
Keep in mind that it’s not that unusual to scratch the car in Spain, something that typically costs 200-500 euros to fix. You will be out-of-pocket for the entire sum if you have CDW with an excess of 500 euros or more.
Based on my past experiences, it’s like tossing a coin. Sometimes I drop off the car without any damage, others I don’t even realize I have a small dent possibly done by someone else in a parking spot.
For this reason, I have decided to always take full insurance, especially since DiscoverCars started adding this option for just 7-8 Euros/day. That’s peanuts compared to what the rental companies usually charge (25-50 Euros/day).
Let’s get deeper with an example
Insurance for an economy rental car in Spain
I selected a car on DiscoverCars for a week-long reservation in late June. One of the providers offers a Compact car for around 16 euros/day which includes most of the insurance options, as you can see in the image below.
It’s also unlimited mileage, which is great. My next step is to check the Protection in the Rental Conditions (bottom left) to see the deductible/excess in the insurance policies.
The deductible is quite high at 1,500 Euros, however, with the full coverage insurance offered by DiscoverCars (at just 8 euros/day) I can get a full refund up to 3,000 euros which is more than needed.
Pay also attention that the deductible is also applied in case of theft.
I actually used Delpaso in the past and I had no issues. The only thing is that they tried to upsell their full rental car insurance which I declined. I call it “Full Insurance Scam” and most of the rental companies will often do that.
Essentially, a Spanish Designed full insurance is offered at the rental desk for 25-50 Euros/day. They mention that is so much better than any other on the market. As an incentive, they may not keep any deposit, and you do not need to worry about anything when you drop off the car. Leave the keys and bye-bye.
Based on my experience, the expensive provider insurance covers essentially the same things as the cheap DiscoverCars insurance (have a read to be sure), however, there is a difference in how you have to deal with the damage charge when you return the car.
With DiscoverCars, the process takes longer and it usually follows the below steps
- the car provider will charge you for the damage, up to the deductible. You will receive an invoice for that (ask for it in case they will not provide it)
- you claim a refund of the damage charge from DiscoverCars, providing the invoice(s)
- they review and approve compensation applications within 48 hours
I had once 2,000 Euros in damage and they compensated me in 2 weeks, so a bit longer than they claim, but they did it, which is the most important thing.
Third Party Liability Insurance and Damage Waiver Insurance are typically included in the car rental in Spain. I must say that also Theft Protection and Roadside Assistance are common free add-ons.
The main discrepancy between the quotes is the deductible, basically what you can possibly be out of pocket in case of damages and without full insurance. That is where the car hire companies in Spain differentiate.
An important tip here: always take photos of all the damages, scratches and dents both inside and outside the car that must be documented in the rental agreement. Keep also in mind that damages to the interior are rarely covered by any insurance. Do this at pickup and drop-off of the vehicle at the car rental desk. It takes 3 minutes but they are honestly well-invested.
Once again, an important disclaimer of expertise. Please note that I am not an insurance specialist or a financial advisor. My insights are based on over 20 years of personal experience in renting cars, embarking on road trips worldwide, and immersing myself in different cultures. My advice stems from my extensive travels, not professional expertise in insurance or finance.