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Do you have to pay car insurance in Costa Rica?

Every country has its own laws in terms of vehicle insurance which can vary from region to region. In Costa Rica, car rental insurance is compulsory that is governed by a state-owned body, INS (Instituto Nacional de Seguros) known in English as National Insurance Institute. Though the law requires insurance from this autonomous institution, it offers very poor coverage. In fact, the government body INS compel the customers to buy the liability insurances such as API, TPL, SLC, and SLI.

Fortunately, rental companies fill up this gap through their insurance policies that adequately provide coverage for the vehicles you rent within Costa Rica. The major car rental companies in which the cost depends on the agency and the car size require car renters to purchase optional insurances like CDW or LDW. Actually, the larger the car, the more expensive assurance you have to pay.

The visitors who want to benefit from additional protections should opt for optional insurances that combine with CDW and SLI. Therefore, the answer to the question above is affirmative. Similar to other countries in the world, the laws compel you to pay minimum insurance for all autos that you rent in Costa Rica.

Mandatory SLI, TPL, SLC, or API as required by law

pay car insurance in Costa Rica

Although car rental companies have grown like a weed, they almost offer the same insurance to their customers. As stated above, the laws in Costa Rica require the visitors who rent cars there to purchase insurance in TPL, API, SLI, and SLC. Regardless of the users’ credit card covers, liability insurance is compulsory in every car rental agency in this Spanish-speaking country.

In effect, these four insurances are interdependent and designed to complete any liability coverage that may be supplied by the car rental companies. The SLI or Supplemental Liability Insurance protects the insured against injuries and damages caused by a driver or third party.

As for the Additional Liability Insurance, in short ALI, this optional coverage resembles the SLI because it can be bought by rental firms. In fact, while driving the rental auto, you and other authorized individuals will benefit from additional financial protection if the accident causes injuries and damages someone else’s property.

Concerning Personal Accident Insurance or API, this insurance that only covers the driver or both the driver and passengers offers life and medical insurance. Finally, the obligatory Third Party Liability known as TPL is a sort of policy that covers the costs caused by damages and injuries of individuals.

What are CDW &LWD insurances in Costa Rica?

Mandatory SLI, TPL, SLC, or API as required by law

The adventure-minded travellers who want to rent vehicles in Costa Rica have to face a challenge with regard to car rental insurance there. In fact, other important insurances that you ought to consider before accepting the rental agreement are the Loss Damage Waiver (LDW) and Collision Damage Waiver (CDW).

These two insurances are created to cover damages made by vehicles like accidents and theft. With CDW, when your rental car is damaged caused by a crash, be sure that you won't need to pay because your insurance firm takes charge of the auto repair. As far as the LDW is concerned, this fusion of Theft Protection and CDW is applied when your rental auto is stolen during the rental period.

This means that not only will you be covered for car replacement but also the car repair is ensured by the insurance in case of an accident. It deserves to mention that the renters are in charge of all damages and losses if they are proven to make theft, negligence, and vandalism. 

Optional — Zero Liability

Optional — Zero Liability

Another recommended insurance but not compulsory in Costa Rica is the optional policy that includes full and zero-deductible insurance. When the extra policies like Full Coverage, Damage Supplement, Theft Insurance, and Vandalism Supplement are coupled with the mandatory insurances SLI and CDW, your liability is reduced to zero.

As already mentioned, liability insurance is a part of an insurance option that offers financial protection for drivers who injure other individuals or their property when operating a car. Having zero-deductible automobile insurance allows you to choose coverage options that won't oblige you to pay in advance for a covered claim.

Let’s take an example, when you have a covered claim for $1,000 in repair, you will be reimbursed this full amount of money. Nonetheless, your insurance firm will refund you $ 500 if you have collision insurance with a $500 deductible. We should keep in mind two points in this optional insurance, the first one is that this amount will apply whenever you file vehicle damage claims in an auto insurance deductible.

Secondly, a certain number of rental car agencies incorporate into the rental cost the cost of at least one type of insurance, while others confuse the types of insurance to change their announced prices. Other firms mix in their CDW or LDW coverage the government insurance. This leads to confusion and anger toward the customers who want to get the cheapest car rental price.


How much does car insurance cost in Costa Rica?

How much does car insurance cost in Costa Rica

When it comes to renting a car in other countries, the first thing that comes to mind is the cost of car insurance for minimum or full coverage. Insurance coverage is more complicated in Cost Rica than in powerful countries like the US. In addition, the major online travel booking sites there rarely include compulsory insurance resulting in a mess among the visitors. To clarify the confusion, here is the automobile car insurance cost in this country of Central America.

-    Obligatory SLC, API, TPL, or SLI
The price of this mandatory insurance ranges from 10 to 20 US$ a day, but it can vary, depending on the car you rent.

-    Optional Insurance CDW or LDW
If you want to reduce your liability for your rental auto, this insurance is a good option from which you have to pay up to US$ 40 per day. Nevertheless, this cost depends on the car rental agency and the car you choose.

-    Optional Insurance Zero Liability

Opting for these extra insurances is profitable since they lower your liability to zero when they meet certain conditions. Be sure that you can keep your auto insurance costs down with this extra policy because you have to pay a daily amount of 5 to 20 US$.

Is third-party insurance mandatory in Costa Rica?

Is third-party insurance mandatory in Costa Rica

The answer is yes. Law in Costa Rica requires third-party car insurance so you are not permitted to rent a car without having it. In contrast with first-party car insurance, the third party is the basic insurance designed to protect the third-party damages.

Evidently, the first-party car policy covers the car owner or renter whose name is registered in the car rental agency. Third-party insurance includes either SLI or TPL. However, you cannot buy them through local car companies. TPL is similar to SLI regarding the purpose as both offer coverage for damage and injury caused to other persons. In accordance with the legislation in this country, a loss damage waiver including theft protection is imperative in order to reduce the victim's financial liability in case of serious incidents.

Moreover, this third-party policy also covers damages to the person's property and associated repair costs. Hence, both the local drivers and car renters are legally required to get it otherwise, they are not allowed to drive. Both SLI and TPL cover the customers against harm caused by third party or drivers.

Does Costa Rica require liability insurance?

Does Costa Rica require liability insurance

In conformity with Costa Rican law, liability insurance is mandatory from the Government body INS which requires all drivers within the state to obtain it before using their cars. Liability insurance is the third-party liability policy that car rental customers can buy through their credit cards.

As already indicated, the mandatory liability doesn’t, however, cover the ensured rental auto at all, only damages to the third party and their property. Aside from the imperative liability coverage, those who want to travel to Costa Rica are required to buy extra collision insurance for their rental car coverage. Furthermore, in the Law of Transit by Land Public Roads and Road Safety, article 66, the limits of coverage of LIA policy are created. As a matter of fact, LIA is the compulsory civil liability encompassing all rates covered by the SOA. This SOA policy is established to cover any injury or death caused by a traffic accident, even if the driver is not responsible for this disaster. Another liability insurance that the car renter should buy is SLI insurance.

The law does not mandate this complementary civil liability so anybody that neglects this insurance is not in violation of the law. Nonetheless, major car rental companies like Jumbo Car suggest this insurance as it provides civil liability coverage.

Does my Geico insurance cover rental cars in Costa Rica?

Does my Geico insurance cover rental cars in Costa Rica

The Government Employees Insurance Company GEICO is one of the biggest auto insurance firms in the US. As it has existed since 1936, this American auto insurance provides sufficient coverage on the customers' insurance for a rental car. This private corporation’s insurance that covers both the primary auto and rental cars is trusted for its lucrative auto insurance policies.

The fact that Geico auto insurance supplied all the insured policy needs makes it the most recognized name. Obviously, Geico car insurance covers rental cars in the case of an accident provided that you live in the US. This means that Geico insurance doesn’t cover rental automobiles in other countries, including Costa Rica.

So, if you are traveling to this country, you are expected to buy supplemental insurance. Since this largest auto insurer doesn't spread its service even into Mexico, you have to choose other insurances when you rent autos in Costa Rica. All you just do is to fulfil your engagement in order to meet the insurance firm's requirement before being allowed to purchase your reliable insurance.

Does American express cover car rental insurance in Costa Rica?

Does American express cover car rental insurance in Costa Rica

The easiest option to buy car rental insurance is through credit cards or American Express, known as AmEx. In fact, when you want to rent a vehicle, you are required to supply all the necessary documents such as a valid form of identification, a valid driver’s license, and a credit card.  

After Visa and MasterCard, American Express is the most popular credit card that is accepted by the biggest industries like tourist areas, luxury hotels, car rental companies, and more. American Express has expanded its car rental insurance coverage to reputed destinations over the last five years, making it a leading credit card that is bundled with various perks.

Thus, to answer the question, the global payments firm American Express evidently covers car rental insurance in Costa Rica. It must be pointed out that some credit card firms have specifically banned Latin American car rentals. Therefore, auto renters must check with their credit card companies whether the rental auto agency accepts their credit cards or not. In the case of AmEx rental car insurance, although this renowned card issuer is available in Costa Rica, it does not cover cars rented in some countries like New Zealand, Italy, and Australia.