Car Rental Insurance Pitfalls

http://learningcenter.statefarm.com/auto/insurance/do-i-need-insurance-for-rental-cars/

If You have a personal auto policy:

Read your policies carefully or call your insurance agent to ask for
details of coverage. Many auto policies cover rentals with the same
type and amount of coverage on your personal vehicle. Also ask about
coverage for any administrative fees you may be responsible for, such
as loss of use (rental income not earned on a car while it is in the
repair shop).

If your policy does not cover rentals, has a high deductible, or does
not include collision coverage or sufficient comprehensive coverage,
you may wish to purchase additional coverage from the rental company.
Also, insurance is invaluable in foreign countries where you may be
responsible for paying for the damage in full before you leave the
country.

If You are renting a car in a foreign country:

Check your auto insurance policy for possible exclusions or
limitations on renting a car abroad. Also check for coverage that may
be offered by your credit card company or auto club.

If you are not sufficiently covered, you may wish to purchase
third-party travel insurance to cover your foreign rental, or the Loss
Damage Waiver from the agency. You will still be liable for any costs
resulting from vehicle damage that are not covered by the waiver.

Third party insurance is the legal minimum in all EU countries (and most other European countries). It covers you against any injury or damage to anyone else (other road users including pedestrians, other cars including their occupants, damage to buildings ....). This is nothing to do with hire cars, it applies to all motor vehicles.
As this is a legal requirement, without which you cannot legally drive a car on a public road, it is a given, which is why you cannot find a reference to it as an extra for car rentals.
By EU law, all vehicles must have 3rd party insurance valid in all EU countries.

But, that does not cover damage you do to yourself or to the hire car. If you do any damage to a hire car, anything from a paint scratch to a complete write-off, the car hire company is going to come after you for the cost of repairing their car. You avoid this by add-on insurance called "Collision Damage Waiver". This CDW can often be more than the actual rental cost. You don't have to have CDW, but if you don't and you damage the car, it can get very expensive.

This is the same as if you owned a car. You must legally have 3rd party insurance, but "fully comprehensive" insurance to cover damage to your own car is optional.

CDW will not cover injury to yourself. If you are not an EU/EEA resident you need medical cover, including worst-case medical repatriation.

Re Edgar's post: I am somewhat dubious as to whether a car hire company in Norway or France would accept a policy from a foreign insurance company in a foreign language as covering the local legal requirement for 3rd party cover. They already have a blanket policy. I think the link you posted is more approprite to 3rd world countries without legal minimum insurance requirements.

Thanks, Chris.

Chris has given you great information , I am mostly clocked right now in my room in Glasgow. I will add a quick thing or two . Avis and Hertz will offer at the counter all the insurance you need ( super CDW includes complete coverage - no deductible , theft , personal and third person liability , glass coverage nd so forth . You can screw around with various third party underwriters , but using the coverage from the renter buys you total peace of mind . It May cost more , but the no hassle component is worth it IMO . Consider that while the rental and the insurance are calculated separately , the money is going into the same pocket and adding the two makes up the actual cost of the rental . You can do better on the pricing using third party insurance , but you will then have to settle with the rental agency first rather than just walking away . Again , this is my opinion , and it works well for me . Also , if you are of a certain age , like us , rent from Avis via AARP , you will find much better rates , I did here in the UK .

Major credit cards (MC and Visa) often include insurance for damage to rental cars if you use the card to pay for the rental. This gives some peace of mind but involves a more complicated process after an accident.

In addition to MC and Visa, American Express also offers a very well priced insurance program for its cardholders.

The original post is an inquiry regarding third party liability, not collision/theft: "We want to make sure that we won't get sued in an accident by 3rd parties, so have been looking into liability insurances, to no avail...."

Chris' answer that the rental company is required have third party liability for the cars it rents seems to answer the question of who pays. What is not clear is the liability coverage cap. Does the third party liability cap at hundreds of thousands of Euro or millions of Euro? Presumably the rental company's third party liability would at least meet the minimum requirement of its country of business. In the states, some rental company's offer (push) supplemental liability insurance that increases the liability cap.

Credit card rental coverage does not cover liability but I am under the impression that my home/auto umbrella policy would provide additional third party liability coverage in the North America. I've never asked the question to my agent as to whether my umbrella coverage extend to Europe or other continents.

I don't know what the cap is for 3rd party damages.
But the most expensive 3rd party car insurance claim in the UK was £22 million, in 2001, and the insurance company paid. The driver fell asleep at the wheel, rolled down an embankment onto some railway tracks. Before he could phone the police, the car was hit by a high speed passenger train. The wreckage was then hit by a freight train coming in the other direction. Read the details here. I think you would be very unlucky to top that record.

Just came back from France and renting a car there. In France, liability insurance is mandatory and included in the cost of the rental. It does not cover personal injury to you or the passengers in the car with you. It will cover liability for other parties. The car rental company offered such coverage for an additional price.

As an additional note, Collision damage coverage does not include theft of the car, tire damage or damage to the windshield or mirrors. Coverage for this was also offered for additional cost.

I do not know about Norway.

Clarification - liability to cover the people in the car was what was offered at additional cost. Again, liability for other parties was included and mandatory in France.

We just wanted peace of mind regarding the car rental, which to us included theft insurance. We purchased coverage through a travel insurance company. We then declined the rental car company's insurance when picking up the car, having proof of insurance with us and the insurance company's phone number in case there was an issue. There wasn't an issue for us in this particular instance at the Marseille airport and Budget (I think). It ended up being less expensive than what we would have paid through the rental car company and provided more extensive coverage. Rick has an article somewhere on this site where he mentions several good travel insurance companies.

Looks like you have some good insurance info from previous posts, but I'd check out Economy Car Rentals. We used them twice in Greece in 2012 (once arranging the rental on-the-fly in Crete) and just this last spring in Italy, but they rent cars throughout Europe. Though it is likely somewhat different for France and Norway, we had good experiences each time. They have the best rates I could find, and, more importantly, their advertised prices include liability and LDW coverage (with, admittedly, a $1,500 - $2,000 deductible) and all taxes and various fees, of which there are a few in Italy. In Italy they arranged a one-way rental from Rome to Florence, sub-contracting to Avis, while in Greece it was a local rental company. We rented their cheaper, thus somewhat underpowered, models but everything went just fine (if you don't count my little excursion into the ZTL in Siena, but that was my own fault and a story for another posting). In both Athens and Crete the pick-up and drop off was a little convoluted, so you need to pay attention so you know where to return the car. But it was no worse than off-airport car rental places in the US.