“Kathleen, in your March 1 newsletter you listed several travel tips for Panama. Thanks for that, but I have a question about the #3 tip on renting a car. You and others all seem to feel that a four-wheel-drive is necessary if you are leaving Panama City. We have been in Panama three times and have traveled the country extensively and have yet to find a paved road in Panama that needs a 4WD, rainy season or dry. If you are going off into the bush, I would agree, but for most tourists, any car will get you there and back without problems.
“One other thing that people should know about renting a car in Panama is that you will be faced with a surprise when you arrive at the rental desk. All the rates shown online are for the car rental only. When you pick up the car you will be faced with insurance decisions. Most major credit cards provide free collision damage, which you can use with most agencies. You need to check with your specific card, however, to see what coverage it provides.
“I have two cards. One provides coverage up to 29 days, while the other covers you up to 48 days. Both require a one-day break before you can restart the coverage.
“The problem is in the liability insurance. This is the coverage that pays for the other guy’s damage in the event of an accident. It is illegal to drive in Panama without liability insurance. If you rent a car in the United States or Canada, this coverage is included in the rate you are quoted online, but, in Panama, you will be asked to pay US$12 or more per day to obtain US$25,000 in liability coverage.”
–Keith H., United States
“Kathleen, my husband and I are planning a trip to Panama to determine if it would be a place for us to retire. We would like to rent a car and travel to several cities, but we were told that insurance from international rental car companies can be very costly. Is there any way to avoid this?”
–Maria C., United States
Unfortunately, no, you can’t avoid the insurance. Panama requires you to purchase a minimum of insurance protection from the car rental company. The cost varies depending on the vehicle; the range is generally US$10 to US$20 per day.
Some rental agencies may try to talk you into additional insurances, insisting that they are required, as well. However, it’s only the minimum liability coverage that’s required by law.
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