Renting a Car in Portugal: Is Extra Coverage Worth It? Find Out Here!

Update on May 23, 2025

Planning a trip and looking into Portugal car hire options? If you’re wondering whether to get extra insurance when renting a car, you’re not alone. In this complete guide, you'll find everything you need to make an informed decision and rent a car in Portugal with confidence.

Discover what’s already included in your car rental and when it might be worth adding extra protection.

Is basic insurance included in a car rental?

Yes. Most car hire companies in Portugal include a basic level of coverage in their rental contracts, usually consisting of:

• Third-Party Liability Insurance – covers damage to others;
  
• CDW (Collision Damage Waiver) – limits your financial liability for damage to the vehicle;
  
• TP (Theft Protection) – covers vehicle theft (in some contracts).

However, these basic policies often come with a high excess, which means you may still need to cover part of the damage costs in case of an accident or theft.

What Is the excess in a car rental?

The excess is the maximum amount you're responsible for paying if something goes wrong. Think of it as a deposit to protect the car hire company.

Example: If the excess is €500 and the damage totals €2,000, you pay €500 and the insurance covers the rest.

What is additional coverage in a car hire?

Additional coverage includes optional insurance that reduces or removes your financial liability. It can protect you from costs related to:

• Damage to the rental vehicle;
  
• Theft;
  
• Medical expenses;
  
• Roadside assistance.
  

In Portugal, car rental companies offer various types of extra coverage, each with different levels of protection and cost.

Tip: the Portuguese Consumer Protection Agency provides guidance on renting a car in Portugal, including your rights and best practices in the industry.

What types of additional coverage can I add to my car rental?

Extra coverage in car rental contracts may include protection against vehicle damage, theft, as well as personal coverage and roadside assistance.

Here are the main options.

Vehicle damage protection

CDW (Collision Damage Waiver)

This reduces the amount you have to pay if the rental car is damaged. It’s usually included in the car rental price, but:

It typically does not cover windows, tyres, or the underside of the vehicle.

Super CDW / Zero Excess

Removes the excess (deductible) entirely. If the car is damaged (non-negligent), you won’t pay anything extra.

ER (Excess Reduction)

Cuts the excess in half (or more), giving you better financial protection for a smaller upfront cost.

WDW (Windows Damage Waiver)

Covers damage to windows and windscreens, which basic insurance often excludes.

Theft Protection

TP (Theft Protection)

Covers theft of the rental car. A police report is usually required. However, a high excess may still apply depending on the car category.

Personal Cover and Roadside Assistance

RAP (Road Assistance Premium)

Provides extended roadside help – lost keys, wrong fuel, lock damage, interior damage, clutch problems, etc.

PAI (Personal Accident Insurance)

Covers medical expenses for the driver and passengers – and even death – in case of an accident.

Do you really need extra coverage when renting a car?

It depends. Additional insurance can be a smart option when there’s higher risk or when you simply want extra peace of mind.

What are the benefits of additional coverage?

The benefits of adding extra coverage when renting a car in Portugal include:

• Reduce or eliminate out-of-pocket costs in case of damage;
  
• Enjoy your trip with fewer worries;
  
• Get protection for less common issues (lost keys, burnt clutch, etc.).

When to consider extra coverage:

• Type of trip: long journeys or unfamiliar roads;
• Rental duration: the longer the rental, the higher the chance of issues;
• Car category: luxury vehicles or SUVs often come with higher excess;
• Driving conditions: mountain roads, rural areas, or heavy traffic zones can increase the likelihood of damage.

Should you add extra insurance? How to decide

Think about your travel needs and driving habits. Here’s what to consider when deciding on extra coverage for car hire in Portugal:

• Road type and destination: urban traffic or remote rural roads?
• Existing coverage: some credit cards or travel insurance may include protection (usually with reimbursement after the fact);
• Rental duration: longer rentals carry more risk;
• Driving profile and vehicle: if you're not used to the type of car or haven’t driven much recently, more coverage can help.

Frequently asked questions about car rental coverage in Portugal

What’s included in the basic coverage?

Usually: third-party liability, CDW, and sometimes Theft Protection. Tyres, windows, and the underbody are typically excluded.

Is extra insurance mandatory?

No. But it’s highly recommended if you want more security or are driving in riskier conditions.

Is Super CDW / Zero Excess worth it?

Yes. It’s ideal if you want to avoid paying anything in the event of covered damage.

Does my credit card insurance cover car rentals?

Possibly, but you’ll often need to pay upfront and claim the costs later from the insurer or bank.

Should You get extra coverage when renting a car in Portugal?

Extra coverage isn’t mandatory, but it can be a wise investment depending on your travel plans and vehicle type.

At Drivalia, we help tailor your rental to suit your needs. Rent a car in Portugal with the right protection and drive with confidence.

Explore our car rental options and choose the perfect coverage (for a stress-free journey.