If you want to purchase insurance from the rental company, it will most likely be called loss damage waiver, or LDW (also known as collision damage waiver, or CDW). Many consumer protection organizations complain that LDW is expensive (especially because it often provides coverage that you already have) and has many loopholes. That means that the company can charge you for certain damage even if you've bought LDW. For example, bodily injuries or damage that was caused intentionally or recklessly are usually not covered.

• License. Most countries will accept your valid state driver's license with another form of photo ID. Some countries may also require an International Driver's Permit (available through AAA offices). What you need may depend on the length of your stay; a two-week trip is different from a year abroad.
  
  
• Insurance. Your personal automobile insurance policy may have restrictions or limitations on driving in foreign countries. Check your coverage, including the terms of your credit card policy, before you rent in a foreign country.
  
  
• Legal trouble. In some countries, the police will take your license if you are involved in an accident or stopped for a moving violation, and they won't return it until you have paid a fine. Get receipts for all payments you make, and report any mistreatment or apparent scams to the American embassy or consulate in that country.
  
  
• Traffic tickets. Certain European countries track traffic violations with street cameras that photograph cars at intersections. The police trace the car, using the license plate number, and request payment for the ticket from the rental car company. The rental car company is within its rights to collect the fine from you, even if the company is informed of the violation after you have returned and paid for the car.

For more information about renting and driving a car in Europe, see Auto Rental Europe: A Guide to Choosing and Driving a Rental Car in Europe, by Bill Meier (Creative Arts Book Co.).