Driving in CR is generally no big deal in most areas. However, there are some things to consider. First, it's impossible to treat most paved highways in Costa Rica as if you are driving on a U.S. highway. Most are two lanes with intermittent poor sections needing repair, and there are almost never shoulders on the roads. People will pass you when normally you would think there is no way anyone should be passing in these conditions. Even buses behave badly by our standards. Trust your instincts. Don't start driving the way most Costa Ricans do (Costa Ricans will be the first to admit this). Play it safe and don't get in a hurry. You will likely be driving about 40 mph on most paved roads. Budget your time accordingly. Also, avoid San Jose if at all possible. The airport is actually outside of San Jose, so if you're renting a car try to start with an itinerary that doesn't take you through the heaviest traffic going southeast from the airport.

Secondly, take a photocopy of your passport with you when you drive during the day. A copy is acceptable to law enforcement agencies. Keep your original passport in your hotel room in a safe place while driving on day trips. There are a few checkpoints that are set up on roads just to check tourists. These are local uniformed police just doing their job. I don't worry much about them anymore, but don't go out driving without a copy of your passport even on short day trips.

Thirdly, be very mindful of speed traps. Usually Costa Ricans are very good about flashing their lights and warning you of upcoming speed traps. Pay attention to that. There are frequently speed traps around Carara NP and along highway 1 the length of the Pacific coast. Do not to pay the police the cost of the ticket should they ask- that's essentially a bribe. I've done that myself, thinking all the while I would otherwise have to pay at a police station or a court. However, nearly all minor traffic tickets can be paid at any national bank or even at some car rental agencies when you return the car. You're under no obligation to pay any policeman. 

Fourth, road conditions are lousy at night. I generally don't drive when its dark unless it's a short hop to a restaurant. There are very few street lights, potholes are unpredictable, bridges are more unpredictable, and road lanes can end rather dramatically. Take a cab at night if possible. It's cheap and safe. If you're getting up before dawn to bird or going owling, don't hurry.

Shuttle Service - For someone seeking a short stay in Costa Rica, Costa Rica Gateways has a good shuttle service. For example, one could hire CRG and have them take you to Savegre Lodge for 3 days, pick you up, and then take you to La Selva for 3 days and return you to the airport at the end of the trip. Should a person be interested in this, it would require some advance notice. I have independently used both their shuttle and their guide service and can recommend both. 

If you are a Facebook user, I strongly recommend Toucan Maps on Facebook. They have comments on driving issues, road conditions, distances, and general information on accommodations, food, and things to do.

Collision and Liability Insurance on the Rental Car - All rental car companies in Costa Rica recommend adequate insurance when you rent the car. These companies are right to do so if you're American because many U.S. credit card companies and most U.S. insurance companies don't offer to pay on any accident outside the U.S. You should check with your own insurance and credit card companies before hand. Nearly all rental car companies suggest you to get the CDW  (collision damage waiver) insurance or some supplemental insurance which covers the rented vehicle even though that insurance is optional. Sometimes CDW is referred to as LDW (loss damage waiver).

In one of the great unspoken insurance mysteries, your MASTERCARD may have options about the CDW insurance even if your VISA card does not - even if both cards are issued from the same company. Our MASTERCARD automatically covers our CDW insurance in Costa Rica - usually saving us over $100 on the price of a rental car. We used our VISA card for years while renting a car before we realized this.

The PAI insurance (Personal Accident Insurance for accidental death and injury of passengers) is separate. So is supplemental insurance (SLC) for zero-deductible payments (there are way too many acronyms for insurance). Together, this insurance adds significantly to the cost of renting the car, and you're still not fully covered in some car damage cases. There may be a few ways of cutting a little bit off the cost, but I've not seen a particularly easy way of doing it.

The best possible method in my opinion is to pay for your car rental with a MasterCard or some other card that specifically covers your CDW insurance automatically. Then acquire "Trip Insurance" (discussed below) from a third party which adds a much wider umbrella of coverage and spills into your car insurance for personal accident coverage as well as theft. If you just did these two types of coverage - with an adequate credit card and third-party trip insurance - you would be getting much better-than-average car insurance for a total of maybe 8-10 dollars a day rather than 18-30 dollars a day. Even if you then added the rental car company's supplemental insurance for covering the other vehicle in an accident, your cost might still be less than buying just the CDW package from the rental car company. I should point out the rental car company won't like this. Sometimes their online forms tell you that you must have CDW or get some form of supplemental insurance. It's an important revenue stream for them.

Much of this self-study of ours was born-out over years (hat tip to my wife). If you really didn't want to think about such annoyances, just be ready to pony up at least $18 dollars a day to the rental car cost for minimum insurance.

Web sites on rental car insurance in Costa Rica:
http://costa-rica-guide.com/CarRentalInsurance.html
http://www.servicecarrental.com/insurances.htm

Trip Insurance - Trip insurance can be done over the Internet on your own. If you're going to drive in Costa Rica, you should consider it. We do this every year in case we have a serious accident in the car and have to be flown back. Collision insurance on your rental car won't cover that. Trip insurance will also cover theft on some items, and it will cover your expenses if your flight is cancelled or over 6 hours late - a growing problem. Most trip insurance will also eliminate the need for PAI insurance when you rent a car - a handy advantage that gives it real value. You can get trip insurance online, and it won't take 15 minutes.

We've had trip insurance pay off on two different occasions while traveling - a stolen laptop in Jamaica and a seriously delayed flight to Costa Rica. Trip insurance is not that expensive... pretty much the price of a good dinner at a restaurant. When it pays off, it's golden. We have used Access America for trip insurance, but I recommend Googling "trip insurance" and poking around.