Does Your Credit Card Insure a Rental Car?

Most credit cards come with an insurance plan for rental car loss and damage. Your rental car insurance benefits through your credit card come only secondarily to your primary personal auto insurance. Depending on the type of coverage, any expenses your personal auto insurance doesn’t cover may be covered by your credit card insurance. Coverage can vary from one credit card to another, so before you add insurance on your rental car, you should determine what benefits you can get from your credit card.

Rental Car Insurance: What’s Covered, What’s Not

Rental car agencies offer four main types of insurance. Here are your rental car insurance options and how you may already be covered between your personal auto insurance and your credit card:  

  • Collision damage waiver (CDW)–This provides protection against accidents and theft. Your credit card may include some level of CDW; however, coverage will come into effect only after your primary personal auto insurance has kicked in.
  • Liability coverage–Your personal auto insurance should have liability coverage. Credit cards will not provide this.
  • Personal effects coverage–You may already be covered under your homeowner’s or renter’s insurance policy. This insurance protects you against theft of personal items that are stolen from the rental car. Credit cards don’t usually cover this.
  • Personal injury protection–Covers the cost of medical expenses for you and your passengers if you get into an accident.

Your credit card will not cover this; however, your health insurance as well as your personal auto insurance will cover you.

Your credit card rental car insurance coverage for CDW includes the replacement of a stolen vehicle, damage repairs and any necessary towing fees; it provides this coverage secondarily to coverage from your personal auto insurance policy.

Common Terms and Conditions

Some credit card companies offer rental car insurance benefits at no additional charge to their cardholders, while other credit cards may offer them only to cardholders with better credit. If you do have these benefits on your card, you must secure your rental car insurance coverage by

  • paying in full with the same credit card that is also insuring the rental,
  • declining the rental company’s collision damage waiver and
  • being the primary driver, even though additional drivers may be authorized to drive.

Under the credit card insurance plan, the rental will usually be covered for up to 30 days. Your credit card will probably not cover exotic cars, campers, pickup trucks or cargo vans. In addition, your credit card may not provide coverage in certain countries. If it is determined that damage or theft was caused due to drunk driving, off-roading or leaving car doors unlocked, your insurance contract becomes null and void. 

Beware of the Hidden Fees

Rental car agencies have come up with a few additional fees that your credit card will likely not cover. Most credit card companies state they cover for loss of use, a fee charged for each day the car is in the shop and inoperable. Coverage, however, requires a log documenting the days the car was not in use. Rental car agencies will not provide these logs. Additional fees that are not covered include administrative processing fees and a diminished value fee, designed to cover the vehicle’s loss in value due to damage.

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