Your own insurance usually comes first
Although many refer to the coverage that’s usually provided at the rental car counter as “insurance,” that’s not exactly what it is. The rental car company has insurance on the car. A waiver that states the rental company (and its insurance company) won’t pursue you financially in the event that the car is stolen or damaged is what they sell at the counter.
Since rental car insurance usually applies to their own auto insurance policy, many people are able to refuse it because it duplicates their current coverage. On its website, auto insurer State Farm states that “for most people traveling for personal reasons, paying extra for coverage from a car rental company is probably a waste of money.”
Most credit card coverage begins when your personal auto insurance pays, usually for theft or damage to the rental car. But that so-called secondary coverage can be valuable. The most significant benefit is that it might pay your $1,000 vehicle insurance deductible back.
Certain cards provide primary coverage for rental cars, which means your own insurance doesn’t need to be contacted in the event of a claim. (Jump ahead to our list of cards with primary coverage. ).
Where to look for information
Most of the major credit card networks, including Visa, Mastercard and American Express all offer some form of rental car coverage for cards on their networks. However, the coverage on any particular card can vary according to the bank that issued it, and even cards from the same issuer can have different levels of coverage.
It might be as easy as calling the number on the back of your credit card and inquiring of the issuer about your card’s rental coverage. You might also look through the “benefits guide” that your card issuer has provided. If you did not save the paperwork, search for it on the internet. ).
Enterprise Holdings, which is the parent company of the Enterprise, National, and Alamo rental brands, spokeswoman Lisa Martini says, “We recommend that customers know, before renting a car, what their credit cards cover and if it transfers to a rental vehicle.” “In particular, it might be best to find out about the coverages, what’s included, and any exclusions that may apply to rental cars. ”.
It’s worth a few minutes of investigation. You can save $280 on a rental during a two-week vacation if you can confidently refuse $20 per day of add-ons at the rental counter due to your credit card.
What to ask your credit card issuer
These are the questions you should have answered whether you’re speaking with your issuer over the phone or consulting your benefits guide.
Is rental car coverage primary or secondary?
Primary coverage is better, but few cards offer it. Primary coverage pays for damages after an accident, so you can avoid using your own auto insurance. This implies that you can prevent having to pay a deductible and possibly having your premiums increase. Most credit cards come with secondary coverage, which usually means your personal insurance pays the claim and your card reimburses your deductible and any additional expenses not covered by your policy.
How do I make sure coverage applies to my rental?
Usually, you have to decline the rental car company’s collision coverage and pay for the rental using the credit card that comes with the benefit. The rental agreement needs to include the driver’s name at the time of the collision.
What coverage is included?
The majority of credit card coverage is applicable to what is known as a loss damage waiver or collision damage waiver, which is usually the most costly coverage available at the rental counter. Cards typically cover a portion of administrative and towing costs as well. Numerous cards additionally provide coverage for loss of use, which entails paying the rental company for the time the vehicle is not in use while repairs are being made.
What isn’t covered?
Liability and injury issues, such as damage to property other than the rental car, people you injure, and associated lawsuits, are typically not covered. But many people have those coverages elsewhere. A minimum amount of liability insurance is required by rental car companies, and your personal liability coverage frequently applies. Theft or loss of personal items inside the vehicle is typically not covered either, although homeowners’ or renters’ insurance frequently covers that. The Insurance Institute states that although your personal health and auto insurance policies most likely do, credit card coverage does not cover ambulance or medical bills after a collision.
What vehicle rentals are excluded?
Most credit card companies don’t cover certain kinds of cars, like fancy or exotic cars, trucks, big vans, and motorcycles. For instance, Mastercard offers coverage for cars with nine seats or less. Credit card coverages usually cover rentals from conventional car rental companies, not peer-to-peer and car-sharing services like ZipCar. If you frequently utilize those services, make sure your card issuer knows that it is not covered.
How long will the rental be covered?
The credit card coverage period is usually limited. For instance, Visa typically covers rentals for a period of 15 days straight within your nation or 31 days outside of it. 31 days for all rentals is customary, though, if your coverage is primary.
What if I don’t have personal auto insurance?
Generally speaking, your card offers you an even bigger benefit: secondary coverage becomes primary for collision claims. Nonetheless, the Insurance Information Institute advises you to think about getting a non-owner liability policy if you frequently rent cars.
How does coverage vary for international rentals?
Rentals in some countries may be excluded. For instance, rentals in Israel, Jamaica, and Ireland are not covered by standard Visa and Mastercard coverage. American Express won’t cover in Italy, Australia and New Zealand. The good news is that, if your personal auto policy does not cover you outside of the United States, your secondary credit card coverage may take over as primary coverage automatically, with the exception of certain countries.
What is the procedure for filing a claim?
Ask your card issuer what documents you must submit. A copy of the rental company’s accident report, the rental agreement, a repair estimate, pictures, and, if applicable, a police report are a few examples. You could purchase coverage from the rental car company instead of filing claims if you think that would be less work and paperwork.
Cards with primary coverage
Some well-known general travel credit cards include the Capital One Venture X Rewards Credit Card, the Chase Sapphire Preferred® Card, and the Chase Sapphire Reserve®. Are you interested in credit cards with primary rental car coverage so you don’t have to use your personal auto insurance? Usually, you have to use a business card for business travel and a consumer card for personal travel in order to be eligible. The cards listed below are all good for maximum 31-day rentals.
Several credit cards, including some of the greatest travel credit cards, provide secondary rental car insurance.
American Express add-on coverage
American Express provides secondary rental car coverage on its cards but offers primary coverage for a separate fee through a program called Premium Car Rental Protection. It provides enhanced primary coverage, potentially for far less than you would pay at the car rental counter.
When you sign up for the program, your account will be automatically charged a one-time, fixed fee of approximately $20 to $25 for each rental car you use your American Express card for; this will replace the rental company’s daily fees (effective June 2021). That is far longer than the typical 15 or 31 days, for a maximum rental period of 42 days. Only when you rent using one of your AmEx cards will you be automatically charged. The state in which you reside can affect the costs and coverages.
But it doesn’t provide liability insurance, and it doesn’t apply to rentals in Australia, Ireland, Israel, Italy, Jamaica, or New Zealand.
It pays to know
If you have multiple credit cards that provide rental car insurance, it’s wise to research which one offers the best value. The next time you’re at the rental counter, you’ll know which card to pull out and which coverage options you can safely pass up.
This article was also published in part by The Associated Press.
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FAQ
Do credit cards cover insurance on rental cars?
The majority of credit cards provide their users with some kind of vehicle rental insurance. However the terms, conditions, and limitations of each card’s coverage differ. Additionally, some cards—like the majority issued by Discover—have no coverage whatsoever for rental cars.
Does Discover card cover rental car insurance?
WalletHub’s comparison of credit card issuers revealed that Chase Bank provided the best benefits for rental car insurance among the personal credit card issuers shown in the chart below. No coverage: Neither Discover nor Citi credit cards provide any kind of coverage for car rentals.
Does MasterCard include car rental insurance?
If a cardholder pays for a car rental with an eligible MasterCard, MasterCard offers a program called MasterRental that offers limited additional coverage. Certain MasterCard cardholder agreements include MasterRental, which comes with no extra upfront fees for the cardholder.
Read More :
https://www.nerdwallet.com/article/credit-cards/credit-card-rental-car-coverage
https://www.kiplinger.com/personal-finance/credit-cards/credit-cards-that-cover-rental-car-insurance