When we analyze travel rewards credit cards here, we tend to focus on the most visible benefits they offer, including top welcome bonuses or earning rates across different categories of merchants. However, the less tangible benefits on these cards can save you significant time and money when things go wrong, including having your baggage delayed on a trip or if you have an accident or need emergency evacuation while traveling. An often overlooked perk of many cards is car rental coverage if you’re in an accident or have your rental vehicle stolen or otherwise damaged. Today I want to highlight popular credit cards that offer primary car rental coverage to give you peace of mind the next time you hit the road.
For many people, in particular, urban dwellers and Millennials, owning your own car is not a realistic or necessary option. Therefore, the convenience and adventure of a personal car come through a rental. Renting a card is easier than ever, with a great range of options, pricing and even combinations with car-sharing services. And then there are, of course, the travelers, who rent cars on trips. However, there is always the question of the fine print. When you get the counter and the salesperson asks “Would you like to include insurance with your rental?”, people can often have a knee-jerk reaction. If you’re like me, my risk-averse personality automatically opts for ‘Yes, please!’. For others, who are more budget conscious or confident, the automatic response is ‘No, thanks.’ Insurance for a vehicle is an important decision that may have upfront and future costs. By choosing the right credit card and knowing your policy, you could save hundreds of dollars in insurance fees or claims payments.
Here are some basic facts that apply to all credit cards with car rental insurance:
To use a credit card’s rental car insurance, you must pay for the rental using your card (coupons are OK). And while most credit cards’ rental car insurance policies aren’t valid when you redeem points or miles for your rental, some cards, such as The Platinum Card® from American Express, offer insurance on rentals paid for with its rewards program.
The coverage offered by credit cards will have many restrictions, which can include the types of vehicles covered, the countries where you can rent a vehicle, the duration of the rental, and the types of losses covered. Therefore, it makes sense to look through the details of your credit card’s policy before renting.
Coverage may be primary or secondary. Secondary coverage requires you to file a claim with your personal insurance, if any, before you receive any benefit.
The credit card’s insurance is always void when you violate any term of the rental car agreement, such as commercial use, driving on unpaved roads, or allowing an unauthorized person to drive.
Next, take a look at the territorial restrictions of the coverage, as many policies exclude cars rented at popular tourist destinations such as Italy, Ireland, Israel, Jamaica, and New Zealand. I’ve never been able to figure out why these particular countries tend to get excluded, even though you’ll have no problem receiving coverage in other countries that are far riskier.
You’ll also want to look at what kind of cars are excluded and the limits of the coverage. While all coverage will exclude some antique and exotic cars that you rarely see offered as rentals anyway, some will exclude common luxury cars and even pickup trucks, which are frequently available from major car rental companies.
Finally, you’ll need to examine the other rates, fees, and benefits of your card. For example, those who rent cars outside of the United States will want to avoid the 3% foreign transaction fee that many cards impose. Additionally, some credit cards even offer elite status with rental car companies as a benefit.
Call your insurance company to see if rentals are covered under your standard policy. Older policies may not offer this coverage.
Call your credit card company to ask if any limitations apply to your card’s coverage, relative to your rental plans.
Double-check with long-term rentals. They might not be covered by your auto insurance policy, due to time limits.
Decide whether to mix business with pleasure. Your personal auto policy – if it even covers rentals – only applies when the vehicle is used for personal use. So if you’re traveling for business check what other options are available for you.
Get a rental like your everyday ride. Your personal auto insurance is more likely to cover your rental if you get a vehicle of similar value to your own car.
Ask about adding an insurance rider (for a small fee) if your policy doesn’t cover a certain type of rental car.
Consider a non-owner auto insurance policy if you don’t have a car but drive from time to time.
Make a plan before you hit the rental counter. You may want to accept a rental company’s liability insurance and collision damage waiver if you don’t have personal auto insurance and your credit card won’t give you enough coverage. In any case, you want to make an informed decision, not one based on panic at check-out.
We provide free but advertising supported comparsion service for different credit cards, the offers that appear on this site are from third party advertisers from which we receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). We do not guarantee to offer all financial services companies or products on this website.