Compare credit cards to car rental coverage

Compare credit cards to car rental coverage

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When you approach the rental car office after a long fight or breakdown, the last thing you want to worry about is buying additional insurance.

You can skip it — and the daily fee — if your credit card offers rental coverage as one of its perks. But before you turn down this extra protection, find out what your policy includes. Understanding your credit card’s car rental insurance and how this feature works can help you make an informed decision before you get to the rental desk.

How does car rental coverage work?

When you rent a car, the rental company will offer you the option to purchase car insurance. This protection, known as a collision damage waiver or a loss damage waiver, can cost up to $45 per day. However, if you have a personal car insurance policy and a credit card that provides rental car coverage, paying for car rental insurance is often unnecessary.

Whether you decide to take advantage of your credit card rental coverage will depend on the type of coverage and its suitability for your personal auto insurance policy. Here are some terms you should understand about the benefits of renting a car for your credit card.

Does your credit card include car rental benefits?

To see if your credit card includes rental car benefits, log into your account online and look for the Benefits section. If you cannot find the information, call the phone number on the back of your card and speak with a customer service representative.

Keep in mind that credit card companies sometimes change the benefits that come with a particular card, so it’s a good idea to recheck the terms first.

Is your credit card coverage sufficient?

In general, credit card rental insurance alone is not enough. Secondary coverage, for example, only begins once you reach the maximum coverage for your personal auto policy. Even if your card offers basic coverage, most of them only cover collision and not liability. You will still need to rely on your personal policy or additional coverage from the rental agency if you do not have insurance.

Comparing the best credit cards with car rental coverage

Although many credit cards offer the benefits of car rental insurance, fewer offer basic coverage. Here is a look at some of the best credit cards with basic car rental insurance:

Important questions to ask your credit card issuer before renting a car

Make sure you understand when and how your credit card’s car rental benefits begin. Many card issuers will make this information available online, but you can also call the phone number on the back of your credit card to verify. You’ll want answers to these questions:

  • Is coverage primary or secondary? Find out if you’ll need to rely on your car insurance, if you have it, before credit card coverage takes effect.
  • How can I be sure I am covered? Your card may provide coverage, but that doesn’t mean you’re in the clear. Usually, you must pay the rent in full with the card that provides coverage, as well as refuse the rental agency collision or loss damage waiver. You must also be the principal renter of the vehicle.
  • What types of vehicles are covered? Some credit card rental agreements exclude certain types of vehicles, such as motorcycles, trucks, vans, and vintage or expensive cars. Additionally, coverage usually only applies to traditional rentals and not car-sharing services like Zipcar.
  • What is the duration of coverage? Rental protection usually lasts for 14 days, although some policies last for 30 days or more. If you are planning to take a long trip, you may need to rely on your insurance once your card benefits expire.
  • What countries do I cover? Some countries are excluded from international coverage. For example, Ireland, Israel and Jamaica are often excluded because local laws require drivers to purchase collision damage protection from a rental company.
  • What kind of accidents – and what are they not covered? Theft and physical damage to a rental car are the most common types of covered loss, but many will also carry the cost of towing and related fees. However, not nearly all credit card policies will pay for injuries or damages you cause to cars or other property due to an accident. If I’m wrong, you’ll need to rely on your car insurance to cover the liability, which may not be enough for a major accident.

    Additionally, credit card policies generally do not cover personal items stolen from a vehicle. Check your homeowners or renters insurance policy instead.

  • What if I don’t have car insurance? You will need to purchase basic liability coverage through the rental company.
  • What is the process for submitting a claim? In the event of theft or accident, filing a claim through your credit card rather than the rental company’s insurance will require additional work on your part. Understanding this process, including the types of documentation you’ll need, can prevent you from wasting time dealing with a claim during work or personal travel.

  • Who is my point of contact? Once a claim is initiated, you may need to handle the process through a third party and not the bank or rental agency. Get the correct contact information in the event of an accident.

What should you do if you have an accident?

In the event of an accident, follow the same steps as if you were in your own vehicle: make sure no one is injured, call first responders if necessary, share contact information and take photos of any damage. Contact your car rental company – keep the rental agreement on hand – to report the accident and find out how much coverage the company will cover. Next, contact your card issuer to find out about coverage of the remaining costs.

Although many card issuers require you to file a claim within 90 to 180 days, try to file a claim as well as a police report within 24 hours.

The process may seem tedious, but Grammoglia says you shouldn’t put off making the necessary claims. “Doing this as soon as possible knowing what is covered can help you avoid unexpected expenses in the future.”

How to choose the right car rental insurance card

When it comes to choosing a credit card with rental car coverage, consider your general needs. Generally, primary coverage is preferred, although secondary coverage can be equally beneficial if you already have an affordable and comprehensive personal car loan policy. Additionally, consider the following:

  • What is the interest rate? You don’t want to get a lot of interest if you carry a balance for the next month, so look for a card at a low rate.
  • Is there an annual fee? Sometimes the annual fee is worth it if the card offers valuable benefits, but you might prefer to stick with a fee-free card.
  • Can you earn rewards? Many credit cards allow you to earn points, miles, or cash back on your spending. If you need to spend the money anyway, you might as well get some.
  • What other perks are available? In addition to car rental insurance, find a card that offers features that fit your spending and lifestyle. For example, if you travel a lot, you may want to get a card that also offers free checked baggage or a credit for purchases on the plane.

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