When you use a credit card to rent a car, should you purchase separate auto insurance? Often, the rental company will make a persuasive argument for all the reasons why you should get additional coverage. Just as often, you may not have to spend the extra money, especially if you use a credit card.
Those who rent cars frequently usually have a pretty good idea of the pitfalls involved in dealing with pushy rental car personnel who try to confuse and convince less knowledgeable renters into buying coverage they may not need. That’s why it pays to be aware of some of the unknown rules regarding rental insurance coverage.
There are several ways your rental car can be insured. And, you definitely want to check your own policy to make certain you’re not duplicating coverage you already have that would, in all likelihood, pay for damages to the rental car should you cause or be involved in an accident.
One of the most common ways to cover the rental car for damage is to initial all the little spots the representatives points to, accepting to take their offer to insure their car with their optional coverage. While these policies are typically cheap and available right there on the spot, they can add up significantly if you hold on to the car for a week or longer. And, again…you may not even need them.
Since you undoubtedly already have liability insurance on your own vehicle, you’re generally covered when you drive another car, including a rental car. On the other hand, collision damage may be a completely different issue…and, may not be covered.
However, some credit cards will pay your deductible when used to rent a car and you happen to be involved in an accident, which your liability insurance or rental contract covers. Keep in mind that all credit cards are not the same and the deductibles may not be covered. Check the card you plan on using before assuming you’re covered. It’s also good to know that other cards may offer primary or secondary coverage beyond what your personal auto insurance policy covers.
Below are some examples of credit cards that offer their cardholders various stages of coverage when renting a car.
• American Express
AMEX cardholders, all except the Delta Options card, are provided with “secondary” coverage. In other words, the card will pay for whatever damages your insurance company doesn’t pay. An optional fee of $24.95 per rental is charged for “primary” coverage, meaning the card will cover the entire amount of damages so no claim has to be filed with your insurance company.
AMEX covers a rental car for up to 30 days, but contains exclusions of various types of claims, in addition to restricting coverage in Australia, New Zealand, Ireland, Israel, Jamaica, and Italy. For smaller business cards, the coverage is limited to the U.S. only. Another benefit to using the American Express card is that it also offers towing fees and storage reimbursement as well as “loss of use” coverage.
• Master Card
With Master Card, you can have secondary coverage up to $50,000 if you’re a Gold, Platinum, World, and World Elite cardholder. Pickup trucks, recreational vehicles, and any vehicle with a retail price over $50,000 are excluded. As with AMEX, the card covers towing and loss of use. Except for the World and World Elite cards, insurance coverage is excluded in Ireland, Israel, and Jamaica.
• Discover Card
Discover Cards, with the exception of student cards, offer secondary coverage up to $25,000. Unlike the AMEX and Master Card, while Discover doesn’t cover towing, it places no location limitations on coverage. Rental cars are covered up to 31 days, however, the coverage can be extended to 45 days if the rental is used for business.
• Visa Card
All Visa Cards offer secondary coverage for up to the actual cash value of the rental car. Coverage ranges from 15 to 31 days depending on country of usage. The card does cover reasonable towing fees and loss of use, but excludes the countries of Ireland, Jamaica, and Israel.
• Diners Club
If you’re looking for the most comprehensive rental coverage of any credit card, Diners Card is the card. It offers primary coverage up to $100,000 for Carte Blanche and $75,000 for other cards. But, trucks, some SUVs, and RVs are excluded. The coverage is good for 45 days of rental, and includes towing and loss of use. Diners Card has no coverage for Jamaica, Australia, Ireland, Italy, Israel or New Zealand.
When renting a car, you want as much information as possible. Don’t let the unknown cause you to spend money on insurance coverage you don’t need. Visit your card’s website or contact customer service and ask what particular coverage your card offers.
Also, don’t let the unknown have you assume you’re getting the best rate on your auto insurance. Why not get a free auto insurance quote today?
Have you ever rented a car and found out after purchasing the added insurance that you didn’t need it? Feel free to share your thoughts in the comments section below.