If you have a credit card, you likely get a few benefits with it. Some include insurance for rental cars. While this is a nice additional benefit to have, it's important for drivers to know that credit card-provided insurance isn't meant to completely replace the rental car insurance that you can get when picking up or placing an order for a rental car. Here's the inside scoop on credit card rental insurance, including where it succeeds and where it fails.
What Credit Card Rental Insurance Typically Covers
While all credit cards offer different types of car insurance for rental cars, there are four types of insurance that they typically offer:
• additional liability,
• collision damage waiver,
• personal accident, and
• personal effects protection.
This is not to say that these are the only types of coverage offered, but these are the most common. In most cases, however, insurance offered by credit card companies only replaces the collision damage waiver. Even then, there are some restrictions and limitations that drivers should fully understand.
Collision Damage Waiver
The collision damage waiver or loss damage waiver protects you from damage done to the rental vehicle. For example, if you run into something and damage the rental car, the collision damage waiver would protect you from having to pay for the damage out of your pocket. This is important because any damage done to a rental car while you're driving it is your responsibility.
Does Credit Card Auto Insurance Cover This?
The short answer is sometimes. It really depends on your credit card policy. Most of the time, however, the collision damage waiver offered by credit card companies is considered secondary insurance. This simply means that your primary car insurance company has to cover the damages first. If there's any remaining balance, your credit card company steps in. While this is nice, it means that you're forced to file a claim on your insurance, which could increase its cost.
Always Read the Fine Print
Before choosing to buy rental insurance, it's important to read the fine print of your credit card company's rental car insurance policy. It stands to reason that you have to buy the rental car with the credit card have access to the benefits. However, you should also look to see what vehicles are included under the policy. For example, some credit card companies won't insure antique automobiles. Others have a thing against insuring vans. Reading the fine print can prevent you from being surprised later.