Credit Card Rental Car Insurance

Rental Car Insurance Offers

When you rent a car, you are responsible for:

• Any damage to the car during your rental
• The loss of the car during your rental, even if it is stolen
• Any loss of use by the rental company: the lost rental revenue while a damaged car is out of service

Most states require liability insurance when you rent a car in case you injure another person in an accident. The coverage can come from your personal car insurance policy, the credit card you are using to rent the car or from a liability insurance supplement (LIS) offered by the rental car company. LIS coverage costs about $10.00 a day.

The rental car companies may also try to sell you:

• Collision Damage Waiver (CDW) – CDW guarantees that you will not have to pay for the rental car if it is damaged or stolen and you won't be charged for any loss of use fees. It doesn't cover damage you do to another car or the loss or theft of your belongings. CDW costs about $20.00 a day.
• Personal Accident Insurance (PAI) – This provides a one-time payment for you or a passenger in case of death or maiming from an accident in the rental car.
• Personal Effects Coverage (PEC) – This coverage pays you if something is lost or stolen from the rental car.

Credit Card Rental Car Insurance Policies

Be sure you understand the terms of your credit card rental car insurance coverage. Call the 800 number on the back of the card and ask about the coverage that comes with your card. Check if there are any restrictions or exclusions (SUVs and luxury cars may not be covered). Ask for the coverage information in writing; you can request a fax of the information if you need the information immediately.

Same Cards, Different Coverage

Two people can carry the same credit card, issued from the same bank, and be eligible for different rental car insurance benefits:

• Visa cards – Auto Rental CDW reimburses you for damage or theft to a rental vehicle as well as valid administrative, loss of use charges and reasonable towing charges. This coverage is on all Visa credit cards, regardless of which bank issued the card.
• American Express cards – You are probably covered for theft or damage to your rental car. American_Express_Travel_Insurance coverage only pays what your car insurance does not pay. American Express offers an optional Premium Car Rental Protection that provides primary CDW, Accidental Death and Dismemberment (AD&D) and secondary medical and personal property insurance. There is no cost to enroll, but your card is charged about $20.00 every time you rent a car with the card.
• Diners Club cards – The CDW is for unlimited primary collision coverage in the United States. If you rent a lot of cars each year, you might want to consider applying for a Diners Club card. The $95.00 annual fee could end up being less expensive than paying for the extra CDW for four or more car rentals during the year.
• MasterCard Gold and Platinum cards – Not all MasterCard credit cards have rental car insurance. It is up to the bank that issued the card. If it does, it probably covers CDW and loss of use.

What's Usually Covered

Credit cards:

• Often provide collision and theft protection at no extra cost when you use the credit card to rent the car
• May also cover loss of use and towing charges

Usually the credit card issuer will require you to decline the CDW/LDW coverage options offered by the car rental company in order for the credit card-provided insurance to be in force.

What's Usually Not Covered

Rental car insurance provided on your credit card will usually will not cover:

• Bodily injury
• Property damage
• Theft of your personal belongings

Some cards only offer coverage if you rent your car from a certain rental car company or limit the day for which coverage is effective. With some cards you may be required to enroll in a special program. Your credit card coverage might be invalidated if you purchase additional collision insurance from the rental car company.

Coverage from Your Personal Car Insurance

Most car insurance policies extend coverage to rental cars. Be sure you totally understand the extent of your coverage. For example:

• The coverage will be paid after you have met the deductible on your policy.
• Your personal car insurance may not be in force if the rental car is used for business or if the rental car is driven by someone who is not covered on your personal car insurance.
• The policy may or may not cover you for loss of use fees.
• Be sure your car insurance policy includes enough coverage to cover the value of the car that you rent. If you only have coverage on your car which is valued at $10,000, you will not be covered if you total a $35,000 rental car.

If your personal car insurance does cover rental cars and you still purchase insurance from the rental car company, the rental car insurance is considered "excess." This means that:

• You would have to pay your deductible for collision coverage; your personal car insurance carrier would pay the remainder.
• For any non-collision damages, your personal car insurance policy would pay out first.
• Any damages over the limits of your personal policy would be covered by the rental car company.

Other Insurance Sources for Rental Car Claims

• Check with your insurance company to see if your homeowner's or renter's insurance covers any theft of your belongings from a rental car.
• Travel insurance often includes rental car insurance as a benefit. Be sure to read the policy carefully to understand the details of your coverage.

Bottom Line

• You may not need the car rental insurance. Your car insurance will probably provide liability and comprehensive coverage and your credit card will probably provide collision coverage for the rental car.
• Make sure that you understand the coverage on your personal auto insurance and your credit card.
• If you don't know the details of your rental car coverage from your credit cards or your personal car insurance policies, you should consider paying the additional $25.00 to $30.00 for the coverage offered by the rental car company.