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Understanding Credit Card Car Rental Coverage

Credit Card Rental Car InsuranceConsumers often disregard many of the benefits that come with carrying a credit card. One protection that should be pursued by anyone who has ever needed to rent a car is the free rental car collision protection provided by the major credit card networks. Odds are that one of the credit cards in your wallet already provides all the insurance coverage you need when you rent a car, saving you as much as $20 per day. No matter how often you rent a car, whether for business, leisure or as temporary transportation while your own vehicle is being repaired, the loss may be substantial if you neglect to consider this benefit.

The four major credit card networks offer many of the same features with their rental protection benefits. They all require the cardholder to refuse the rental company’s collision-damage waiver (CDW) — a critical move, since purchasing the waver will negate the credit card benefit. Accepting the rental company’s insurance isn’t a supplement to the coverage offered by your credit card — it replaces it. In addition, if collision coverage is included, it will be considered secondary to any other insurance coverage you may have. American Express, however, allows cardholders to pay a fee for primary coverage if they choose.

In other aspects, the rental coverage offered by the major credit card networks varies depending on the way each program is designed. For instance, the majority of cards offer collision protection, but there are a few standard credit cards that do not. With the difference in the cost of using a card with or without coverage negligible, consumers should make it a priority to choose (or switch to a credit card) that offers protection.

Be Aware of Exclusions in Coverage

Some of these variables may seem incidental but could be the difference between being protected by the additional insurance coverage and not:

Vehicle Exclusions – This is a factor in all insurance programs, with exotic cars, trucks, motorcycles, RVs and large vans excluded from coverage. American Express also includes in their list of exclusions large SUVs like the Range Rover and Land Cruiser. The terms and conditions of each agreement are different, so be sure to read the fine print to determine what’s covered and what’s not.

Destination Exclusions – This is one area that overseas travelers need to pay particular attention. The only network that allows unrestricted coverage is Discover with some limited provisions overseas. Visa and MasterCard exclude coverage for rentals in Ireland, Jamaica and Israel. American Express, on the other hand, has an interesting list of excluded countries: New Zealand, Jamaica, Israel, Australia, Italy and Ireland.

Limitations on Length of Rental – Here is another reason to read the fine print of your credit card agreement before heading off on your travels. Coverage limitations include the length of the rental agreement. Take a month long trip and you’ll be covered by Discover and American Express, while MasterCard and Visa have lower limits of 15 consecutive days. Visa, however, does allow 31 days for cardholders who visit another country.

Catchy Exclusions – One policy restriction that must be followed for the coverage to be enforced is that the driver must be listed on the contract or the agreement is void. Less known exclusions include the type of road you were on when an accident occurs. Off-road excursions are excluded by MasterCard, Visa and American Express but are not noted in the Discover contract. American Express and Discover cover accidents on unpaved but publicly maintained roads; Visa does not. MasterCard excludes unpaved roads and even paved roads that are not regularly maintained—a real potential gotcha.

Check with your credit card company to see if you’re covered and read all of the fine print. To activate coverage, complete the entire rental transaction with your eligible credit card and decline the collision damage waiver (CDW) coverage, if offered by the rental company. Never allow an unauthorized driver to take the wheel and stick to the main highways, as much as possible.

Insurance Program Details:

American Express:

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rates, and fees may change without notice. Please visit the referenced website for up-to-date information since program terms may change without notice to us or our visitors. In some cases we may receive compensation for financial products or services mentioned on this website. All opinions and views expressed are soley those of the authors.