Most major credit cards offer rental car coverage, but when does it make sense to use it?
Foster City, CA – December 8, 2021 – When renting a car, consumers are usually offered supplemental insurance covering the rental period. In its new resource, CardRatings.com, a leading credit card comparison site, discusses when or if buying this extra coverage is necessary, and most importantly, when the lesser-known option of credit card rental car insurance could provide the best value: What Does Rental Car Insurance Cover?
“Certainly the boldly advertised credit card perks and rewards receive the most attention, but don’t underestimate the ‘fine print’ features’ power to save money and offer protection,” says Brooklyn Lowery, editorial director and credit card analyst for CardRatings.com. “Most major credit cards offer some form of auto rental insurance, which can make that sold by the rental agency an unnecessary expense.”
Drivers should understand three important terms related to car rental insurance:
- Primary insurance – For most, this would be the driver’s personal auto insurance
- Secondary insurance – If the primary insurance is exhausted, this kicks in. It can cover things like the deductible from primary insurance
- Collision damage waiver (CDW) – Also known as Loss Damage Waiver (LDW), this is what many rental agencies offer and covers only damages to the rental vehicle; it does not cover injuries or property damage apart from the rental vehicle
Most major credit card networks offer a form of auto rental insurance, but the specifics of coverage differ.
Ashlee Tilford, managing editor for CarInsurance.com, explains that “the coverage offered by car rental companies is considered primary because it doesn’t require that the driver have a separate personal car insurance policy.” In many cases, the driver of the rental car would be covered by primary or secondary insurance simply by paying for the rental with a credit card.
The CardRatings resource explores how this type of insurance works when using a credit card, and how drivers can be prepared to decide before they hit the rental car counter, avoiding confusion, uncertainty and impulse decisions.
“There are a variety of limitations and exclusions that exist when using a credit card for rental car coverage,” adds Lowery. “These include the types of cars that can be rented, road conditions, the length of the rental and the country where the rental takes place, among other exclusions.”
The article also offers a checklist for travelers before renting a car, as well as a “warning” to the uninsured. Hint: it’s not a great idea to be uninsured, and credit card coverage alone likely isn’t the best option in that instance.
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