Does Your Credit Card Cover Rental Car Damage?

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It’s been a few years since I’ve actually used a rental car. But the last time I did use a rental car, I paid the extra $15 a day the company was charging for insurance to cover the car if it was damaged. I’ve never damaged a rental car, but I figure that the one time I don’t get insurance, something unexpected will happen. So I’ve always paid for insurance on a rental car. Until now. Next time I rent a car, I am going to save money on my trip by declining the rental company’s insurance.

Over the weekend, I received a communication from one of my credit card issuers. I like to read these notices, since you never know what’s in them. This particular notice was a benefit guide for my Visa, detailing how I can take advantage of an auto rental collision damage waiver that comes with my credit card. Apparently, my credit card issuer provides rental car insurance at no extra charge to me — as long as I handle the rental transaction using this particular credit card. (This is one of the benefits that can come with using a credit card rather than a debit card in some cases.)

Saving Money on Car Rental Insurance

It is also worth noting that many auto insurance policies will also cover damage to rental cars that you are driving (mine does not, although it offers an allowance for when my car is being repaired). In those cases, your credit card issuer may reimburse you for the deductible you pay when your auto insurance covers the damage. If your insurance doesn’t cover rental car damage, there is a good chance that at least one of your credit cards will.

When you rent a car, you will be asked whether you want to buy insurance for an extra daily fee. If your credit card offers rental car insurance, make sure to decline. You will probably have to sign paperwork stating that you decline the rental company’s collision damage option. In order to get coverage by your credit card issuer, you will have to be on record as declining the rental company’s insurance. Also, you will only be eligible for what (if anything) your own auto insurance policy covers.

Before you rent a car, make sure you know what benefits you have. Read through your auto insurance policy, or call your agent, to find out whether rental car damage is covered. Next, read through materials from your credit card company, or call the customer service number provided, to find out the terms of rental insurance coverage from your issuer. There is a good chance that you don’t need to pay the car rental company for insurance — you are probably already covered!

Thinking back, I am pretty certain that I have been paying for rental car insurance coverage without needing to. I’ve been giving extra money (money that could have been used for more fun things while on vacation) to rental car companies. Before you spend the money on rental car insurance, double check your policies. You want to save all you can.