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Just as it's imperative to carry automobile insurance for your own car, it's equally important to make sure cars you rent are covered. After all, you wouldn't want to be held financially liable for dings, scratches or major damage that might occur while a rental car is in your care.
Rental agencies often try to upsell their customers with expensive rental policies, but some credit cards include rental car insurance as one of their benefits just for being a cardholder. Although many credit cards have dropped this type of protection lately, some of the best travel rewards credit cards still offer it. Here's everything you need to know about how credit card car rental insurance works and how to choose the right credit card for your needs.
How Does Credit Card Car Rental Insurance Work?
Rental car insurance works a little differently from your personal insurance, and there are several types of insurance coverage that are important to understand.
Collision Damage Waiver
Your own car insurance policy, or one you purchase from a rental agency, might include things like personal accident insurance and liability coverage if you injure yourself or another person, or personal effects coverage in case your belongings are stolen. Credit card rental car coverage, on the other hand, typically only includes collision damage waiver or loss damage waiver coverage.
This type of coverage applies to damage to the rental vehicle, though credit card protection might extend to supplemental charges such as towing services and the cost of being without a car (loss of use).
Primary Versus Secondary Coverage
Cards may offer primary or secondary coverage—here's the difference.
- Primary coverage: Like it sounds, primary coverage means that you can make a claim directly to your credit card benefits administrator before trying to apply for aid from other sources, such as your homeowners or personal car insurance. That can come in handy since it means you won't have to meet your personal policy's deductible or risk your premium rising. Very few credit cards offer this type of protection, though.
- Secondary coverage: Far more common, this means that if you get into an accident with your rental car, you will need to exhaust other insurance policies you may carry before turning to your credit card benefits. One thing to note is that secondary coverage may reimburse you for any deductibles you would owe on another insurance policy due to a rental car claim.
Using Credit Card Car Rental Insurance
You might need to take several steps if you want to take advantage of your credit card's rental car coverage.
- Pay for the rental with the appropriate credit card. It might go without saying, but if you want your credit card's coverage to apply, you usually have to pay for the entire rental with it.
- Decline the agency's coverage. In most cases, you will also need to decline the rental agency's collision damage waiver coverage when you pick up your vehicle for your credit card's policy to kick in.
- Pay for damages upfront. The rental agency will usually charge your credit card for any damages, and then it will be up to you to file a claim with your issuer to reimburse you. Don't panic. If you are within your card's coverage conditions and able to provide all necessary documentation, chances are you will be reimbursed in a timely manner.
- Keep records. As with any travel arrangements, it's a good idea to keep all receipts and records associated with your rental, including anything that shows you paid for it with your credit card, as well as damage claims made by the agency. You will need to submit these to your card's benefits administrator.
- File your claim in time. Many credit card rental car policies require you to report damage or theft to the vehicle directly to the card company immediately, and then to follow up within a certain time frame—usually around 60 to 90 days—to file the claim itself. The benefits administrator might then ask for follow-up documentation, which you will also need to return within whatever time frame they specify.
It's important to know what type of coverage your credit card offers and just how much it will protect you; otherwise, you could end up paying for more than you think.
How to Choose the Right Credit Card for Car Rental Insurance
Before settling on a credit card to use for its car rental insurance, it's important to pin down a few details about what is and isn't covered.
Primary versus secondary: Of course, the most basic thing you'll need to know is whether your card comes with primary or secondary insurance. That will help you decide whether to use its protections, to purchase a policy from the rental agency, or to investigate your options through your other insurance alternatives, such as a homeowners or renters policy.
What is covered: Each credit card has its own terms and conditions for rental car coverage that might include the types of vehicles covered, maximum dollar amounts, and more.
What isn't covered: It's just as important to know what's not protected by your card's insurance. With the Capital One Venture Rewards Credit Card, for example, most private passenger vehicles, such as automobiles and minivans, are covered. But if you rent an RV or a fancy sports car, you might be out of luck. Likewise, only rentals of 15 days or under in your country of residence, and fewer than 31 days abroad, are covered. As with many other cards, the Capital One Venture Rewards Credit Card's auto collision damage waiver policy does not extend to damage caused by off-road driving or personal injuries, among other exclusions.
Business versus personal rentals: If you travel and rent cars frequently for work, you might want to consider a business credit card, such as the Capital One Spark Miles card, which offer primary coverage specifically on rentals made for work purposes.
Check your benefits guide: If in doubt about your specific credit card's auto rental protection, scour your card's benefits for the fine details. You can always call your card issuer and ask to speak to the benefits administrator, too.
Credit Cards That Offer Car Rental Insurance
Here are a few of the credit cards that offer car rental insurance.
Capital One Venture Rewards Credit Card
While not quite as comprehensive as the other options, you can still lean on this card's benefits to help you out in a pinch. Its annual fee is $95.
Car Rental Coverage: As a Visa Signature card, the Capital One Venture Rewards Credit Card extends secondary auto collision damage waiver coverage. It applies to physical damage and theft of the covered rental vehicle, loss of use, and towing charges to the nearest facility due to theft or damage. However, it won't cover longer rentals (coverage length is capped to 15 days in your home country and 31 days outside it), and excludes most expensive or exotic automobiles, among other restrictions.
Additional Ways Your Credit Card Can Protect You When You Travel
Rental car insurance is just one type of travel protection that might come as a benefit of your credit card. Here are some additional benefits you might explore:
Many travel rewards credit cards offer trip interruption and cancellation coverage in case you have to call off or cut short your trip due to covered reasons. Thanks to trip delay coverage, some will also reimburse you for incidentals such as overnight lodging and meals, or toiletries and clothing in the case of delayed or lost bags.
Certain credit cards offer various types of roadside assistance, with operators who will help you locate towing companies and even offer discounted rates on some services.
Your card might also include cellphone protection against theft or damage when you use it to pay your mobile phone bill (with plenty of stipulations, of course).
Take Advantage of Added Protection
Car rental insurance is one of the many valuable perks travel rewards credit cards can offer. Not only can it provide peace of mind (and financial security) in case something goes wrong during a trip, but it can also save you the hassle of having to contact your own personal car insurance and risk a premium hike.
When deciding which credit card to use for rental car bookings, go over its car rental insurance, ensure that it will apply to your booking, and understand any limitations or requirements you will need to meet in order to take advantage of it. Once you do, you can rest easy knowing that you will not be held responsible for damage or theft to a vehicle that you rent.
All information about the Capital One Spark Miles card has been collected independently by Experian and has not been reviewed or provided by the issuer of the card.