What Your Credit Card Actually Covers When You Rent a Car

© AP Photo/David Goldman
© AP Photo/David Goldman

If you know the ins and outs, renting a car can be extremely inexpensive. It’s not uncommon to find rates for around $25 a day. But then before you drive away, you’re asked if you want to purchase supplemental insurance. Sometimes that insurance can cost as much as the rental itself.

There’s a lot of confusion when it comes to car rental insurance. One of the big questions is does your credit card really provide free coverage? And most of us are skeptical of the terms. And no one wants a little fender bender to turn their $25 a day car rental into a $1000 problem.

CardHub released the findings of their 2015 Credit Card Rental Car Insurance Study and it’s true you can get coverage through your credit card when you use it on your car rental purchase. All four major credit card networks (Visa, MasterCard, Discover, American Express) provide some type of complimentary car rental insurance. MasterCard is the only network that does not offer car rental insurance coverage on all of its cards.

Across the four major networks, there are some general eligibility rules. It is required that you charge the entire rental car purchase on the credit card. You must decline the supplemental liability insurance and collision damage waivers offered by the rental company. None of the four will provide coverage on the rental of exotic, expensive or antique cars, vans, trucks, pick-ups, motorcycles recreational or off-road vehicles. Country limitations are common so double check with your card provider before renting a car internationally.

What you should know about American Express..

If you have your choice of cards, you may want to put the car rental on your American Express. It received the highest cumulative score (90%) in the CardHub study, but there are still a few caveats. American Express is the only network not providing coverage on the rental of some SUVs including a Chevrolet Suburban or Tahoe, GMC Yukon, Ford Expedition, Lincoln Navigator, Toyota Land Cruiser, Lexus LX450, Range Rover, and full-sized Ford Bronco. Coverage lasts up to 30 days. File a claim by calling 1-800-338-1670 or filling out a form online.

What you should know about Discover..

Coverage lasts up to 31 days. There are country exclusions for Escape cards but no country exclusions for the rest of cards. It is the only one of the four networks that does not cover loss of use. Loss of use means the fees a car rental company can charge you when the car is in the shop and they are not able to rent it out. File a claim by calling 1-800-347-2683

What you should know about Visa..

Coverage lasts up to 15 days for rentals in your country of residence and up to 31 days outside your country of residence (except where country exclusions apply). Visa does not cover accidents on dirt and gravel roads. Damage to tires and rims are not covered. File a claim by calling 1-800-847-2911 or online.

What you should know about MasterCard..

Only World cards are eligible for coverage. Coverage lasts up to 15 days for World cards and up to 31 days for World Elite cards. MasterCard will only cover accidents on dirt and gravel roads if they are regularly maintained. Call 1-800-622-7747 to file a claim.

Your best bet is to make a few calls before relying on your credit card or personal auto insurance policy to cover you. Call your insurance company and ask them if you are covered. CardHub suggests renting a car of similar value as your own car to increase your odds that your existing coverage will suffice. Then call your credit card network and ask what limitations may apply to your particular rental.

Now that you’ve got the insurance covered, here are a few basic tips to save money on the rental itself:

• Qualify for a weekly discount rate. It could be worth it to rent the car for longer than you need in order to qualify for a weekly discount rate. Most rental companies start offering the weekly discount rate when you rent the car for a minimum of 5 days.

• Look for a lower, weekend leisure rate. Business travel accounts for a huge amount of business so if your rental includes a Saturday night, you may qualify for a lower weekend, leisure rate.

• Avoid one-way rentals. Most companies will let you return a car to any of their locations, but you’ll pay dearly. Drop the car off at the same place you rented from or risk doubling your bill.

• Ask about membership discounts. Ask about discounts when you are a member of a group like AAA, warehouse clubs, frequent flyer programs, or AARP.

• Pay in advance. Most rental companies will give you a discount when you pay in advance rather than at the time of pickup. Often though it’s non-refundable so make sure you are confident in your travel plans.

As always, check the specific terms for your type of card and read that fine print!

Written by Jeanette Pavini of MarketWatch

(Source: MarketWatch)

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