Does My Credit Card Cover Rental Cars?

There is perhaps nothing worse than finding your rental car scratched or damaged while on travel. You step into a gas station for five minutes and return to find a huge dent in your bumper and the offending vehicle nowhere in sight. Now, you think back to when you picked that rental car up at the airport. Did they ask you to add collision damage waiver insurance to your rental? If they did, did you add it? Most people, not wanting the additional expense of the CDW, don’t add the insurance—but often that’s ok, because it is likely that this type of damage is covered by your credit card.

A collision can be a very expensive repair, especially if you have to pay it totally out of pocket. It’s the fear of paying for that repair yourself that drives about 40% of people to pay for the supplemental insurance when they rent a car, either every time or occasionally. Most people are simply unaware when it comes to whether or not their car insurance covers rentals, and almost no one knows that their credit card usually covers rental cars. While most people know about the other perks their credit card offers (like rewards or online payments), few are aware of this additional benefit.

Which Cards Cover Collisions?

Every card is going to offer you something slightly different. Visa has some of the most comprehensive coverage, as the majority of their cards cover theft, damage, towing, and other charges. There are limitations, of course. Visa won’t cover or reimburse you for instances of property damage, for costs incurred because of an injury, or for damage to other vehicles that you are liable for.

If you do have an insurance policy that covers rental cars, Visa will also cover your deductible, which means you still are unlikely to pay anything out of pocket, even if you do have insurance that is supposed to protect you. Discover, Chase, and United, and MasterCard all have similar programs, most of which are a good alternative to filing a claim with your auto insurance, which is likely to spike your monthly premiums.

If you have American Express, you probably will have to pay a small fee in order to access this benefit, which is definitely worth the expense if you are a frequent traveler, as it tops out at $25, which is much less than you’ve to pay to repair a rental car that has been damaged in a collision.

Are There Limitations?

Of course, any credit card that offers this kind of coverage does so under the stipulation that you refuse the collision damage waiver insurance when you pick up your rental car. This sounds easy enough, but if you’re standing at the desk, trying to rent a car and the clerk is being very pushy with the insurance, while a line of people stacks up behind you, it can be difficult to not relent and just pay for it.

Other limitations include what type of damage is actually covered. For most cards, only the damage done to your rental vehicle is covered. Any injury, whether to yourself or to people in the other car, is usually not covered. Though it may be covered by your own car’s insurance policy.

This same benefit will cover car theft, but won’t cover any personal items that are stolen along with the car. This means that you won’t be liable for the cost of replacing the car, but you won’t be reimbursed for the laptop, phone, and clothes that were in the car.

Some countries might also be excluded, including Ireland, New Zealand, Jamaica, and Israel. You would need to check with your credit card company in order to determine whether or not the country where you are traveling is covered by this benefit.

How Can I Minimize Liability?

Even if you are the world’s best driver, you can’t control what other people are doing on the road. Sometimes, a collision is unavoidable, and because the unexpected always happens at the very worst time, it is possible that the first time you ever get into a car accident might be while traveling. Luckily, there are a few things that you can do to minimize your liability.

1. Ask your credit card company about this perk. Not every credit company offers a perk like this, and it is not available on every type of card that company might offer. Before simply assuming you have it, make sure.
2. Check with your auto insurance to see if rentals are covered. Credit card coverage and auto insurance (if you have it) will often work together to minimize your costs.
3. Rent a car that is similar to the car you own. This increases the likelihood that it will be covered.

If your credit card offers this perk, either as a free service with your card or for an additional fee, it can be hugely beneficial to those that travel, whether infrequently or regularly!