The answers could save you thousands of dollars
Credit Card companies are pretty savvy about offering extra benefits to their customers. And that’s great for the holders of the 488 million Mastercard, Visa, and American Express credit cardholders across the US.
One of the most popular benefits is rental car insurance. American Express, for example, offers it as standard on nearly all of its different cards.
You may already know you have this insurance. You may not know if your card includes it – in which case it’s worth checking. But whichever category you fall into, it really pays to see exactly what kind of coverage you’re getting with your card. The small print could end up costing you hundreds, if not thousands, of dollars.
Activating your credit card coverage
Credit cards with rental car insurance benefits often require you to activate the credit card before you can rely on it for coverage. This is normally quite simple… American Express requires that you pay for the entire rental car bill using your American Express card. Nearly all credit cards that offer insurance also insist that you decline the collision damage waiver at the rental car counter. Which makes sense – as long as the card insurance includes it.
What are the limits of typical credit card coverage?
It’s not much fun going through small print, but it can really pay. Ask your credit card company for a copy before you book your rental car. Here is what to watch out for once you’ve got the policy terms and conditions in hand:
1. Secondary Insurance
This is probably the most important difference between many credit card rental car insurance plans and a dedicated policy from Protect Your Bubble. American Express and many other card companies only offer secondary insurance, often referred to as “excess insurance”. That means if you make a claim their coverage only kicks in AFTER you've claimed on any other primary policies – such as your own auto insurance. The knock on effects could really hurt. You may have to pay a big deductible depending on your own policy and your personal auto insurance premium could increase next year.
2. Policy Limitations
When we think about rental car insurance we want to know we’re covered and the vehicle is covered.
With most rental car insurance provided by credit card companies only you, the car’s occupants and the car are covered. No other vehicles or people make the cut. So, if you’re at fault and others make a claim against you it will, once again, be against your own auto insurance policy, not the credit card policy.
Most insurance policies – credit card or not - have financial limits on them for the amount you can claim. For example American Express’ standard rental insurance benefit has the following limits:
You have to decide whether you’re comfortable with the level of coverage provided by your credit card’s rental car insurance benefit.
Watch out for these too. You can’t assume that all kinds of vehicles are covered in every country you might visit. In fact most credit card rental car insurance policies exclude a range of vehicles. American Express Coverage excludes trucks, full sized SUVs, and exotic vehicles. And they won’t insure rental cars in Australia, Ireland, Israel, Italy, Jamaica, and New Zealand.
Administration costs are one more type of exclusion to keep on your radar. Many rental car companies tack on a fee for admin and loss of use if you damage one of their vehicles. Rental car insurance benefits that come with your credit card often times exclude coverage for costs related to administration and loss of use.
To sum it all up...
Rental Car Insurance included with your credit card can be a useful benefit – as far as it goes. But, don't forget that you have other rental car insurance options available - like rental car insurance from Protect Your Bubble. It costs just $7.99 per day to get reliable coverage for the cost of repairs if your rental car is damaged or stolen.
Coverage is only available to US residents.
Please review plan specifics carefully. Limitations and exclusions apply. For more information please review the Description of Coverage/Policy by State by clicking on “View Sample Plan”.This coverage is not available to residents of Texas or Montana. Rental car insurance covers the rental car only and does not cover any bodily injury, liability or damage caused to any vehicles, structures or people. This protection is for covered trips. You must be on a trip to a destination at least 100 miles from your residence for business or pleasure. Your coverage ends when you return from your destination.
Please review the DOC or Policy for a complete understanding of your state’s coverages and limitations.
This plan provides insurance coverage for your trip that applies only during the covered trip. You may have coverage from other sources that provides you with similar benefits but may be subject to different restrictions depending upon your other coverages. You may wish to compare the terms of this policy with your existing life, health, home and automobile policies. The purchase of this plan is not required in order to purchase any other travel product or service offered to you by your travel retailers. If you have any questions about your current coverage, call your insurer, insurance agent or broker.
Plans are available to residents of the United States and services are described on a general basis. Certain terms and conditions may apply. For complete information on policy benefits, limits and exclusions, please contact Arch at (855) PYB-TRIP (855-792-8747) for a sample Description of Coverage or Insurance Policy for this plan. All insurance products are offered and underwritten by Arch Insurance Company, which A.M. Best Company has assigned a financial strength rating of “A+” (Superior) and the largest financial category size of “XV”. Arch Insurance Company (a Missouri corporation, NAIC # 11150) is a licensed insurance company in all 50 states and the District of Columbia with admitted assets of $2.65 billion, total liabilities of $2.04 billion and surplus to policyholders of $609.51 million, as shown in the Quarterly Statement for the quarter ended June 30, 2013. Executive offices for Arch Insurance Company are located at One Liberty Plaza 53rd floor, New York, New York 10006.