Vacation car rental insurance – Does your credit card cover you?

cabo thrifty rental car
cabo thrifty rental car

Rental car in Baja Mexico. Photo: Matthew Mohr via Trover

 

You finally exit the airplane, gather your luggage and step up to the car rental counter. The car rental clerk is determined to ‘help’ you by offering supplemental insurance coverage. For a moment all manner of troubling scenarios play in your imagination. Someone might sideswipe you in a parking lot. You don’t know the city and could get distracted enough to rear end another car. The inner trauma-drama plays out until you remember that your credit card offers you car insurance. But does it?

oxotic supercar Rachael Garrett

Perhaps rent an exotic car? Photo by Rachael Garrett via Trover

Much depends on which card you are using to pay for the rental. Policies were compared recently by Card Hub in its annual Credit Card Rental Car Insurance Study. Consumer Affairs, a private, non-governmental company, also does research on best practices with car rental insurance. Between the two here’s some of the findings that should make filling out your car rental paperwork much easier and save you money.

pink car rental Cheskie's Gap Life

Why not rent a ‘Barbie Car’ in Australia? Photo: Cheskie’s Gap Life via Trover

Are you covered?
  • The top car rental coverage (in order) is offered by American Express, Visa and Discover with Mastercard a close fourth.
  • Each card covers a different risk but the car, home, life or health insurance policies, you already have plus your credit car could provide all or part of the protection you need. Know too that car rental companies are required to provide minimal insurance by law for every rental.
  • You need to decline supplemental coverage from the car rental company and put the entire bill on your card to get their full coverage.
  • Interested in renting a big SUV? American Express doesn’t cover many of the most popular.
  • Off-roading on the itinerary? Visa and Mastercard cover accidents on dirt and gravel roads ONLY if they are “regularly maintained.”
  • If you don’t have car insurance already or your card isn’t giving you enough coverage, accept the liability insurance and collision damage waiver offered by the car rental company.
escape campervan Emilie Adams

An escape campervan U.S. road trip with Emilie Adams via Trover

After flying for hours and finally getting to your destination, wrapping your head around all the car rental options at the rental desk can be a strain. The best time to go over the particulars is when you reserve your car, long before leaving for the trip. A phone call, scanning an online forum or the company FAQ’s will help the decision making long before you’re filling out the final paperwork.

Whatever you decide, spare yourself anxiety and unnecessary expense. Walk away from the counter, keys in hand, knowing that you’re covered and take to the road with ease.

More car rental insurance information:

car rental insurance tip sheet from Consumer Affairs.

The full Card Hub study including money-saving car rental tips.

I’m linking up with these great link parties. They’re each full of travel inspirations:

34 comments

  • Very true. I tried this on my last road trip. Even though I stood my ground and opted to stick with what I had researched the rental car agent did a great job of undermining my information. Then, once I hit the road the second guessing plagued me for a while. Bottom line…you have to be really sure of your facts and get the coverage in writing.

  • Good reminder to check the coverage of the credit card you’re going to use. I usually use the same card all the time, but occasionally I switch.

  • Great info! Thx. You’re right it is a fair amount of questioning that goes on at the counter – best to sort it all out before leaving.

  • I think it is important to check what exactly your credit card covers before your trip. I have paid to the car renting companies insurance money for not checking the credit card policies. Also, it would be good to check what the card insurance will cover for a car rented in a foreign country.

  • Great post and very good advice to sort all of your car rental/insurance before you arrive. I’m guilty of not looking at this kind of thing until I arrive and then the nightmare scenarios make me add insurance in case I’m not covered. I’m pretty sure my credit card covers quite a few things that I don’t take advantage of and now I’m going to look into it. Barbie car looks very fun! Thanks for sharing

  • Thanks for linking to the study. Another detail I found interesting to read: Only Mastercard’s World-branded credit cards are covered.

  • Some great advice here and something to check out next time we hire a car.

  • Perfect timing as we will be hiring a car later in the year for our US road trip.

  • We just took a road trip through New Zealand, and decided to go with the optimal insurance the rental company provided just in case. We were very happy we did so because we ended up having to use three different rental cars. One was broken into and another died. To me, the peace of mind and ease of the experience was well worth the extra money.

    • I’ve always wanted to drive a campervan in N.Z. but we did a quick drive from Christchurch to Milford Sound. Luckily there weren’t problems with the car. Sound like you had a terrible time but at least it wasn’t expensive.

  • We have rented cars in so many places, and they are all different so research is definitely the key. Also, one good tip is to take out your camera phone and snap photos of the car, in front of the agents, beforehand. It sends a message that you know what you are doing, and it might help if something does go wrong later.

    Thanks for linking up with Weekend Travel Inspiration!

  • You need to read the fine print on your credit card insurance if it is issued outside the USA, many cards even Amex, MC and VISA do not offer car rental insurance as part of their terms, especially if it is issued by a third party, i.e. a bank. Check automobile clubs they sometimes offer car rental only insurance for a fee.

    • Great points, Elizabeth. I’m a big and long-time client of the AAA Clubs in the U.S. but would need to check on their coverage anywhere else. Credit cards have very specific terms for coverage so it’s always good to know the fine print.

  • Great information. We always end up declining because we have car insurance and I’m pretty sure that our credit card has enough, too, but I should probably check. Surprisingly, the clerk asked us what our exact coverage was the last time we rented a car. We had no idea offhand, and it was the firs time we’ve been asked to name a dollar amount. Thanks for linking up with #WkendTravelInspiration.

    • Thanks, Michele. The rental companies are getting very aggressive about pressing for supplemental insurance or other coverage. It affects their profit margins, I get that, but for travelers it can be a weak moment that leads to unnecessary expense. I’m tickled to be part of the #WkendTravelInspiration.

  • Interesting post! I have an annual travel insurance policy and I know it includes car rental cover…but I’d never thought about checking credit card coverage. As you say, insurance can be a very finnicky process and it always pays to read the fine print carefully well before you need it.

  • My partner is an insurance broker and he always says make sure you take out all the excess insurance as well and of course read your policy to ensure you are fully covered – don’t just assume.

  • travelling chingrita

    Thanks for this post! It’s really helpful, actually funny enough I was in the US and had to get insurance for minor damages or scuffs. I didn’t want to risk because I know how credit card companies are sneaky.

    • Sorry to hear about the damage! If you’re pressed for time, it’s fine to use the rental insurance instead of checking on the credit card options. Better to be covered than not as you found out.

  • Some good info here. I know that many credit cards cover you but the question is how much do the cover?

  • Thanks for the great tips Elaine. It certainly pays to read the fine print, and to do it well in advance – when you have the time to go over all the details. Happy trails! 🙂

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