Take Advantage of Your Credit Card’s Rental Car Insurance

rental car insurance

You’re sick of winter and already making plans for spring break. At some point, you may need to rent a car at your destination. The rental company will ask if you’d like to tack on full rental car insurance, known as a Collision Damage Waiver (CDW).

A CDW is a piece of coverage that can cost you an average of $20 to $40 per day, almost the same price as renting the car.

You could always wing it and go without rental car insurance. If an accident happens, you’re responsible for making the insurance claims, along with out-of-pocket costs. These costs will potentially send you into debt, something no one wants.

One alternative is to use your existing auto insurance to cover rental car insurance. This provides coverage in circumstances like collision and theft. However, it depends on your policy.

Another option? Your credit cards. They may provide the rental car insurance coverage you need, but there are several things to consider.

Credit card rental car insurance: What you need to know

Rental car insurance coverage through your credit card varies, depending on built-in rules and policies, and individual incidents.

What’s covered by your credit card

If you have an auto insurance policy, your credit card usually provides secondary, or backup, coverage.

If you get into a fender bender, you’ll need to file a claim with your auto insurer. Your credit card should pick up the cost of damages not covered by your auto insurance. These include deductible costs, towing expenses, and other charges.

Your credit card will usually cover any damages to your rental car, but not the cost of damages to other cars. This coverage typically ranges between $25,000 to $50,000, but can be as high as $100,000.

The value of a stolen rental car is also covered by your card issuer, provided it doesn’t exceed the maximum coverage amount. If the car is broken into, your credit card will pay for the cost of repair to any damaged parts. However, they won’t cover the cost of but not your stolen belongings.

Without an auto insurance policy, your credit card will provide primary – not secondary – coverage if you’re traveling overseas. Usually this is only in countries where your insurance coverage may not be effective. All damages or costs would be covered, but check with your carrier first.

What’s not covered by your credit card

Each of the four major credit networks (Visa, Mastercard, American Express, Discover) provide rental car insurance policies, not every card offers the same level of protection. Some countries are also excluded:

  • AmEx doesn’t offer car rental insurance in Ireland, Israel, Jamaica, Italy, Australia, and New Zealand.
  • Mastercard excludes insurance in Ireland, Israel, and Jamaica.
  • The Escape Card by Discover excludes insurance coverage in Ireland, Israel, Jamaica, and New Zealand.
  • Visa doesn’t offer insurance protection in Ireland, Northern Ireland, Israel, and Jamaica.

For credit card rental car insurance, certain vehicles aren’t covered:

  • Sports or exotic cars above $50,000.
  • Antique vehicles over 20 years old (or those not manufactured for over 10 years).
  • Vans, trucks, limousines or RVs with an eight or more passenger capacity.
  • Motorcycles, mopeds or all-terrain/off-road vehicles.

Credit cards won’t insure accident or incident liability. If you’re involved in an accident where another party sues you, you’re responsible for the expenses. Rental agencies may offer a minimal amount of liability coverage, but it may not be enough.

In addition to liability coverage, rental car agencies may also impose what are called “loss of use fees.” This is to compensate for the money they’ll lose while the car’s being repaired. Your credit card generally won’t compensate you for these fees.

Rental car insurance tips

Thinking of using a credit card for car rental insurance? Adhere to these tips before taking out any coverage:

  • If you choose to insure your rental car with your credit card, you must decline the rental agency’s insurance offer.
  • To activate insurance, you’ll need to be the primary renter of the vehicle.
  • Charge the entire transaction, insurance included, on the same credit card. You won’t be allowed to use your debit card for the rental and a credit card for the insurance.
  • Credit card rental car insurance is free of charge. Once you charge a rental to your card, the insurance is complimentary and comes at no initial cost (minus any fees).
  • A card that only carries car rental insurance can’t be used to pay for the vehicle rental.
  • Don’t go in blindly. Before you rent a car, contact your card provider to inquire about their insurance policies and rules.
  • If you’re opening a new credit card account, read the statement of benefits in advance if you think rental car insurance is something you may take advantage of in the future.
  • Credit card car insurance normally covers rentals up to a month, though some cards only offer a 15-day policy. AmEx and Discover offer longer terms, up to 42 and 45 days, respectively, if you’re a member of a premium program (AmEx) or using a card for business purposes (Discover).
  • Always examine the fine print of an insurance contract. You may not be covered or denied coverage altogether if you drive on roads that are unpaved. Coverage may also be denied if you wait too long to file an insurance claim.
  • You may lose coverage if you let someone drive the car who’s not listed on the rental contract.

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1 Includes AutoPay discount. Important Disclosures for SoFi.

2 Important Disclosures for Citizens Bank.

SoFi Disclosures

  1. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Finance Lender Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
  2. Personal Loans: Fixed rates from 5.49% APR to 14.24% APR (with AutoPay). Variable rates from 5.29% APR to 11.44% APR (with AutoPay). SoFi rate ranges are current as of December 1, 2017 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 5.29% APR assumes current 1-month LIBOR rate of 1.34% plus 4.20% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

Citizens Bank Disclosures

  1. Personal Loan Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of August 1, 2017, the one-month LIBOR rate is 1.23%. Variable interest rates range from 6.02% – 15.97% (6.02% – 15.97% APR) and will fluctuate over the term of your loan with changes in the LIBOR rate, and will vary based on applicable terms and presence of a co-applicant. Fixed interest rates range from 5.99% – 16.24% (5.99% – 16.24% APR) based on applicable terms and presence of a co-applicant. Lowest rates shown are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with Citizens Bank at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, Citizens Bank checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Benefit: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
7.39% - 29.99%$1,000 - $50,000Visit Upstart
5.29% - 14.24%1$5,000 - $100,000Visit SoFi
8.00% - 25.00%$5,000 - $35,000Visit Payoff
5.99% - 16.24%2$5,000 - $50,000Visit Citizens
5.99% - 35.89%$1,000 - $40,000Visit LendingClub
5.25% - 14.24%$2,000 - $50,000Visit Earnest
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