10 Credit Card Rental Car Insurance Surprises

January 13, 2011

Car Rental Credit Cards Insurance

Does your credit card offer rental car insurance?  In honor of Jerry Seinfeld using his only credit card that didn’t have rental car coverage, these are ten things you might not know about insurance when renting a car.

It all started when I rented a car recently with my Blue Cash card and I called in to see how the Car Rental Loss & Damage Insurance Plan worked for American Express.

If you’re renting a car with a travel rewards card from Visa or Mastercard you’ll need to check out the policy of your card but these should at least give you a few things to investigate and questions to ask about rental car insurance.

As I was on the phone with the customer service rep I took notes about all the things I needed to keep in mind about the Car Rental Loss & Damage program and these are the ones that stood out in my mind.

First off, the plan is only available if you use your American Express card to reserve and pay for the whole rental. The first few items are probably the most important, the rest are just nice to know.

1) Credit Card Insurance is Secondary Coverage – If you damage the car, American Express covers excess charges that aren’t covered by your auto insurance policy.  For most people this means that they’ll pay your deductible.  You send the declarations page of your insurance policy to American Express to show the amount of your deductible, you can submit a claim at yourcarrentalclaim.com

2) No Liability Coverage – The Loss & Damage Insurance Plan offers excess collision, comprehensive, and theft coverage.  There is no liability coverage provided with your American Express Card. If you damage property other than the rental car or injure anyone, the insurance does not cover it.

3) CDW Invalidates Plan – The terms of the Loss & Damage plan require you to decline the car rental company’s Collision Damage Waiver and Theft Protection commonly referred to by rental car companies as CDW.

4) Other Drivers Allowed – As long as the additional drivers are listed on the rental agreement, those people are covered if they damage the car.  The plan will pay the deductible on their auto insurance, if they don’t have insurance then they’ll pay up to your deductible.

5) Limited Time Offer – Coverage is provided for vehicles rented for 30 consecutive days or less. If you’re there for more than a month, don’t get into an accident on your 31st day.

6) Leprechaun Exclusion Clause – If you hit a Leprechaun the plan won’t cover any damage because Ireland is excluded in the plan terms. The insurance coverage applies in all but six countries around the world. There is no coverage provided for vehicles rented in Ireland, Australia, New Zealand, Italy, Israel and Jamaica.

7) Gas Guzzler Exclusion Clause – If you’re earning a ton of cashback on your gas credit card for the rental, chances are your vehicle may not be covered. Cargo Vans, Custom Vans, Pick-up Trucks and moving vans such as U-hauls aren’t covered.

8) Big SUV Exclusion Clause –  Compact Sport Utility vehicles are covered, however, there is no coverage provided for full size sport utility vehicles such as a Ford Expedition.

9) $50,000 Cap – The coverage under the Rental Loss & Damage Insurance Plan only applies on cars worth under $50K.  So if you rent a BMW 535i or a big fat Mercedes E350 and put a dent in it, don’t expect to have your deductible covered.

10) Extra Coverage Available – Okay, so it probably isn’t a surprise that there’s premium car rental protection available for a fee. It runs $24.95 for the period of the rental and it serves as your primary insurance on the car.

The main thing to remember when you’re dealing with insurance is to read all the terms and conditions so you know what’s covered.


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Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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