Car Rental Benefits Offered By Credit Cards – Forbes Advisor Canada - Forbes

Many credit cards offer some form of collision damage waiver coverage for car rentals, which helps cover costs if the vehicle is damaged or lost during your rental period. This is perhaps the most valuable car rental benefit of most credit cards, as it can protect you against substantial financial loss in the event that you damage a rental car. It can also help you avoid paying up to $40 per day with the car rental company's insurance.

To take advantage of this benefit, you typically need to decline the car rental agency's coverage and charge the full amount of the rental to your credit card.

Primary or Secondary Insurance

One of the most important things to understand when relying on your credit card's car rental insurance benefit is whether the coverage is primary or secondary.

Generally, your personal car insurance will cover you in the case that a rental car you are driving is lost, damaged or stolen, but if you have primary coverage, your credit card's coverage will pay for damage before your personal car rental insurance. This is important because most people's personal car insurance carries a deductible and any claims against it may show up on your driving record and cause rate increases. Secondary coverage through a credit card will only pay for damages not covered by your personal insurance.

Check the terms and conditions of your card to understand whether your coverage is primary or secondary. All other things equal, it is better to rent a car with a card that offers primary insurance for rental cars.

Business or Personal

Whether you are renting your car for a business trip or for a vacation can affect your eligibility for your credit card's car rental insurance coverage. Many credit cards limit their car rental insurance coverage based on the purpose of your trip. This is especially common among small business credit cards where the terms stipulate that coverage only applies to rentals made for business purposes.

Renting Internationally—Beware of Exclusions

Your credit card may offer some form of car rental coverage, but that doesn't mean that it offers the same coverage everywhere. Most credit cards offering car rental coverage exclude certain countries from coverage. You'll need to check for exclusions or limitations if travelling abroad to ensure you're covered.

When renting internationally, it is also a good idea to ensure that you are carrying proof of coverage. In some cases, you may be required to provide proof of coverage or you'll be forced into buying a policy at the counter, especially since not all international rental car counters are familiar with collision damage waivers provided by credit cards.

Your credit card company or its benefits administrator should be able to provide a letter of coverage summarizing your credit card's collision damage waiver insurance and where it applies. Having this proof in-hand can ensure your international rental experience is as smooth as possible and hopefully help you avoid a hard sell for expensive, extra coverage when you pick up your car.

In some countries, it may not be legally allowed to turn down the included car rental insurance, even with proof of your own coverage. This is rare and your credit card coverage may still apply in these cases. It's best to call the number on the back of your card and explain the situation before you take the car.

Other Limitations

In addition to the above, credit card car rental insurance may come with other limitations and exclusions and it is important to understand these before relying on coverage. Many credit cards commonly limit the duration of the rental they will cover. Several card issuers exclude person-to-person car-sharing services, like Turo, from their rental car coverage. Also commonly excluded from coverage are vehicles such as moving vans, trucks and towing vehicles, as well as luxury vehicles. Check the rental policy to find out what types of cars are excluded.

Finally, note that credit cards generally do not provide liability coverage or medical coverage as part of their car rental insurance benefits; they only offer loss/damage coverage on the vehicle you rented. This means that if you are in an accident, the credit card company will not pick up the cost of medical treatment required by you, the people in your vehicle or people in another vehicle. Generally, credit card rental coverage will also not pay for damage to a vehicle other than the one you are renting. In other words, car rental insurance covers the car, not you.

As always, you should read your credit card's insurance certificate (located on the card issuer's website) to ensure you know what insurance coverages are offered and the limits of the coverage.