Whether you are an occasional traveler or a world class globe trotter, renting an automobile and having adequate insurance coverage comes with the territory. You may have multiple sources of protection including your personal automobile insurance coverage, liability insurance supplement (LIS) offered by the rental agency or from the credit card company you used to rent the car.Before you accept or reject the insurance offered at the rental car counter, examine your existing policies to determine whether you have the right amount of coverage and what each policy covers. Some policies may be limited in case of an accident or you may need to comply with specific rules to be eligible. These are things you need to understand in advance of renting an automobile.
Your liability when in an accident in a rental car includes any damage to the vehicle, the loss of the car during your rental, whether by destruction or theft, and loss of revenue by the rental agency while the vehicle is out of service. Other than the vehicle itself, most states require liability insurance that will cover injury to passengers involved in the accident.
Credit Card Rental Car Insurance Policies
Don’t take the word of a friend or family member when it comes to car rental insurance provided by your credit card company. Credit cards issued from the same bank may not necessarily carry the same amount of insurance coverage. Call the number on the back of the card to get the details. Make sure you understand the restrictions or exclusions. Ask for the information in writing, fax or email.Typical coverage includes collision and theft protection at no extra cost when you use the credit card to rent the car. It may also cover loss of use and towing charges. The credit card issuer may require you to decline the supplement coverage offered by the car rental company in order for the credit card-provided insurance to be in force. Here is a list of the typical coverage offered by the major card carriers.
– American Express provides car rental insurance cover for theft or damage to rental cars. Travel insurance, on the other hand, will only pay what your personal car insurance policy does not pay. In addition, American Express offers an optional Premium Car Rental Protection that provides primary collision, accidental death and dismemberment and secondary medical and personal property coverage. There is no cost to enroll, but your card is charged a flat price of $24.95 per rental period.
– Visa Cards offers the widest range of coverage for virtually all their credit cards, regardless of the bank that issues the card. Auto rental collision coverage for damage or theft, as well as valid administrative, loss of use and reasonable towing charges.
– MasterCard includes rental car insurance as a benefit on a more limited basis. Gold and Platinum cardholders are more likely to include the coverage – it depends on the issuing bank.
Personal Car Insurance Coverage
Typically your car insurance policy will kick in after you’ve met the deductible. It may not apply if you use the car for business or if the car is driven by someone not covered by your personal car insurance. Be sure your car insurance policy includes enough coverage to cover the value of the car that you rent. If you only have coverage on your car which is valued at $15,000, you will not be covered if you total a $30,000 rental car.It’s imperative that you read and understand the policies you hold before the rental car agency tries to sell you additional coverage that may not be necessary and will cost approximately $10 per day. You may not need the car rental agency insurance. Be sure to check out any restrictions or exclusions like property damage or bodily injury coverage.
About The Author: Noreen Ruth writes for ASAP Credit Card Blog and several popular finance websites. She is interested in educating consumers about using credit responsibly and about legislative action that will affect their ability to borrow the money they need. She has contributed hundreds of articles to various online sites that provide content on credit insurance, low APR credit cards, debt relief services, loans and other finance topics.
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