When Standard Rental Car Insurance From Your Credit Card Is Insufficient
One of the most valuable features of many credit cards is the rental car insurance that is provided for free to all members. Most credit card users know about this coverage, but few are aware of its limitations. In order to be confident that credit card holders will be covered in the event of a rental car accident, they should look out for the following loopholes.
Territorial Exclusions
The automobile insurance policies offered by most credit cards exclude coverage of cars rented in many popular tourist destinations such as Ireland, Italy, Israel, and Jamaica. In some cases, Australia and New Zealand are excluded as well.
Vehicle Exclusions
Most policies exclude nearly all types of unconventional vehicles including trucks, vans, luxury cars, sports cars, and sport-and utility vehicles.
Un-Paved Roads
Over half the roads in the United States are not paved with a hard surface. At the same time, most major rental car companies prohibit driving off-road and on un-paved surfaces. Doing so violates the rental car agreement, voiding the coverage of all insurance policies, including the one provided by credit cards.
Method Of Payment
In order to be covered by their credit card’s insurance policy, customers must use their card to pay for their rental. This requirement excludes any car that is rented with a loyalty point award or any other type free rental certificate. Even when customers use their card to reserve the vehicle and pay taxes, the charge for the base rental price must be made to the renter’s credit card in order to qualify for the standard insurance policy. Fortunately, those who utilize a coupon for a free day are still covered, so long as there are other paid days during their rental.
Decline Additional Coverage
The insurance provided by credit cards is only available to customers who decline the policies offered by the rental car agency.
Primary Versus Secondary Insurance
Although some credit cards offer primary insurance, the vast majority are only secondary policies. This means that, in the event of an accident, the rental car agency will bill the customer’s auto insurance policy first, and then only pay claims for what is not covered, minus the deductible.
Conclusions
The rental car insurance policies provided by credit cards are a great benefit, but they are still filled with loopholes. By offering insurance through third parties, and by failing to post the details of these policies on their web sites, banks do little to inform their customers of these limitations. Most cardholders take for granted these rental car insurance policies. But to remain with the terms of these agreements, customers must thoroughly understand these policies limitations and exclusions.
