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Compare credit cards' rental car insurance policies

They vary widely in coverage; make sure you know yours

By Emily Starbuck Gerson

Car rentals and credit cards

Editor's note: This story, while accurate when published in 2008, has become outdated. See 2010 survey of credit card companies' rental car insurance policies.

If you're a veteran car renter, it's likely you routinely decline the rental company's offer of additional insurance coverage, smug in the knowledge that you're not wasting money. After all, if you get in an accident, your credit card will cover your deductible, right?

Maybe not. A closer look (chart) shows that credit card companies' policies vary sharply in who's covered, at what level, in which vehicles and where. 

What credit card insurance does, doesn't cover
Most major credit cards come with a rental car loss and damage insurance plan. If you get in an accident while driving a rental, your auto insurance policy will likely pay most of the damage, but your credit card company provides secondary coverage. It covers whatever your primary auto insurance doesn't, paying whatever is left and going toward your deductible.

But there are requirements to qualify for additional coverage and limits to it.

In order for the benefit to kick in:

When you rent a vehicle, do you buy insurance coverage from the rental agency?

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  1. The rental car must be paid in full with the credit card that provides the insurance plan.
  2. The cardholder must decline the auto rental company's collision waiver and be the primary renter of the car, though additional authorized drivers are also covered.

Credit card plans generally cover the repair or replacement of stolen or damaged rental vehicles. They also often include the charges of towing the vehicle to the nearest authorized collision repair facility. However, depending on the card's terms, the cardholder might be charged loss-of-use fees to cover the time when the damaged car is out of service during repair.

Coverage varies
Visa provides rental auto insurance to all cardholders as a free benefit. American Express offers it on all cards except the Delta Skymiles Options card; a paid upgrade to premium insurance is available too. Discover and MasterCard offer rental auto insurance only to cardholders at more elite levels, such as gold or platinum (in other words, those with better credit).Discover is the only issuer that doesn't offer loss-of-use coverage.

Most plans cover vehicles rented up to one month, and cover up to $50,000 of damage or loss (though American Express has plans that go higher). Be aware, however, that not all rental vehicles are covered. Commonly excluded vehicles are exotic cars, campers, pickup trucks and cargo vans and of course, limousins. Cars rented in certain countries are also excluded.

The accompanying chart outlines the basic auto rental insurance plans offered by the four payment networks. Details of auto rental insurance plans can change at any time and may differ slightly from issuer to issuer. Before you embark on a trip in a rental car, it is advisable to call your issuing bank (i.e., Chase or Capital One, not Visa or MasterCard) to gather the details on your individual plan.

Payment network Do all cards offer basic coverage? Amount of coverage Vehicle exclusions Limit on rental length Country exclusions

American Express

Yes

Up to $50,000 for Green, Blue, Gold, Optima, Small Biz, & Small Biz Gold cards; up to $75,000 for Platinum, Centurion, & Small Biz Platinum cards

Any type of pick-up truck, full-sized SUV, luxury van, exotic sports car and cargo van

Up to 30 days

Australia, Ireland, Israel, Italy, Jamaica New Zealand

Discover

No: Only available to holders of only Platinum, Miles by Discover, Discover Motiva, Discover Titanum, Discover Business and Discover Business Miles cards

$25,000 for personal cards; $50,000 for business

Off-road, antique or limited edition vehicles; trucks, recreational vehicles, campers, pickup trucks and minibuses; limited edition, high value, exotic, high performance or collector type vehicle; any vehicle which has not been made for 10 years or more

Will not exceed 31 consecutive days, or 45 consecutive days if the insured is an employee of an organization which has provided a card for business use

Coverage applies to vehicles rented in the U.S. and Canada only

MasterCard

No: Only available only to Gold, Platinum, World and World Elite cardholders

The lesser of the actual repair amount, current market value (minus salvage), or $50,000 per incident

All trucks, pickups, campers, off-road vehicles and other recreational vehicles; motorcycles, and any other vehicle with fewer than four wheels; vehicles older than 20 years

Up to 15 consecutive days

Australia, Ireland, Israel, Italy, Jamaica and New Zealand

Visa

Yes

Up to actual cash value of the vehicle as it was originally manufactured

Expensive, exotic, and antique automobiles; certain vans; vehicles that have an open cargo bed; trucks; motorcycles, mopeds, and motorbikes; limousines; and recreational vehicles

Up to 15 consecutive days in your country of residence or up to 31 consecutive days outside your country of residence

Ireland, Israel, Jamaica

Source: CreditCards.com research, conducted November 2008. Card terms are always subject to change. To report an update, write Editors@CreditCards.com.

See related: Renting a car with debit card? Expect to try harder

Published: November 10, 2008



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