Does my card cover rental insurance abroad?

By  |  Published: January 31, 2017

Cashing In
Cashing In columnist Tony Mecia
Tony Mecia is a business journalist who writes for a number of trade and general-interest publications. He writes "Cashing In," a weekly column about credit card rewards programs, for CreditCards.com

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Question Dear Cashing In,
Does my Costco Citi card allow me to waive the collision damage waiver when renting a car in Ireland? – Joan

Answer Dear Joan,
Among other perks, reward cards typically come with car rental insurance – that’s something we can safely say.

Beyond that, though, it becomes hard to generalize whether you should accept a car rental company’s offer of additional insurance. Depending on your personal auto insurance and the card you are using to pay for the rental, additional insurance from the rental company might not be necessary.

You can save some money by doing a little bit of homework before you travel:

 

  1. Check with your auto insurer. Policies differ. Usually, personal auto insurance policies cover the driver, even if driving a rental car. But your policy might not cover rentals in certain countries or certain types of vehicles. You might be able to find out by reviewing your policy, but it might be easier to call and ask.
  2. Compare your credit cards. Once you know what your personal insurance covers, check what coverage your reward cards offer. With a few exceptions, they tend to offer secondary insurance, which means that the policies kick in only after your personal insurance has paid out. They also might have exclusions for certain countries, and they often cover you and the vehicle you are driving – not any damage to other vehicles or people.
  3. Use the card with the best coverage. Remember that the card coverage takes effect only if you use the card for the rental.

 

Here’s how personal and reward card insurance work in tandem: A few years ago, when I was returning a rental car in Hawaii, the attendant noticed a long scratch on the bottom of the driver’s side doors. I’m not sure how it got there. The company sent me a bill for $1,200. (Gasp!)

I routinely decline extra insurance offered by rental car companies, and I began to wonder if that was a mistake.

I submitted the bill to my insurance company, which gathered information and paid it, except for my $500 deductible and the rental company’s $100 charge for “loss of use.” I passed that information along to the reward card’s insurance company, which paid the $500 deductible. The rental company’s agent agreed to waive the “loss of use” fee, so the whole experience wound up costing me nothing, except for several hours on the phone and compiling records.

In the case of using the Costco Anywhere Visa in Ireland, the card’s benefits listed online say that it provides up to $50,000 in coverage toward the cost of the vehicle you are driving. Inside the U.S., it provides secondary coverage, but internationally, it provides primary coverage.

It covers damage to the car from an accident, natural disaster or vandalism, or if the car is stolen. There are no countries listed as exceptions.

In other words, it sounds as though you might be OK without the collision damage waiver. But you should call your insurance company and your card company just to be safe. You will probably also want to check the status of liability coverage.

Safe travels!

See related: How your card might reimburse canceled trip costs, Is it time to ditch my airline card for bank rewards or a Costco card?

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Updated: 10-23-2017

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