7 things to understand before relying on credit card rental car insurance – How many do you already know?

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One of the best travel credit card perks is rental car insurance, which can save you bunches on car rentals. But, it can also lead you to mistakenly believe you are covered when renting a car, though you may not be.

This simple misunderstanding of the complex world of credit card insurance causes nightmares for people around the world every day. Here is what you must know before relying on credit card rental car insurance.

Happy Couple in Rental Car
Renting a car is a fun way to travel. But before you rely on credit card rental car insurance, here is what you need to know. (Photo courtesy of G Stock Studio/Shutterstock.)

7 things you must know before relying on credit card rental car insurance

While we can’t change the rules of rental car insurance, being aware of these seven “gotchas” of credit card rental car insurance can save you a lot of headache and surprises in the future.

Credit card rental car insurance doesn’t cover liability and personal injury

One of the biggest things to know about credit card rental car insurance is that it doesn’t cover liability and personal injury. This means that any hospital bills incurred by you, your passengers or other parties involved in the accident could fall squarely on your shoulders. Liability is often the most expensive piece paid out as part of an accident. Without proper coverage, these bills can easily bankrupt you.

If you are found at fault for an accident, other parties (or their insurance companies) injured in the accident can sue you for damages or to cover bills incurred as part of it. This even includes passengers in your own rental car. Some rental car companies do extend liability insurance to meet minimum requirements in certain states, however these minimums are usually very low and totals can easily exceed these amounts (which you are personally responsible for).

However, quite often your personal car insurance’s liability coverage will extend to rental cars, just be sure to double check that it does.

Long term rental cars (Over 15-30 Days) might not be covered

If you plan a long trip which might result in a rental car of 15+ days, you should make sure to call your credit card company to see the maximum length of time that you can rent a car and still be covered. Some rewards credit cards will only cover rentals less than 15 days in length.

As a rule of thumb these are the limits for most cards:

  • Visa: provides coverage for up to 15 days (international rentals are covered for up to 31 days)
  • Mastercard: provides coverage for up to 31 days
  • American Express: provides coverage for 30 days, but this can be extended to 42 days with the purchase of Premium Rental Car Protection

These are minimums for each card brand. Some banks will provide improved coverage above these limits. For example, Chase offers coverage for up to 31 days on its Chase Sapphire Reserve® and Chase Sapphire Preferred® Card, even though both are Visa credit cards which normally only offer 15 days of coverage.

Some countries are excluded from coverage

I once rented a car in Italy, only to later discover that I was not covered under my credit card insurance because Italy is not a covered country. Luckily, I didn’t need rental car insurance, but I won’t make that mistake again.

Common countries that void credit card rental car insurance are:

  • Australia
  • Ireland (and Northern Ireland)
  • Israel
  • Italy
  • Jamaica
  • New Zealand

The exact countries vary from card to card. So it’s worth calling your bank to see what restrictions they have or looking in your card benefits guide.

Driving along New Zealand Coast in Rental Car
Dream of driving in New Zealand? Just beware that many credit cards do not cover rental cars in this country. (Photo by viewfinder/Shutterstock.)

That free upgrade might be a terrible mistake

Have you ever bragged to your friends about that time the rental car agency upgraded you to a Murcielago when all you reserved was a Corolla? It might seem like a great opportunity at the time, but just be mindful that many “premium” car types are excluded from credit card rental car insurance. Taking this free upgrade might be excluding you from using your credit card insurance for coverage.

The exact specifics of what cars are and aren’t covered will vary by credit card. But these are some common exceptions for most cards:

  • Trucks or Vans
  • Trailers or anything capable of towing
  • Premium vehicles (usually defined as any car with a retail value > $50,000)
  • High capacity vehicles (usually defined as a vehicle with three or more rows of seating and/or capable of carrying six or more passengers)
  • Convertibles

This goes with standard reservations, too. If you plan on reserving a truck to haul some stuff for that big yard project you have planned, just be aware that credit card insurance will not cover you and you might want to opt-in to other coverage. Be especially mindful of SUVs, many new SUVs have 3rd row seating, and these can exclude you from credit card insurance coverage. Even if you are only traveling by yourself or with a single passenger, the car is capable of more than six passengers and can void the coverage.

You’ll still have to pay out of pocket first and hope to get reimbursed later

Even if you are covered in an accident through your credit card insurance, the claim process is slow and convoluted. The rental car company will generally bill you immediately for cost of any damage and other fees associated with the accident (such as an administrative fee or “loss of use” fee) and you will need to cover them yourself. At this time, you can begin a claim with your credit card insurance, but beware that this process can take months. During which, you will be awaiting a reimbursement with no guarantee that it will ever come.

If more information is needed, this waiting process could extend for a very long time. The credit card company can also decide that they will not cover parts of the accident, which you will still be on the hook for personally.

Most credit cards still require you to file a claim with your primary insurance provider, which can lead to long-term premium increases

Most credit cards offer what is called “secondary coverage.” This means that they require you to use your primary auto insurance provider first and will only fill in the gaps afterward. This usually means covering your deductible and other fees and charges. However, you still need to file a claim with your primary insurance provider, which often leads to increased premiums.

Credit cards that offer primary rental car insurance don’t have this requirement, which means your auto insurance doesn’t even have to know about the accident. This can result in a huge amount of long-term savings thanks to that credit card. To get the most out of credit card car insurance, you should look for a credit card with primary rental car coverage. The Chase Sapphire Preferred is a great first card for most people, which earns valuable and flexible travel rewards. But one of it’s best selling points is that it offers primary rental car coverage.

Some credit cards only cover rental cars used for business purposes

It is also important to check if you credit card has any restrictions on the type of rental cars they cover. A common restriction we see with rental car insurance offered with business credit cards is that they only offer primary rental car insurance for business purposes.

One popular credit card with this restriction is the Ink Business Preferred Credit Card. This is an excellent business card, but be aware that if you are renting a car for a personal vacation you’ll want to use a different credit card, like the Chase Sapphire Preferred® Card which offers primary rental car insurance for personal rental cars.

Bottom line

Credit cards that offer rental car insurance, especially those with primary coverage, can be a huge money saver when renting a car. But it’s important to understand what is and isn’t covered by this insurance coverage.

Here are seven things you should remember before you rely on credit card rental car insurance:

  1. Credit card rental car insurance doesn’t cover liability or personal injury expenses
  2. Long-term rental cars (over 15 days) might not be covered
  3. Some countries are excluded from coverage
  4. Some car types are not covered (be careful of free upgrades to premium cars)
  5. You still need to pay out of pocket first, and hope to get reimbursed later
  6. Most credit cards only offer secondary coverage, so you’ll still need to file a claim with your personal auto insurance provider
  7. Some credit cards only cover rental cars being used for business purposes

Keep these tips in mind before you rent your next car to make sure you prevent any trouble in the unfortunate event of an accident.

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Alex Curtis is a contributor to Million Mile Secrets, he covers topics on points and miles, credit cards, airlines, hotels, and general travel.

Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)

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