Does Your Credit Card Really Cover Your Rental Car?

— -- intro: The next time you’re renting a car and deciding whether to opt into the rental company’s insurance coverage, consider this: If you have a credit card, it’s likely you’re already covered.

Cards on the four major credit card networks (Visa, MasterCard, American Express and Discover) usually have some sort of auto rental insurance built into the card benefits, but the details vary. To get a clear understanding of what your liability might be if your rental vehicle gets damaged, check the terms and conditions of your credit card or call your issuer’s customer service line before renting. Generally, here are some important things to know about credit card rental insurance.

quicklist:title: You Have to Choosetext: When you rent a car, you can pay the rental company about $20 to $40 (perhaps more or less) a day for different kinds of coverage, including a collision damage waiver, supplemental liability protection, personal accident insurance and personal effects coverage. However, a consumer may already have access to one or more of these protections through their personal car, home, life or health insurance, and possibly credit cards. Again, you’ll want to look into your insurance protections before getting a rental vehicle.

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If you want to use your credit card benefit, you generally need to decline the waivers offered by the rental company. Credit card rental car insurance is usually offered as an alternative to those policies, not as a supplement.

quicklist:title: You Have to Use the Cardtext:Merely carrying a credit card with car rental insurance benefits isn’t going to help you. To be eligible for the benefits, most policies require you to pay for the entire rental with your card in order to file a claim. The car must be rented in the same name that’s on the credit card, generally.

Using a credit card to pay for the rental car can have other perks, too. If you’re a frequent traveler, you can use a travel rewards card to pay for the rental and earn miles toward your next trip.

quicklist:title: You Need to Read the Fine Printtext: Many credit card policies do not cover damage to luxury or exotic vehicles, and some credit card networks won’t cover cars driven in certain countries, either. Even if you have multiple cards from the same network or the same issuer, the benefits may vary, depending on what kind of card you use to rent the car. Discover, for example, has four kinds of car rental insurance for its cards, which vary in terms of what type of damage is covered and the value limits on that coverage.

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Make sure you’re familiar with the specific benefits of the card you use.

In that fine print, you may be pleasantly surprised to learn of some little things the program covers.

A spokeswoman from American Express gave this example:

“With the secondary insurance that is included as part of the card’s benefits, the fees that are covered include reasonable towing or storage charges, loss-of-use and administrative fees when the rental company provides appropriate documentation,” the spokeswoman wrote in an email to Credit.com.

quicklist:title: You May Still Have to Paytext: Your credit card rental car policy may cover the cost of the car in the event of theft, but it may not include the cost of personal items lost in the theft. In the event of an accident, the damage to your rental car may be covered, but not the damage to other vehicles or related medical expenses.

These credit card insurance policies are usually considered secondary insurance policies, and may not cover some of the big costs associated with an accident. In other words, if you have primary insurance - traditional car insurance that also covers your use of rental cars - the secondary insurance through your credit card will only cover some things not covered by your primary insurer. If you don’t have car insurance to begin with, you may have more out-of-pocket costs than someone who has car insurance. If you have car insurance, you’ll need to file a claim with your insurer and your credit card company.

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If you don’t have primary insurance, you might be able to purchase it, and the broader coverage it offers, through your credit card company, too. It may seem confusing, considering how many options you might have for protecting yourself when renting a car, but it’s worth looking into your credit card or various insurers’ policies, so you don’t end up unnecessarily spending money on coverage through a car rental company. Renting a car can be expensive enough in the first place, and even though it’s a good idea to protect yourself against the unpredictable, you may not need to spend more to do so.

Any opinions expressed in this column are solely those of the author.