Credit cards and rental car insurance

Credit cards and rental car insurance

December 16, 2016
rental car insurance

When it comes to the differences between debit cards and credit cards, one really stands out: the rewards. Credit cards come with rewards, and sometimes these rewards can help you save a lot of money. Take renting a car, for example. That’s where a credit card can really come in handy.

How it works

Most credit card companies, especially the well-known ones, provide their customers with some type of rental car insurance. In order to activate it, you just have to charge the entire car rental to your credit card. And after you rent the car, you have to remember to decline the collision damage coverage offered by the car rental company. There’s no point to getting two insurance policies for the same car. You’d just be throwing money away.

The downside

Unfortunately, the car rental insurance provided by your credit card also comes with certain limits. You won’t be able to cover high-end cars, antique cars, trucks or off-road vehicles. And there’s also a time limit to the coverage. This is usually 15 days for domestic rentals and 31 days for international car rentals.

In order to be fully protected, you have to read the fine print. Your credit card company won’t cover you if you use the rental car for business purposes and there are also some countries where coverage does not apply. These countries include Australia, New Zealand, Israel, Ireland, Italy and others.

The bottom line

Using your credit card to rent a car can be a smart choice, as it can help you save money on rental car insurance. But this doesn’t mean that you shouldn’t do your homework first. The better you know your credit card, the better it can serve you.

Thomas Hookton

Thomas Hookton is a finance journalist, history buff and science fiction connoisseur. Hit him up via email.

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