Having a rental car to use can be a convenient solution to logistical problems with out of state travel or even getting to work, if your personal vehicle is in the repair shop. That is why rental car companies like Enterprise Rent-A-Car and Hertz have thrived since their start up in 1957 and 1918, respectively. While rental cars can be leased with payment in cash or credit, credit card companies have policies that cover collision damage, which can save you out-of-pocket money from purchasing a collision waiver from the rental agency itself. Paying by credit also has the benefit of documenting your transaction as a business expense, should that be necessary.
If you plan to pay for your rental card by credit, then here are five important facts to know.
1) Not all credit card companies include insurance coverage for rental car use.
While most Visa credit cards include coverage, you should check with your credit card company with regards to the specific credit card you carry. For example, according to a blog on credit.com, the Slate card from Chase is one of those cards that exclude rental car insurance. MasterCard, Discover, and American Express also offer rental car insurance at no cost, but may be available to certain customers above a threshold level of credit, as described in an article on creditcards.com.
2) Be aware of gaps in coverage, even if your credit card company claims to have you covered.
There are many stipulations that have to be met before your credit card company can provide rental car insurance. As referenced above in the article on creditcards.com, you must decline the rental car agency’s collision waiver. You must also be the primary renter of the car. To be covered by a policy of rental car insurance offered by a credit card company, you must pay for the rental car using that card and not another card from a different credit card company and expect the same coverage.
3) The fine print is not always mentioned by credit card company representatives when they tell you over the phone that your card carries rental car insurance and what it covers.
If you were to be involved in an accident, you would most likely expect the credit card company to pay for all the costs if they mentioned you were covered. However, not all credit card companies cover a rental car agency’s bill for loss-of-use. This loss-of-use is the loss of revenue a rental car agency incurs while its rental car is sitting in a repair shop. Discover is the only company to not offer coverage for loss-of-use. The other three – American Express, MasterCard, and Visa do offer coverage, given that they have what is called a fleet-utilization-log. This document shows that other cars were not available to replace the damaged one. According to Randy Harris, president of Khoury-Alternative Claims Management, “MasterCard and American Express are the toughest … They are handled by the same third-party administrator and it tries to pay out as little as it can. Visa is easier to work with.”
4) Usage is another stipulation a credit card company checks when investigating a damage claim for a rental vehicle.
Some companies only pay when the vehicle was used on paved roads. And if your vehicle was damaged in a national park driving on dirt roads, then your vehicle may not be covered. Check with your credit card company to find out. Even certain popular tourist locations are not covered, such as in Italy, New Zealand, Ireland, Jamaica, and Israel, according to “What You Need to Know Before Renting a Car With a Credit Card.”
5) Lastly, you need to rent the right kind of car.
Specifically, pickup trucks and full size vans are vehicles that may be excluded from certain policies. Also, most card card insurance policies don’t cover exotic luxury vehicles. So think again about renting that Rolls Royce unless it’s covered by your credit card company!