How Does Credit Card Car Rental Insurance Work? The Inside Scoop

how does credit card car rental work

It’s important to have enough car rental insurance when you rent or lease a car. Many credit cards offer some kind of car rental insurance as a perk. However, it can be hard to tell what your credit card does and doesn’t cover. You can avoid unpleasant surprises by finding out the exact terms for your cards before your rent a car. Here’s a quick rundown of how credit card car rental insurance works.

Understanding Car Rental Insurance

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Everyone wants to save money on their rental car. Daily rates and fees can add up quickly. Car rental insurance might seem like an unnecessary expense if you have a tight budget. However, it can be the most important part of your rental agreement. In essence, the car is insured by the rental company no matter what. It’s illegal to operate a vehicle that doesn’t have insurance. Car rental insurance offered by the rental agency reduces your liability in case of an accident. If you don’t get insurance, you could be responsible for the total value of the vehicle and other damages. A Collision Damage Waiver is the most common form of rental car insurance. Although it releases you from liability, you may have to pay a high deductible.

There are other types of rental car insurance that behave more like regular insurance. It’s always a good idea to get extra personal liability protection or protect your possessions in case of theft while visiting a new place.

Can I Use My Personal Auto Insurance?

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It’s common for people to decline rental car insurance because it appears to do the same thing as their personal car insurance. If you get into an accident, you’ll still be liable for the damages, but your insurance company will receive the claim and cover your liability. This can drive up the cost of your insurance. An accident can raise your premiums, even if the accident wasn’t in your vehicle. Naturally, this can depend on your insurance provider. You should always check with your insurance agent before renting a vehicle.

To avoid raising your insurance premium, it’s often a good idea to get the car insurance from the rental company while booking. While it might not completely remove liability from the driver, it can protect you if the worst happens.

What Does Credit Card Insurance Cover?

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There are two main types of coverage for credit card insurance. The kind that most cards offer is called Secondary Coverage. This type of extra insurance kicks in after your personal auto insurance pays out. Secondary Coverage is usually to reimburse your deductible, which can be very high depending on your personal or rental insurance.

The other main type of credit card rental insurance is Primary Coverage. This type of coverage pays out before your personal insurance. This means you won’t have to get your insurance company involved if the damages are lower than your deductible. This can save you money and frustration in the long run.

What Do I Ask My Credit Card Company?

A benefits guide can be confusing and difficult to read. If you plan on renting a car, it’s always helpful to confirm your benefits with your card issuer. Be sure to ask if your card offers primary or secondary rental insurance. Primary coverage is better because you can avoid your premiums rising. Secondary Coverage will reimburse your deductible and other costs not covered by your personal policy, but after your personal auto insurance pays out.

How Car Rental Works at Value Rental Car

At Value Rental Car we want to help you get to your destination quickly and safely. We offer clean and affordable rental cars for local driving in Los Angeles and Pasadena, with complimentary pickup and drop off service within seven miles of our two locations. If you’re a college student, we want to help you get on the road. We rent to drivers under the age of 21, and we offer cash and debit card car rentals. Check out some of our other articles to learn more about how car rental works.

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