Credit Card Rental Car Insurance

Posted By Tate Dwinnell |  Subscribe in a reader | Comment 2

One thing I’d like to do more of here at the blog is expand a bit beyond profit opportunities in the stock market and write a bit more about finance and money saving tips many of which I come across in my own reading or experiences.   After all, being a good self investor and managing your finances well go hand in hand and both help you to achieve the end result, which is a life void of financial constraints and the freedom to live where you want and do as you choose.  During my recent trip to the east coast for a wedding, my girlfriend and I needed a rental car for a small road trip we had planned to take up into Massuchusetts, New Hampshire & Maine.  Now I consider myself a good driver (don’t we all?) and have NEVER been in accident … ahem, that was my fault.  So, when the agent asked if I’d like the rental car insurance at nearly $30/day of course I quickly declined.  Days later I was pulling out of a small parking lot and caught the edge of the truck behind me .. go figure!  Of all the times … It was sizable dent in my left bumber, no damage to the other guy who happened to have one of the heavy duty, solid steel bumpers on an old chevy pickup.  Sowhat do I do now?  I’m sure I was in the same boat as many not knowing what do other than contact my insurance company and get an estimate to get the thing fixed.  The hope of getting it fixed myself for a couple hundred bucks quickly vanished when the repair shop came back with an estimate of $900 to replace the bumper.  Yowza!  So much for avoiding the insurance company and the rental company.  Even with a $500 deductible, a claim would probably have to filed, not to mention my insurance rates go up.  It’s some coverage but I’m still out a decent chunk of  change.  Aha!… but there is another option to me.  After discussing the situation with the insurance company, the agent recommends to me that I contact my credit card company which happens to be Visa.  Apparently, unbeknownst to me, many people have rental car insurance through their credit card companies.  I’m not sure what the requirements are for this coverage but if you’re traveling, contact your credit card company and find out what your coverage is.  What Visa does for me is act as secondary coverage.  In other words, if my insurance company would cover this incident (which they will), then Visa will pay me the deductible PLUS any additional charges from the rental car company for loss of use.  Going this route, the only charges I’m responsible for is the increase in my insurance rate for filing the claim.  It should be noted that if I don’t file a claim with the insurance, Visa still only covers up to what the deductible would have been, in this case $500.  So, if the damage is $500 or less of course I won’t file a claim and will just have Visa pick up the tab.  If more, I have to factor in what the increased insurance rate will be and decide if filing a claim makes sense.  If I didn’t have a good auto insurance policy and there was no coverage Visa would have acted as primary coverage and they would have picked up the entire tab.  Either way, having this credit card coverage is a fantastic perk that I didn’t know about previously.  Hopefully, this is a heads up to a few others out there.  Bottom line:  Find out what your coverage is in a rental car through both your insurance company and your credit card company, DECLINE the rental car insurance from the rental agency and ALWAYS pay for the car with a credit card that offers coverage. 

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Comments on Credit Card Rental Car Insurance »

September 10, 2007
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Personal finance at KMull.com @ 7:20 am

[…] Self Investors talks about Credit Card Rental Car Insurance. This is a decent article, but please use paragraphs! […]

February 29, 2008

jskell @ 10:48 am

Bottom line: Find out what your coverage is in a rental car through both your insurance company and your credit card company, DECLINE the rental car insurance from the rental agency and ALWAYS pay for the car with a credit card that offers coverage.

Keep in mind that most CC’s offer only SECONDARY insurance, which means you will have to put a claim into your own insurance company, therefore running the risk of higher rates for a few years. Also double check because rental car companies will charge “down time” or loss of use charges if the car needs repairs.

If only renting for a week or less, it may make better sense to purchased the insurance through the rental company.

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