Sort of a loosely defined term, credit card car insurance defines what most major credit cards will (sort of) cover if damages are not covered by your normal insurance policy. This idea is generally used in relationship to rental cars that require extra fees to be paid in the event of an accident or damages to a car that doesn’t belong to you. Recently, many rental car companies have been tacking on extra fees that will result in the event of an accident, and these generally aren’t covered by auto insurance policies. Many credit card companies will say that credit card insurance will protect you in the event of some accidents, but this is not always true. Credit cards including Visa and Diners Club have no-cost rental car collision and theft protection, while MasterCard, Discover, and American Express only offer this feature to those with better credit levels.
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Your credit card is supposed to pick up costs that you are charged in the event of an accident that is not covered by your current auto insurance plan. Items including deductible, towing charges, and other fees organized by the rental car agencies will generally fall under credit card car insurance and will be automatically billed to your major credit card. In some cases, once these are billed to your account, they will be reimbursed the entire cost of the damage and can even cover you in the event that you don’t have personal auto insurance.
Because of these factors, many financial experts believe that buying credit card car insurance is a great way to save money in the long run and avoid large fees as a result of a rental car company’s collision waiver. In most cases, regardless of whose fault it is, those with rental cars will be forced to pay a large sum of money in the event of an accident. With credit card car insurance, much of this can be paid for without hassle and can sometimes be reimbursed in some cases. In order to get credit card car insurance, there are a few steps that must be followed:
- The customer must decline the rental car company’s collision waiver.
- In the event of avoiding large fees, the customer must also be the primary renter of the car.
- The car must be paid in full and it must be paid using a card that offers the necessary credit card car insurance protection.
Although this might seem like a fail-safe way to be protected against accidents with a rental car, there are a few caveats that must be kept in mind. Many exclusions, limits, and requirements may be issued by the rental car company. Not everything under the sun is covered by credit card car insurance; when it comes to charges of damage costs, credit card car insurance will have gaps in coverage. An example of this might include the company paying for the price of the damages, but not paying other fees associated with the transaction. When purchasing or planning on using credit card car insurance, the devil is in the details. If a credit card company won’t cover certain aspects of damages, it will say in the fine print and won’t often be explained while speaking to a representative.
Other credit card car insurance policies may say that they cover fees, but this only occurs in certain circumstances. In examples of certain fees, they will need proof from the rental car insurance company for items such as loss-of-use fees and other items of that nature. When it comes to purchasing certain fees for rental cars and other forms of insurance, they will explain that coverage is within reason. The only problem is that it’s up to them to decide what would be a reasonable expense and what you will have to pay out of your own pocket.
For those who are looking for extra coverage via credit card car insurance, it might be wise to do some investigating before making a final decision. Like any form of added coverage for special items, it depends on the likelihood of a disaster occurring and whether or not you feel the extra money is worth it. Credit card car insurance can be useful for covering a vehicle that is not owned by you, but be careful that it offers the coverage you need and that you won’t get stuck with the bill.
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