Using Credit to Insure a Rental Car
Motorists in most states are required to purchase auto insurance or have enough assets to cover losses following an accident.
What happens when they leave their state or the U.S. altogether? Rental car insurance is one way to protect against expenses associated with a collision or theft for those who borrow a set of wheels. There are several factors a consumer should consider, however, before signing up for such coverage.
Some individuals may already be covered through their credit card, according to a recent report by Investopedia. This type of insurance may serve as a primary policy or pick up where the motorist's auto insurance leaves off. In order to take advantage of this coverage, drivers need to pay for the rental with the insuring credit card.
"The dollar amount provided within each policy may vary," the report said. "In the event of an accident, some rental companies charge fees, for example administrative processing, diminished value and loss of use, which may not be covered by all credit card policies."
There are some limitations associated with credit card rental car insurance, according to the report, making it exceedingly important to review such protection before taking it out. It's important to review whether this coverage can serve as a primary policy. It's also necessary to make sure that the kind of car rented will qualify for such coverage. Some sports cars, antique cars or campers may not be eligible.
Consumers who rent cars for long periods of time and across state lines should also review their insurance limitations. Different credit card companies implement different restrictions on the number of days a car can be covered for. Some become void if a vehicle leaves areas specified in their rental agreement.
In addition to credit card insurance, some auto insurance policies cover claims for rental cars. Therefore, it is important to call both organizations before approaching the rental counter, according to the Insurance Information Institute.
"The decision to buy rental car insurance or any other insurance product should not be a snap decision," Jeanne Salvatore, vice president of consumer affairs for the III, said. "Unfortunately, with long lines at rental counters during the summer months, some people panic when asked if they would like to buy or decline car rental insurance."
While their insurance company may not be liable for claims, negative rental car incidents can damage a consumer's insurance score and cause their premiums to increase.
