Anyone who has ever rented a car knows that cringing feeling that comes up when the rental agent asks whether you want to purchase rental car insurance. It’s made worse when the agent goes into a pitch about how most people’s auto insurance won’t cover all of the costs incurred should the car be damaged or stolen. This often gets to a lot of people who are fearful of having to come out of their pockets should they get into an accident; but the reality is that, between your own auto insurance and the coverage available through your credit cards, you are probably fully covered.

The problem is most people don’t know what their auto insurance actually covers and they haven’t looked at the fine print on their credit card agreement, so they end up paying for the car rental insurance at a rate that’s almost as much as the rental fee itself.

Double Check Your Credit Card and Auto Insurance Coverage

It is important to know that the car rental insurance coverage available on most credit cards is secondary coverage. That means that, before the credit card company pays anything towards a claim, primary coverage provided by your auto insurance must pay first. Then, any costs not reimbursed by your auto insurance may be covered by your credit card coverage. This usually applies to your deductible as well.

You need to double check with your auto insurance company to learn exactly how your coverage extends to car rentals. Most policies will cover the collision and liability on rental cars. And your personal accident insurance is usually enough to cover losses for medical expenses and accidental death. If your auto policy does not provide full coverage for the loss of personal effects, your homeowners or rental policy probably will. Everything considered your auto insurance policy should provide most of the protection you need.

Car Rental Fees May or May Not be Covered

There are some additional costs that can arise when you damage a rental car, and this is where your credit card rental car insurance coverage can come into play. It’s not unusual for the car rental company to try to hit you with additional fees, such as loss of use fees to recover lost revenue while the car is being repaired. They could also charge you for any loss of value to the car if the accident is recorded with Carfax. They could try to recover that loss of value from you. These additional fees and costs can add up to substantial sums, and it is not always clear whether your auto insurance policy will actually cover them. In many cases they are not fully covered or there is an additional premium charge to include them in your policy.

Most cards include these additional fees in their coverage; however, there still could be some exceptions so it would be important to check with your card company before renting a car. In some cases, the card company may require substantiation of the fees from the rental car company, and in most states the rental car company may not be required to do so. In the end, you are responsible for all fees and associated costs with the car rental repair, so, it would be important to make a call to your credit card company to see what exactly is covered.

So, while most credit cards do offer car rental insurance coverage, nothing is automatic. Both your auto insurance policy and your credit card coverage may limit the type of car you can rent, the length of the rental period and where you can rent it. Also, auto insurance and credit card coverage might not extend to business-related car rentals. Before your next car rental, make the calls to your auto insurer and your credit card company as it could save you a lot of hassle.

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