ST. LOUIS, Mo. (First Alert 4) – If you’re planning to rent a car for a trip this summer, should you buy the rental car agency insurance? How much insurance does your credit card offer?
Let’s break it down.
The rental car agency insurance will usually cost $30 to $60 a day in addition to your daily rental rate.
It’s actually a loss or collision damage waiver that releases you from responsibility. Plus it can cover injuries to you and your passengers, and items that are stolen from the car.
Many consumer advocates say you don’t need to pay for it if you’re already paying for personal auto insurance, as long as you are covered for liability, comprehensive, collision and medical. Homeowners’ and renters’ insurance can cover items that are stolen from the car.
Many credit cards also now offer rental car coverage, but you need to understand what is covered. Most credit cards offer what’s called “secondary” coverage. That means it kicks in after your auto insurance.
“Let’s say your insurance policy covers you first, but you’re subject to a deductible. The secondary insurance by your credit card company could help you cover that deductible,” explained Sara Rathner, credit card expert for NerdWallet.
Only a few credit cards offer “primary” coverage.
“That will cover you first before any auto insurance policy you might have. And if you don’t own a car and don’t have an auto insurance policy, then a card’s secondary coverage would become primary,” said Rathner.
Credit cards usually cover towing and “loss and use,” which compensates the rental company while the car is being repaired.
But NerdWallet says credit cards don’t usually cover liability for damage to other property or cars or medical costs. They also don’t usually cover exotic cars, motorcycles, trucks or car-sharing services.
To use a credit card’s car rental coverage, you must pay for the rental with that card, waive the rental company insurance, and list all drivers on the contract.
“Because if you make the wrong decisions when you rent the car or pick up the car at the rental counter, then you’re not actually going to coverage from your card,” said Rathner.
If you don’t have a personal auto insurance policy, and you rent frequently, Consumers’ Checkbook says you can buy a “non-owner” policy from an insurance provider.
For less frequent renters, Consumers’ Checkbook says companies like Allianz, Travel Guard, and some travel booking sites, such as Priceline, offer primary insurance for car rentals for less than $20 a day.
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