At O1ne Mortgage, we prioritize educating our clients on various financial topics to help them make informed decisions. In this article, we will delve into the concept of credit card rental car insurance, how it differs from your auto insurance policy, and explore some alternatives. If you have any mortgage service needs, feel free to call us at 213-732-3074.

What Is Credit Card Rental Car Insurance?

Credit card rental car insurance is a benefit offered by many credit cards, providing coverage for rental cars when you pay with your card. This coverage, often referred to as collision damage waiver (CDW) or loss damage waiver (LDW), can help cover costs related to theft or collision of the rental vehicle. However, it comes with limitations and restrictions that you should be aware of.

How Does Credit Card Rental Car Insurance Differ From Your Auto Insurance Policy?

While both credit card rental car insurance and personal auto insurance provide coverage for rental cars, they differ in several ways:

• Coverage Types: Credit card insurance typically covers collision, theft, and loss of use, whereas personal auto insurance also covers personal injuries, property damage, and uninsured or underinsured motorist coverage.
• Deductible: Credit card insurance usually has no deductible, while personal auto insurance can have deductibles up to $2,000.
• Availability: Credit card insurance is available in most countries with some limitations, while personal auto insurance is typically limited to the U.S. and Canada.
• Activation: To activate credit card insurance, you must use your credit card to pay for the rental and decline the rental agency’s coverage.

What Does Credit Card Rental Car Insurance Cover?

Credit card rental car insurance generally covers:

• Damage to the rental vehicle sustained in a collision
• Theft of the rental vehicle
• Loss-of-use charges incurred by the rental agency while the vehicle is being repaired or replaced

However, this coverage is typically secondary, meaning you must first file a claim with your personal auto insurance policy. If you don’t have a personal auto policy or if your card offers primary coverage, the credit card insurance will be your primary protection.

What Does Credit Card Rental Car Insurance Not Cover?

Credit card rental car insurance usually does not cover:

• Personal injuries and property damage you cause in an accident
• Medical expenses for you and others in your vehicle
• Loss or theft of your personal belongings
• Exotic car brands, motorcycles, mopeds, recreational vehicles, and large passenger vans
• Wear and tear or mechanical breakdowns

Alternatives to Credit Card Rental Car Insurance

While credit card rental car insurance can be beneficial, you may want to consider other forms of protection:

Personal Auto Insurance Policy

If your credit card’s coverage is secondary, your personal auto policy can provide primary coverage. Conversely, if your credit card’s coverage is primary, your personal auto policy can cover aspects not included by your card.

Homeowners or Renters Insurance

These policies can cover personal belongings left in a rental vehicle, which neither your credit card nor personal auto policy typically covers.

Health Insurance

Health insurance can help cover medical expenses if you or someone in your rental vehicle is injured in a collision. However, you will still be subject to your health plan’s deductibles and coverage limits.

Rental Car Agency’s Coverage

While rental agency insurance can be expensive, it may be necessary if your personal auto policy doesn’t cover you in the country you’re visiting. Consider purchasing the rental agency’s liability coverage and injury protection, and possibly personal effects coverage if you plan to leave belongings in the rental car.

Choose the Right Credit Card for You

Credit card rental car insurance is just one of many valuable benefits that credit cards can offer. Other benefits include rewards, 0% APR promotions, and travel perks. When choosing a new credit card, compare your options to find the best fit for your needs.

Contact O1ne Mortgage for Your Mortgage Needs

At O1ne Mortgage, we are dedicated to helping you with all your mortgage service needs. Whether you’re looking to buy a new home, refinance your current mortgage, or need advice on mortgage options, our team of experts is here to assist you. Call us today at 213-732-3074 to speak with one of our experienced loan officers.