We are often consulted or asked for advice on credit card car rental insurance and more specifically, which part of it covers us. The world of insurance is in itself quite intricate and full of legal intricacies and clauses that nobody reads.

When we add the word car rental insurance to the concept of car rental on vacation or for business, the idea is complicated exponentially.

What is credit card coverage on rental cars?

Credit cards basically offer us insurance against collision and theft, no more, no less. This means that they do not cover any type of damage to third parties, and they will not protect us in a civil manner. The only thing that will be cover will be the car and its exterior parts against collision or accidental damage, as well as in case of theft. In no way is a wheel cover with a nail or an electrical fault that goes the other way.

In addition to damage, credit cards will generally provide us with additional coverage against administrative costs associated with the damage, business interruption expenses (the time the car is off the market and the company loses money), and some related costs. with the accident and its trailer, if any.

This means that civil liability (the part in which we response for our actions against damages to others) will not be contemplate in any way in the credit card and its insurance. This service is call Collision Damage Waiver around the world in English. Which means that we decline collision and damage coverage and accept liability.

How to use VISA, Mastercard and AMEX car rental insurance

The three credit card companies offer different services but with one thing in common, the method of accepting your insurance. In all cases we will have to reject the collision and damage insurance offer by the company or even our own (if we are cover).

By carrying out this simple, but necessary procedure, we will be accepting that the credit card and its insurance will be the first to respond for us in case of damage to the property that we are renting. Please note a very important issue, different cards, even under the same logo (MC, Visa or AMEX) have different rules. Some cards require that we pay the entire reservation with it, some that we only start it and others that we pay at least part of it.

Not only that, Visa Infinite may cover countries and/or have different rules than Visa Signature or Platinum. But it can go further and happen that Mastercard in Colombia does not have the same requirements as crossing the border in Panama or even in Mexico. It is very important to ask detailed questions to your issuer or read the rules online.

It should be clarify that not all credit cards offer it, nor for the same amount. These fluctuate between $50,000 and $100,000, and almost unrestrictedly clarify that they will not accept damages due to negligence (being drink at the wheel), nor do they insure luxury cars or supercars (Ferraris, Porsche, etc.), nor civil liability… among many other clauses. Which means that if we go to a country where we are cover, and we rent a Toyota, Mazda, Volkswagen, Honda, Ford, etc. we will almost certainly be cover if we follow the instructions to the letter.

With this it is important to clarify that not all countries will be covered by all cards. Some issuers do not provide coverage in Italy, Ireland, New Zealand, Israel, Jamaica, Spain, Portugal, Australia, among others. This is addition to the countries that are within the group of sanctions of the United States. Always, but ALWAYS, check with your issuer before doing so. A Visa card will be able to cover us in Ireland, while another will not… at the same time that some Mastercard will offer coverage in Italy and others will reject it.

What do you consider damage and where can it hurt us?

The damages that we always have in mind are those from a collision with a concrete wall or another car. However, these are not even close to the damages where the most money is generate by car rental companies.

They have to keep in mind that a scratch of a few inches or centimeters could require painting an entire panel to make it new. And this idea and concept is what rental companies will use to charge us at the time of any type of scratch or cosmetic damage.

One place that is often forget is the alloy wheels of vehicles. Because few bother to photograph or even get video of car wheels. Companies have learned to get hundreds or thousands of dollars/euros for the same scratches or damage to the same wheels. Believe me, the costs for the damage to the rims or tires will not be cheap. And will come tied to a whole story of how they also lost money by not renting the car for several weeks.

If we have insurance with credit card, the crystals would be covered, as long as the damage is accidental. While I recommend checking with your issuer prior to rental. I can almost certainly assure you that collision insurance should cover windows and wheels.

A phantom cost that will come back to haunt us if we are find without coverage. When renting a car will be the charge for the decrease in the market value of the car. This makes sense in an efficient market. if we had two identical vehicles. But one has had a declare accident and has been repair. While the other is in original condition, for which car would a reasonable person pay more?  They can use this against us and charge us for diminish value.  Even though no report will be make. And the settlement may be extremely minor.