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Understanding Credit Card Rental Car Insurance

At O1ne Mortgage, we prioritize consumer education on credit and finance. This post aims to provide an objective view to help you make informed decisions about credit card rental car insurance. For any mortgage-related needs, feel free to call us at 213-732-3074.

What Is Credit Card Rental Car Insurance?

Credit card rental car insurance is an alternative to the coverage offered by car rental agencies. While it won’t cover all potential risks in an accident, it can provide some protection. This coverage often comes with limitations and restrictions, so understanding how it works can help you decide if it’s a benefit worth using.

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

Credit card rental car insurance, also known as collision damage waiver (CDW) or loss damage waiver (LDW), can be activated by paying for the rental car with your credit card and declining the rental agency’s coverage. This insurance may cover some or all costs related to theft or collision, but it varies greatly from personal auto insurance or rental agency insurance.

What Does Credit Card Rental Car Insurance Cover?

Typically, credit card rental car insurance is secondary, meaning you’ll need to file a claim with your personal policy first. Your credit card benefit will cover what your personal policy doesn’t, usually just the deductible. If you’re traveling abroad, don’t have a personal auto insurance policy, or your card offers primary coverage, your card’s coverage will be your primary protection.

Generally, credit card rental insurance covers:

• Damage to your rental vehicle in a collision
• Theft of the rental vehicle
• Loss-of-use charges

However, there’s a limit to the coverage amount, so you may still incur some costs if the rental vehicle is expensive.

What Does Credit Card Rental Car Insurance Not Cover?

Credit card rental car insurance typically doesn’t cover:

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

There may also be limitations based on the circumstances of the accident.

Alternatives to Credit Card Rental Car Insurance

While your credit card’s CDW coverage can save you money, consider other forms of protection:

• Personal Auto Insurance Policy: Can provide secondary coverage for aspects not covered by your card.
• Homeowners or Renters Insurance: Covers personal belongings left in a rental vehicle.
• Health Insurance: Covers medical expenses in case of injury.
• Rental Car Agency’s Coverage: Consider buying liability coverage and injury protection if your personal auto policy doesn’t work in the country you’re visiting.

Choose the Right Credit Card for You

Credit card rental car insurance can be valuable, but credit cards offer many other benefits like rewards, 0% APR promotions, and travel perks. If you’re looking for a new credit card, use comparison tools to find the best fit based on your credit profile.

For any mortgage-related needs, call O1ne Mortgage at 213-732-3074. We’re here to help you make the best financial decisions.

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