5 Credit Card Loopholes for Rental-Car Insurance – and One Great Option

What's Hot

The Most Sinful City in the U.S. Is … (Hint: It’s Not Vegas)Family

How a Mexican Tariff Will Boost the Cost of 6 Common PurchasesFamily

This Free Software Brings Old Laptops Back to LifeMore

How to Protect Yourself From the ‘Can You Hear Me?’ Phone ScamFamily

Report: Walmart to Begin Selling CarsCars

Where to Sell Your Stuff for Top DollarAround The House

Is Your TV Tracking You? Here’s How to Tell — and Prevent ItAround The House

11 Staging Tips to Help You Get Top Dollar When Selling Your HomeAround The House

21 Restaurants Offering Free Food Right NowSaving Money

20 Simple Hacks to Make Your Stuff Last LongerAround The House

4 Car Insurers That Might Raise Rates Even When the Accident Wasn’t Your FaultCars

How to Invest If Trump Kills the ‘Fiduciary Rule’Grow

12 Surprising Ways to Wreck Your Credit ScoreBorrow

9 Secret Ways to Use Toothpaste That Will Make You SmileAround The House

The 2 Types of Music That Most Improve Dog BehaviorFamily

Rental-car insurance is a confusing minefield of options and exclusions. Here's how to make sure you're covered without getting gouged.

Did you know that the best-selling vehicle in the United States is excluded from Visa’s rental car coverage? That vehicle is a Ford pickup truck, and travelers find out too late that all trucks and open-bed vehicles aren’t eligible for the standard coverage offered free by some  credit card issuers.

After rewards, rental-car insurance may be one of the most valuable benefits that your credit card offers. With the exception of a few products aimed at sub-prime borrowers, nearly every card offers rental-car insurance as standard. By declining the coverage offered by the car rental company, you should be covered by the policy included with your credit card.

Nevertheless, it’s important to understand that there are five key loopholes in these policies that can leave you exposed to liability at the worst possible moment. Fortunately, one card issuer has stepped up to provide optional coverage at a surprisingly affordable price.

The 5 holes in your credit card’s rental car insurance

  1. Types of cars. In addition to pick ups, Visa and others exclude full-size vans and many vehicles considered to be sports cars. American Express specifically excludes SUVs. While some people reserve these types of cars, others are merely upgraded at the last minute when their first choice is unavailable. Before renting your vehicle, make sure it is not excluded.
  2. Territorial limitations. Credit card companies seem to have a problem with countries that begin with the letter “I.” That’s the only way I can fathom why most rental car insurance policies excluded Israel, Ireland, and Italy. But Iran and Iraq aren’t excluded, so even that explanation makes no sense. Other exclusions can include Jamaica, Australia, and New Zealand. No matter where you plan on renting a car, make sure the card you use will cover you there.
  3. Method of payment loophole. The rental-car insurance offered by your credit card is only valid when you use your card to pay for your rental. That sounds simple enough, but how is that used in practice? What happens when you use an award from a loyalty program, or a coupon for a free day? Even though you might use your credit card to reserve your car and pay for taxes and fees, its insurance won’t cover you if don’t pay the base rate with your card. It’s for this reason that I never redeem points or miles for a free rental car, since the extra insurance needed diminishes the value of the award. Fortunately, the use of a simple coupon code shouldn’t invalidate your coverage, so long as you are still paying for most of the rental period.
  4. Rental length. Ever thought of renting a car with unlimited miles for an epic cross-country adventure? That works fine – unless you intend to be gone more than 15 days. If so, you aren’t covered by Visa’s policy, which excludes “Rental periods that either exceed or are intended to exceed fifteen (15) consecutive days within your country of residence or thirtyone (31) consecutive days outside your country of residence.”
  5. The agency agreement exclusion. All rental car coverages exclude any actions that violate your rental-car agreement. While it sounds reasonable to exclude such things as commercial use or using the car to commit a crime, did you know that most agreements prohibit driving on unpaved roads? Consider that next time you rent a car in a rural area or to visit a national park.

One great optional policy

Except for the agreement exclusion, the only way around most of these issues is to rely on the coverage from your existing car insurance policy or purchase the overpriced coverage that the rental car company offers.

This coverage is so expensive that it can even exceed the price of the rental – and it can cost hundreds of dollars for a longer trip. Fortunately, American Express offers a fantastic option: its Premium Car Rental Coverage.

For $24.95 per rental, they’ll cover you for up to 42 days with no deductible. Although this policy covers trucks and SUVs, it still excludes rentals in some countries. To enroll, you sign up your card once, and this policy is automatically applied when you use that card to rent a car and decline additional coverage.

You wouldn’t drive without insurance at home. Don’t do it when you rent a car.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!


Read Next: 21 Restaurants Offering Free Food Right Now

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,819 more deals!