When you visit a car rental location to pick up a car, the agent may give you the “hard sell” to convince you to purchase liability coverage for the vehicle. But in some cases this coverage is not necessary, since you may already be covered by other policies. Some credit cards even offer liability coverage for rental cars.
What Is Liability Coverage?
A liability insurance policy for vehicles covers bodily injury and property damage involving a car. Liability coverage protects and reimburses other drivers, pedestrians and passengers on the road in case of an incident if it is the fault of the policy holder. When renting a car the rental agency suggests and in many cases requires the renter to have some type of liability coverage.
Credit Card Rental Car Protection
Some credit card companies offer rental car insurance policies as a perk to customers. The card holder usually must use the credit card to hold and pay for the rental. The customer must inform the credit card company if an incident occurs and submit a claim just as he would if it were a standard insurance company. Besides liability coverage for other parties, the credit card company's rental car protection may also cover theft and damage to the rental car.
If you have an auto insurance policy for your own car, it may cover issues involving a rental car. In that case you have two backup options in case of an incident — your primary insurer is the first point of contact and your credit card company makes up the difference. In some cases the credit card company may pay the deductible required by the primary insurer.
Before assuming your credit card company covers rental cars, call to ask about the exact terms. Find out how much the coverage will pay in the case of an incident and exactly what is needed for the claim process. In some cases, the credit card insurance coverage may not activate until the customer has had the card for a certain amount of time or used it for a certain amount of purchases. If you’re not comfortable with the coverage provided by the credit card you may want to consider the coverage offered by the car rental agency.