If you’re planning to go overseas and renting a car using your credit card, you should understand how credit card car insurance works. Basically, all you need to do is pay for the full bill using your credit card, be named as the primary driver, and decline the car rental company’s collision damage waiver. You will then be qualified to get car insurance coverage from your credit card company.
Let’s take a look at the ins and outs of this wonderful feature and how we can use it to our advantage.
Decline the waiver being offered
Paying for the full bill with your credit card and naming yourself as the primary driver, basically goes without saying. However, you may be confused about whether to accept the collision damage waiver or not. Your car rental company will be offering you this collision damage waiver which will serve as your car insurance instead of what your credit card company is offering. You need to decline this waiver, to avoid paying the extra charge and to put your card’s rental insurance in effect.
Your card’s rental insurance can function two-fold
Once you have declined the waiver that the rental car company is offering, your credit card’s rental insurance will be your coverage for the duration of the rent. This insurance can cover you in two ways. One way is to have your card’s rental insurance as the primary coverage. This means that if you need to make claims, your credit card will be in full effect, and there is no need to utilize your personal policy. The other type is secondary coverage. When your personal policy is maxed out, your credit card company will step in to provide coverage.
What are the disadvantages?
As with most things in life, there are advantages and disadvantages. Despite providing the extra protection that would mean your personal policy’s premiums wouldn’t need to increase, this feature has disadvantages. It’s not available in all countries, so you have to check where you are going and if your card’s coverage applies to that country. Also, you may have to pay deductibles and process paperwork while being abroad, which is not ideal, especially if you’re on vacation.