Credit Card Benefits
Your credit card company may offer rental car insurance coverage, but that only extends to a normal, everyday car. Something like a Porsche or Lamborghini likely won’t qualify.
Visa terms will often exclude what it calls “exotic” or “antique” cars. Visa’s standard terms name brands such as Ferrari, Lamborghini, McLaren, Porsche and Rolls Royce. But individual card issuers may set different terms for coverage. So you’ll want to check with your credit card company before assuming you have coverage.
You’ll also want to look for anything related to sticker price. Some cards may only cover vehicles with sticker prices up to a certain amount. This could pose a problem if you’re trying to rent a luxury vehicle. As an example, Chase Sapphire Preferred card benefits don’t extend to vehicles with a sticker price of over $125,000.
If your card company gives you exotic car coverage, it may not cover the entire cost of the vehicle. The Sapphire Reserve Card has a $75,000 cap on primary rental car coverage, which means the issuer pays you before your own auto insurance. The $75,000 cap applies to most rental vehicles.
Visa’s benefits cover the cost of the car if it’s stolen or damaged while in your possession. Don’t expect your card to cover medical bills for those injured in an accident, damage to other cars involved in an accident, your personal liability, and diminished value–the resale value of the car, which drops after a crash.
Most credit cards come with conditions, which if not met, nullify the coverage. These can be difficult to catch sometimes, because, well, they’re in the fine print. Under Visa’s standard terms, credit card benefits only apply when you use the card for the entire rental and don’t use the rental company’s collision damage waiver (CDW). The rental can only last up to 15 days inside your home country.
Your Own Auto Insurance
You can turn to your own auto insurance to make up for some of what your card excludes. But the protection only goes so far. If you are renting a car that has a MSRP (Manufacturer’s Suggested Retail Price) over $100,000, some insurance companies, like Progressive and GEICO in California, will only cover up to the cash value of your own best car. This can mean the difference between getting a check for the full price of the car and getting a check for a fraction of that. There is no sliding scale for older cars; the policy depends solely on the original MSRP. So a depreciated, used car worth under the threshold may still not be covered. The limit isn’t on your insurance card. In the case of Progressive, this information is in a separate endorsement that most policyholders never open. Some auto insurers don’t impose this stipulation. All policies have different limits, exclusions and terms.
GEICO’s California contract also has three big exceptions. It does not cover diminished value. It does not cover rental agreements over 30 days. And it does not cover regular repeat rentals. Coverage on GEICO insureds for autos you don’t own is excess over other insurance. If nobody else covers the car, GEICO’s excess coverage becomes primary.
Suppose you call the insurance company, and the rep tells you your rental is covered. Well, surprise. You and the rep may very well be wrong. That rep hasn’t read the contract. The contract decides, not the insurer rep. A call to the insurer might tell you only one useful thing, and this is the question to ask: Will the carrier pay actual cash value on this specific car if it’s totaled? You may want to record the answer.
Read the documents closely. Read the declarations page, which describes all your coverages and their limits. Read the endorsement list, a list of all those endorsements, or riders, that modify your coverage. With the card: Read the summary of benefits.
The Renter’s Financial Responsibility
New York law says the rental company can’t charge the renter for “loss-of-use.” This means the rental company can’t make you pay for lost profits from the car being out of service. The law also says that the renter’s financial responsibility is capped at the lower of the repair cost or the car’s fair market value. But New York doesn’t cap the daily price for damage waivers on cars with an MSRP over $50,000. The price follows the market value.
Florida works differently. If you are involved in an accident in Florida, the car rental company’s liability and PIP insurance is primary, unless their contract says otherwise in at least 10-point type on the front. That means that their insurance has to pay before yours can.
If you find yourself with a loss-of-use bill in New York, mention the law to the rental company. This does not need to involve a lawyer, just reading the fine print in your contract.
