The 10 Most Common Rental Car Insurance Pitfalls

According to surveys, more than 2 out of every 5 people who rent cars are unsure about (or totally confused by) the corresponding insurance coverage. They don’t know if their standard auto insurance policy is sufficient, whether they should purchase additional insurance from the rental company, or if their credit card’s car rental insurance is adequate.

The fact that every insurance policy comes with plenty of fine print makes renters even more nervous. They worry that there may be loopholes in coverage that can come back to haunt them – and they’re right. Here are ten of the most common insurance pitfalls to consider when renting a vehicle.

  1. Length of rental. Visa’s rental insurance won’t cover rentals of over 15 days in the U.S. or more than a month in other countries. This is important to know if you’re planning on taking an extended road trip.
  1. International exclusions. Speaking of foreign travel, some credit cards don’t cover vehicle rentals at all in certain countries (though it’s unclear why not). Banned nations may include Jamaica, Italy, New Zealand, Ireland, Australia, and Israel.
  1. Non-authorized drivers. If someone other than the driver listed on the rental agreement is driving when a wreck occurs, the rental company’s collision damage waiver may not cover it. So be sure to include all authorized drivers on the form at the rental counter.
  1. Types of vehicles. Believe it or not, certain types of vehicles are excluded under some credit card insurance coverage. American Express excludes SUVs, while Visa won’t cover pickup trucks, sports cars, or full-size vans.
  1. Incorrect payment method. It stands to reason that credit cards’ rental insurance only works if you pay for the rental car with said credit card. However, this could apply only if you pay the base car rental rate – and you may be out of luck if you redeem points or have a coupon for a discount or a free day.
  1. Road type restrictions. In the fine print of rental insurance waiver agreements, coverage might be voided if your drive the car on unpaved roads. This will affect vacationers who may go camping, visit rural areas, or drive into a park or preserve.
  1. Rental agreement violations. Speaking of fine print, there are many other provisions in your vehicle rental agreement that you must obey (such as no driving under the influence or using the car for commercial use). If you don’t, your rental insurance becomes null and void.
  1. Traffic law violations. Almost everyone violates at least one traffic law per day in some way. If the rental company discovers that you did (via a citation or your admission of guilt), any damage to the vehicle won’t be covered by the company’s additional insurance.
  1. Theft (if keys are left inside). If the rental car is stolen because you left the keys inside it, then additional rental insurance won’t pay for the loss. So unless you are absolutely certain that a thief found the keys in the vehicle and used them to steal it, do not speculate about whether you left the keys in the car.
  1. Loss of use. This is the biggest exception for consumer auto insurance policies which also cover rental car use. Rental companies may try to charge a “loss of use” to the renter on the grounds that they can’t rent out the car while it is being repaired (or replaced, if it was stolen).

So what should you do? It all comes down to how solid your standard auto insurance policy is and how safe you want to feel in case something unexpected happens. But there’s one thing you should always keep in mind: whichever option you choose, you must read the contract carefully and be aware of what you are signing before committing to an agreement.

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