When it comes to credit card and car rental insurance, you need to know what is covered and what’s not.
What is credit card car rental insurance?
Car rental insurance is usually an extra service you pay for with an eligible credit card. Generally, the insurer will reimburse you for the amount of any collision excess that you have paid if you’re under any car rental agreements with a car rental service or business. The car needs to be registered in Australia and affiliated overseas locations where you are the hirer or the joint hirer and you were driving the vehicle when the collision occurred. There will be a number of situations when your insurer may not reimburse you for your costs, so it’s always good to read the terms and conditions to know exactly what you’re covered for.
Credit Cards with Car Hire Insurance Cover
What are the types of credit card car rental insurance?
There is usually one type of car rental insurance that you can get with your eligible credit card. The insurer could offer free collision and auto theft coverage, as well as a towing service. However, some credit cards don’t offer free supplementary liability insurance which covers damages to other vehicles, property or people so it’s important that you know this before signing the rental car contract. Luxury vehicles may also be exempt.
How does credit card car rental insurance work?
Car rental insurance is designed to reduce your excess if you have an accident in a hired or rental car. Typically, car rental companies charge about $20 to $30 per day per car hired for this type of insurance. If you choose not to take up this cover, the excess in damages to a rental vehicles could accumulate to $2,000 to $4,000. Credit card car rental insurances are designed to cover you for this excess, by paying a much lesser amount. For the cover to be valid, the person doing the claim needs provide the formal rental agreement and comply with the policy’s terms and conditions.
ANZ Car Rental provides Gretel with cover up to $2,400 or less for an excess of $350.
This means that if she is ever in the event of a covered collision, Gretel only needs to pay the first $350 given that the damage doesn’t exceed $2,400.
If the excess exceeds $2,400, ANZ Car Rental would pay $2,400 less the excess of $350 to a total of $2,050. Gretel is required to pay the balance of any damage that exceed this amount.
Pros and cons of credit card car rental insurances
- Peace of mind. Feel comfortable when you’re driving on the road with a rental car.
- Good value. Car rental insurance helps make hiring a car more affordable by reducing your excess if you have a covered accident.
- Terms and conditions. There are an abundance of rules as to what can be defined as a ‘covered accident’ and there will be a maximum in place so you may not be fully covered.
Things to avoid about credit card rental insurance
Not asking your bank if in doubt
Ask your bank under what situation the policy will apply. For example:
- Do you need to pay for the car cost or travel costs to the credit card in order for it to take effect?
- Does it still take effect if you pay for the car using a standard waiver price or do they think you will take up any more excess reduction or insurance options that are available from the car company.Also, if you’re renting anything something that is not a normal car, like a regular hatchback or normal four-door sedan, you’ll want to see if the coverage still applies.
- What does the company cover exactly?
- Do they encapsulate theft or only damages?
- Do they pay for just the extra cost that you need to pay?
- Or is there any potential deductible cost paid out to the car rental organisation because of any loss or damage you cause to the vehicle?
Frequently asked questions about credit card car rental insurance
Does the Commonwealth Bank Platinum Awards credit card offer rental car insurance?
Yes, you are covered up to $2,250 in excess payments.
Can my HSBC Platinum credit card cover insurance for car rental?
Yes, you are covered up to a limit of AUD $3,000 in excess payments.
What if I want to rent a car in Australia?
If you’re visiting Australia, confirm with your local credit card issuer and check if your card already has travel insurance perks that include car hire cover. That is a common feature of many Gold as well as Platinum cards that are also part of their International Travel Package for Insurance. There is sometimes a clause known as a Rental Vehicle Excess Cover that can usually give you between $2,000 and $5,000. It is a good idea to always take a look carefully at fine print or phone your bank directly to clearly mark out any irregularities or ambiguities.
It is always important to do your due diligence when comparing credit card offers, especially those with added extras such as Car Rental Insurance.