Relying on the insurance provided by a credit card to cover a rental car can be risky business. That's particularly true if you haven't read the fine print to understand the limitations.
Exceptions and exclusions could end up costing you hundreds or even thousands of dollars if you assume you're covered but find out later you're not.
"Ultimately the contract that is enforceable is your card member agreement," says Ben Woolsey, director of marketing and consumer research at CreditCards.com, a consumer resource website. The agreement provides all the granular details of what the card company will do, and what you're required to do if you need to file a claim."
Most major credit cards provide collision and theft insurance coverage if you charge the entire cost of the rental on the card and you decline the rental company's coverage.
Be aware that most credit cards won't fully cover you for a long-term rental. The coverage for Diners Club and Discover cards is limited to 31 days, and for American Express is limited to 30 days. Visa and MasterCard offer coverage for 15 days.
The insurance often is supplemental to your primary auto insurance policy, which means it may cover your deductible and some of the expenses your primary auto policy may not cover.
Rental company charges
Be sure to also check the credit card's language regarding payment of the rental company's "loss-of-use" charge. Rental companies often will charge you if a car has to be repaired and cannot be leased out. The credit card insurance, in some cases, only covers this charge if the rental company provides a utilization log to show it has few other cars available to rent.
But some rental companies consider the logs confidential. If the card company can't get the logs it may refuse to pay this fee, leaving you on the hook for hundreds of dollars.
Other pitfalls to look for include the types of vehicles covered. Most cards exclude vehicles valued at more than $50,000 or $75,000. Essentially, most cards will cover the typical car a family might use for vacation or a businessperson would drive. Also know that most cards don't cover pickups.
Many also exclude certain countries.
The fine print
The bottom line is if you plan on relying on this coverage, carefully read the fine print of your credit card agreement. Confirm exactly how long you're covered and what the exemptions might be.
You can call the card's customer service line to get details, but it's always best to confirm your coverage in writing.