Most of us have a notion that credit cards are bad and hence, will push us into debt. Isn’t it? But, in most cases, it doesn’t happen the way we think.

Credit cards can save you in dire situations if you’re aware of its proper usage. For example, if you’re traveling in a rental car and meet with an accident, credit cards can save you thousands of dollars.

Yes. that’s right! So, don’t be dumbfounded if you’ve just come to know about it.

Keep reading to know more about how credit card car rental insurance is helpful, what coverage does a credit card auto rental insurance policy offer and how credit cards can save you money in a car accident.

What is credit card car rental insurance?

Credit card auto rental insurance is offered by credit card companies. It covers the damage of a rental car in case of an accident. Generally, it pays for the Loss Damage Waiver (LDW) or Collision Damage Waiver (CDW).

Some credit cards offer primary coverage, whereas others provide secondary coverage.

To get the benefits of credit card car rental insurance, at first, check out whether or not your credit card issuer provides such services.

What you need to know about secondary and primary car rental insurance

Secondary auto rental insurance:

Most credit cards in the country offer a benefit known as the Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW), which pays for most of the damages of the rented car except certain costs like administrative fees or full loss of the rental car after the accident.

Most personal car insurance policies don't cover rental vehicles. If you meet with an accident in your rental car and your personal auto insurance has a rental car coverage, it’ll pay for the primary damages first.

After that, your credit card company will cover other major damages beyond what your personal auto insurance pays.

To get the benefits of secondary car rental insurance, you’ve to charge the total cost of the rental car to that credit card, which gives this type of coverage.

Primary auto rental insurance:

Only some selected credit cards provide primary rental auto insurance coverage. These type of cards pay for the loss of the rented vehicle, more than what your insurance covers. Primary car rental insurance pays for the damage to rental cars or rental car thefts. You’ll get primary car rental insurance only if you deny the rental car company’s CDW.

However, both secondary and primary car rental insurance policies exclude certain vehicles and operate its services in certain countries.

Credit cards can save your precious dollars in a car accident

How? Take a look below:

  1. Make the entire payment of the rental car with the credit card that has this facility.
  2. Book the rental vehicle with the credit card that’s providing this type of coverage.
  3. Keep all the receipts, which show that you’ve rented a car with your credit card.
  4. The name on your car rental contract should match with that of the primary credit card account holder.
  5. Refuse the car rental agency’s LDW or CDW so that your credit card company agrees to cover the costs.
  6. Check which issuer is offering more coverage, because different issuers offer different services.

Now, are you going to purchase a credit card? If so, then check out whether or not it’s providing rental car coverage.

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