We all do it.  We need to travel somewhere and car rental is a necessity. So we make the reservation, pick up the car and off we go.  Do you know what’s in the fine print in the car rental agreement?  We do and what you don’t know could cost you or save you some money.  Read on.


First, your personal auto policy probably includes coverage for a rental car from the property damage section, which means you will not have a deductible to deal with if there is a claim.  If the policy limits are high enough, it will cover the loss of use (because of the accident the rental agent can’t rent it until fixed) and the cost to repair the vehicle.  Your policy will not, however, pay for diminution of value (a decrease in market value because of the accident.)   It is more than likely you will have to settle up with the rental agency prior to leaving.  They may also require you to deal directly with your insurance company, meaning you will have to take care of the damage and file the claim. They may also freeze your credit card if you don’t take the loss damage waiver coverage. One last thing: your personal auto policy will have a maximum they will pay. If you rent a higher valued vehicle, be sure to check with the carrier as to what they’ll pay.


broken car windshieldIf you take the rental agency’s coverage and sustain a loss, it will not go against your auto policy.  The loss damage waiver will cover for diminution of value.  If you do take the coverage, read the contract carefully.  The contract contains conditions that must be followed, otherwise the contract is void and you’ll have no coverage and there will be no refund.  Some of these conditions include:

  • Authorized Drivers – Whoever signs for the car is the authorized driver.  You may need to add other drivers. If someone other than the authorized driver is behind the wheel,  the contract coverage may be void.
  • Driving on unpaved roads may also void coverage.
  • Being under the influence of any alcohol or drug — one drink or one dose of medicine may void coverage.
  • Not wearing seatbelts.
  • Leaving the car and failing to remove the keys or failing to close and lock all doors, car windows or the trunk.
  • Towing or pushing anything


To have this coverage come into play, you must pay for the rental car with your credit card and the card holder must be the primary renter.  You must also decline all the renter car coverages.  The credit card company usually has an extra charge on your card (possibly $20) for renting a car.  The length of coverage is also limited (30 days for American Express, 15 days in the US and 31 days for the rest the world for Visa) You need to get their paperwork (usually online) and read through with the exclusions carefully.

American Express will pay for reasonable damage to the car, towing, storage, loss of use and reasonable administrative fees up to $500.

VISA adds theft, vandalism and malicious mischief, loss of use, towing and windshield losses caused by debris.

This coverage is excess over your personal auto policy or the rental company in the US, excludes  expensive vehicles (often more than $40,000), exotic cars, antique cars, vans and trucks, pickups, off-road vehicles, recreational vehicles and SUVs.  Losses will not be covered if the terms and conditions of the rental company agreement are violated. (VISA will not cover fire, hail, lightning, flood or other weather-related perils.)