The purchase of rental car insurance remains one of the most asked questions we get in the insurance industry. We often hear clients say that their credit card covers the physical damage of a vehicle when they rent it using that card. But does it really?

I have reviewed the credit card wording from American Express, Visa, Discover and MasterCard. Have you? Do you know what they cover and more importantly, don’t cover? The best time to find out is not ’after’ an accident.

Actual wording from a credit card contract: Excluded Cars: “trucks including pick-ups, and full size sport utility vehicles including but not limited to Chevrolet/GMC Suburbans, Tahoe, Yukon, Ford Expedition, Lincoln Navigator, Toyota, Land Crusier, Bronco, Range Roger or Lexus LX4S0.”

Excluded Cars: “Any High Value vehicle over $50,000 cost new.

Excluded Cars: ‘All Sport Utility vehicles”

If you are relying on this coverage to protect you, do you know if it includes collision and comprehensive both? Does it cover loss of use, administrative fees of the rental car agency as well as diminished value of the vehicle?

We advise clients to purchase the loss waiver coverage from the rental company. If you choose not to do that, you should READ these contracts; the credit card as well as the rental agreement. Be advised that violation of the rental agreement voids coverage so make sure you understand what activities violate the agreement, such as valet parking.

College Kids – Obtaining in State Tuition May Void Insurance

When your college student is listed as a ‘driver’ on your auto policy, and goes away to college with a vehicle, we rate that vehicle using the garaging location at college and leave them on the insurance policy. When they leave without a vehicle, we apply a student away at school discount but STILL leave them on the policy to cover when they are a driving a non-owned vehicle, or are injured as a driver, passenger or pedestrian.

However, this situation becomes complicated and could cause coverage issues if you allow your child to be licensed in another state to declare residence and receive in state tuition. Claims could be denied when that child causes an accident but is licensed in another state, registered to vote in another state, and have their belongings and address in another state. Please contact us if this situation is happening in your home so we can educate you on how best to protect them and you.