One of the benefits of having a travel rewards credit card, compared to other rewards credit cards in the market, is a large number of additional insurance policies available to you. For example, if you want to rent a car during your trip, most travels rewarded credit cards offer collision and damage insurance. What will be covered by this insurance depends on one company to another, but here is an overview of the operation of collision and damage insurance of credit cards.
What is collision and damage insurance?
Collision and damage insurance (also known as collision damage or loss insurance) protects the credit card holder the moment a car is rented and gets stolen or damaged. The insurance applies only to the car itself, it does not apply to damage done to other cars, nor to properties or individuals. The insurance which covers these is the insurance of civil liability.
The collision and damage insurance is taken into account when the person who rented a car waives the damage and collision insurance offered by the rental company. Companies offer this optional insurance, and it costs about $20 a day. If you are covered by collision and damage insurance from the car rental company, it will not hold you responsible for the accidental damage done to the car.
If you already have insurance with your credit card, you do not have to buy insurance from the car rental company.
If you do not want to buy collision and damage insurance, the company that rented the car has the right to sue you for the costs associated with the damage or loss of the car. That's when credit card collision and damage insurance comes into play. It protects you against claims from the car rental company.
What is covered by collision and damage insurance?
Generally, collision and damage insurance protects you against the costs associated with repairing a car that has been damaged, vandalized or otherwise damaged. In addition, the insurance also covers the loss of the use of the car which could be a high amount claimed by the rental company. At the moment the car is damaged and needs to be repaired, the rental company suffers a loss as the car cannot be rented during repairs. The loss of use provision protects you against claims made by the rental company in this type of situation. If your travel credit card does not covers a collision and damage insurance, you might need to look for a new card which covers one. Chase Freedom is one such card with added benefits and perks.
What is not covered by collision and damage insurance?
It's not all the losses or damage done to the car that is covered by collision and damage insurance, here are some examples:
Accidents or damage caused by an insured person driving under the influence of alcohol or drugs
In addition, it is not all kinds of vehicles that are covered by this insurance. A general rule states that only cars, minivans and SUVs are covered. Vehicles that are not covered by collision and damage insurance are as follows:
Who is covered by collision and damage insurance?
The authorized cardholder is covered by the insurance provided that he has waived the insurance provided by the car rental company. In addition, the coverage applies to individuals who drive the car with the permission of the holder. In both cases, the driver must legally have the right to drive within the jurisdiction in which he drives.
It is important to know that the coverage is valid only if the rental of the car has been fully paid for with the credit card. In the event that you have only paid a portion of the rental with your credit card, you will not be covered by collision and damage insurance.
What is collision and damage insurance?
Collision and damage insurance (also known as collision damage or loss insurance) protects the credit card holder the moment a car is rented and gets stolen or damaged. The insurance applies only to the car itself, it does not apply to damage done to other cars, nor to properties or individuals. The insurance which covers these is the insurance of civil liability.
The collision and damage insurance is taken into account when the person who rented a car waives the damage and collision insurance offered by the rental company. Companies offer this optional insurance, and it costs about $20 a day. If you are covered by collision and damage insurance from the car rental company, it will not hold you responsible for the accidental damage done to the car.
If you already have insurance with your credit card, you do not have to buy insurance from the car rental company.
If you do not want to buy collision and damage insurance, the company that rented the car has the right to sue you for the costs associated with the damage or loss of the car. That's when credit card collision and damage insurance comes into play. It protects you against claims from the car rental company.
What is covered by collision and damage insurance?
Generally, collision and damage insurance protects you against the costs associated with repairing a car that has been damaged, vandalized or otherwise damaged. In addition, the insurance also covers the loss of the use of the car which could be a high amount claimed by the rental company. At the moment the car is damaged and needs to be repaired, the rental company suffers a loss as the car cannot be rented during repairs. The loss of use provision protects you against claims made by the rental company in this type of situation. If your travel credit card does not covers a collision and damage insurance, you might need to look for a new card which covers one. Chase Freedom is one such card with added benefits and perks.
What is not covered by collision and damage insurance?
It's not all the losses or damage done to the car that is covered by collision and damage insurance, here are some examples:
Accidents or damage caused by an insured person driving under the influence of alcohol or drugs
- The damage was done to the car intentionally by the renter
- Damage to the car by transporting illegal substances
- Damage was done to the car during a war, a rebellion or a civil war
- Car rentals over 48 days
- The damage was done to a car while you have another car rented. Suppose you have two cars rented during your trip and the second is involved in an accident, the insurance company will not cover the claims associated with it.
In addition, it is not all kinds of vehicles that are covered by this insurance. A general rule states that only cars, minivans and SUVs are covered. Vehicles that are not covered by collision and damage insurance are as follows:
- Motorcycles and motorcycles
- Limousines
- Cargo trucks or cargo mini-trucks
- Cars planned for off-road
- Trucks and pick-up vans
- Motorized campers, trailers and recreational vehicles
- All cars with a value of more than $ 65,000 new
- Cars considered exotic, such as Aston Martin, Bentley, Ferrari, Porsche and Rolls Royce
- Antique cars, defined as being older than 20 years
- Cars that are hand-made or finished by hand
Who is covered by collision and damage insurance?
The authorized cardholder is covered by the insurance provided that he has waived the insurance provided by the car rental company. In addition, the coverage applies to individuals who drive the car with the permission of the holder. In both cases, the driver must legally have the right to drive within the jurisdiction in which he drives.
It is important to know that the coverage is valid only if the rental of the car has been fully paid for with the credit card. In the event that you have only paid a portion of the rental with your credit card, you will not be covered by collision and damage insurance.
