At-Fault Accidents: Understanding Credit Card Auto Insurance Coverage

Credit cards can provide rental car insurance, but it's important to note that this typically acts as secondary insurance to your primary auto insurance. This means that in the event of an accident, your auto insurance company will be billed first, and your credit card insurance will supplement it if necessary. Credit card rental car insurance usually covers physical damage to, or theft of, the rented vehicle, but it generally does not cover damage to other cars, property damage, or medical expenses for injuries to people. It's also worth noting that credit card rental car insurance may not cover all types of cars, such as luxury vehicles or antique cars, and there may be limits on the number of days you can take out coverage.

Credit card auto insurance covers damage to the rental car

If you're renting a car, you might worry about what could happen if you're in an accident or even just scratch the paint. Using the right credit card to pay for your rental could give you some financial protection and peace of mind.

However, it's important to note that CDW only covers physical damage to the rental car. It doesn't cover medical or liability coverage. So, if you're in a severe accident and need coverage for your medical expenses, you might have to pay out of pocket unless you have separate travel insurance or health insurance.

When deciding whether to use your credit card for rental car insurance, it's important to understand the coverage offered by your specific card. Most credit cards only provide collision damage coverage, so you won't be held responsible for any theft or damage to the rental car. However, some premium credit cards offer more comprehensive coverage, including personal accident insurance and personal effects coverage.

To use your credit card's auto insurance coverage, you typically need to pay for the rental car in full with the card and decline the rental company's CDW at the counter. Additionally, specific countries and vehicle types may be excluded from coverage, so it's important to check the details of your card's benefits guide before relying on it for insurance.

It doesn't cover medical or liability expenses

Credit card rental car insurance is an alternative to buying the coverage offered by car rental agencies. However, it doesn't cover medical or liability expenses.

Credit card rental car insurance is typically secondary to your personal auto insurance policy. This means that in the event of an accident, you will have to file a claim with your personal policy first, and then your credit card benefit will cover anything your personal policy won't, such as the deductible.

Credit card rental car insurance covers:

• Damage to your rental vehicle sustained in a collision
• Theft of the rental vehicle
• Loss-of-use charges, or the loss of income for the rental agency while the vehicle is being repaired or replaced

However, it does not cover:

• Personal injuries and property damage you cause in an accident
• Medical expenses for you and others in your vehicle
• Loss or theft of your personal belongings
• Motorcycles, mopeds, recreational vehicles and large passenger vans
• Mechanical breakdowns

While credit card rental car insurance can provide some value, it's important to understand its limitations and consider other forms of protection, such as a personal auto insurance policy, homeowners or renters insurance, or the rental car agency's coverage.

You can use a credit hire company to pay for repairs and a replacement vehicle

If you've been in a non-fault road traffic accident, a credit hire company can help you by providing a replacement vehicle while yours is being fixed and covering the cost of repairs.

The credit hire company will pay for the cost of hiring a replacement vehicle and for repairs to your vehicle. They will then claim these costs back from the insurance company of the driver who was at fault for the accident.

Using a credit hire company means you won't have to pay the excess on your policy. They will also liaise with your insurance company and give you replacement transport. They may also offer to help organise repairs and with claiming compensation for other injuries or losses due to the accident.

What to be aware of

Make sure you check the small print before signing up. The agreement should detail the cost of the hire car per day and specify what you will have to pay if you don't cooperate with the company or mislead them. Some credit hire companies may also ask for a small payment as an insurance policy, which guarantees that you won't be left with the bill if the insurance company of the other driver doesn't pay up.

You will also be asked to sign an agreement stating that any costs will be in your name, and you may be asked for financial details. This is in case the insurance company takes the credit hire company to court, believing they have charged too much. In this case, you will have to give evidence in court and may need to prove that you needed the hire car and couldn't pay for it without the help of the credit hire company. If this happens, it's recommended that you seek legal advice.

You can seek compensation from the at-fault driver's insurance company

If you've been in an accident and it wasn't your fault, you can seek compensation from the at-fault driver's insurance company. This is known as an "at-fault" insurance system, where the responsible party is liable for compensating injury victims for their accident-related expenses.

However, dealing with insurance companies can be complicated, and they may deny your claim or offer a low settlement. Here are some steps you can take to seek compensation:

• Review State Laws and Insurance Policies: Understand the minimum insurance requirements and coverage limits in your state. Review your own auto insurance policy to know your coverage limits and whether it extends to rental cars or international travel.
• Gather Information: After an accident, collect the other driver's name, address, phone number, insurance information, driver's license number, and license plate number. Also, get a copy of the police report and your medical records related to any injuries from the accident.
• Hire an Attorney: Consult with a personal injury attorney who has experience handling car accident claims. They can review your case, protect your rights, and deal with the insurance company on your behalf.
• Do Not Accept an Early Settlement: Early settlement offers from insurance companies are often low and may not cover all your future accident-related expenses. Consult with your attorney before accepting any settlement to ensure you receive fair compensation.
• File a Lawsuit: If negotiations with the insurance company are unsuccessful, your attorney may suggest alternative dispute resolution methods such as mediation or arbitration. As a last resort, you may need to file a lawsuit against the at-fault driver to compel their insurance company to provide compensation.

Remember, each case is unique, and it's essential to seek legal advice to understand your specific options and the best course of action.

Collision coverage can help pay for repairs to your vehicle

The benefits of collision coverage include knowing your car is covered in the event of an accident and avoiding paying out-of-pocket for repairs above the cost of your deductible. Collision coverage can also provide coverage for your loss when your damaged vehicle is deemed a total loss. In some cases, you may pay nothing at all for repairing or replacing your vehicle when adding additional coverage options alongside your collision insurance.

When choosing collision coverage, it is important to consider the cost of your car and its potential corresponding repairs, as well as your willingness to pay for repairs under the amount of the deductible. A higher collision deductible can lower your monthly premium but may put you at risk in the event of a major accident.

It's worth noting that collision coverage is right for vehicle owners who drive a car worth protecting, such as leased or financed vehicles, newer or more expensive cars, or older vehicles that still maintain good value relative to the deductible and monthly rate.

Frequently asked questions