Travel Credit Card Insurance: Does It Cover Your Car Rental?

Credit card travel insurance is nearly identical to regular travel insurance. There are two types of policies: travel medical and trip protection. Travel medical insurance covers expenses related to your health, such as a quick trip to the hospital or medical evacuation. Trip protection provides additional travel insurance, such as trip cancellation, lost luggage, and auto rental collision/loss damage coverage.

Some credit cards offer both types of travel insurance, while others only provide travel medical insurance. The length of coverage and the amount covered depend on the individual policy. It's important to carefully review the terms and conditions of your credit card's travel insurance policy to understand what is and isn't covered.

Trip cancellation and interruption protection

Trip cancellation and interruption insurance will reimburse you for the non-refundable, prepaid trip expenses incurred when you have to cancel or alter your trip due to unforeseen circumstances. This includes any additional costs incurred, such as booking a new flight home, additional hotel nights, and airport transfers.

Trip cancellation insurance provides reimbursement when you have to cancel your trip before the departure date. It covers the amount of prepaid, non-refundable travel expenses, such as airline tickets, cruises, trains, and hotels.

Trip interruption insurance, on the other hand, applies when you have already begun your trip and have to return home early due to a covered reason. It covers the unused portion of your trip, including any additional expenses incurred for last-minute travel arrangements.

The specific covered reasons for trip cancellation or interruption vary by policy but generally include unforeseen events such as illness, injury, death, severe weather, terrorist action, job loss, etc.

It is important to note that trip cancellation and interruption insurance does not typically provide reimbursement for any reason. Instead, it covers specific losses and exclusions that define the situations in which you can claim reimbursement, and these vary from policy to policy.

When purchasing trip cancellation and interruption insurance, it is essential to carefully review the terms and conditions of the policy to understand what is covered and what the reimbursement limits are.

Rental car insurance

However, if you don't have any type of car insurance, you'll likely want to purchase insurance when renting a car. If you have a personal auto insurance policy with full coverage and are renting a private passenger vehicle, you may not need additional rental car insurance. But your exact rental coverage needs depend on the type of insurance you carry on your personal vehicle, as well as the terms of your rental contract and the reason you’re renting a vehicle.

If you only have liability insurance coverage, your personal car insurance won’t cover damage to the rental. To financially protect yourself in this situation, you can purchase a loss damage waiver (LDW) from a rental agency. This agreement waives your financial responsibility for damage or loss of the rental car, including loss from theft.

Some companies sell standalone policies for rental cars if you don’t want to buy insurance at the rental counter or use a credit card. For example, Allianz Global sells a OneTrip Rental Car Protector for $11 a day that pays out up to $50,000 for damage and loss. It’s primary coverage, so it pays out before your own auto insurance and includes 24-hour emergency assistance.

Travel medical and evacuation

When travelling, it is always a good idea to have comprehensive insurance that covers medical and evacuation emergencies. While some credit cards offer travel insurance, it is important to understand the limitations of such coverage.

Travel medical insurance is designed to reimburse you for medical treatment costs incurred while travelling. This includes doctor's visits, hospital stays, X-rays, lab work, and medication. When purchasing travel medical insurance, it is important to consider the coverage limits, as they vary across plans. For example, a plan might offer up to $500,000 in medical expense coverage. It is also worth noting that travel medical insurance typically does not cover medical evacuation costs.

On the other hand, medical evacuation insurance, also known as medevac coverage, focuses on the transportation aspect of emergency medical care. It covers the cost of transporting you from a remote area or inadequate medical facility to a better-equipped medical centre, usually by airlift or ambulance. This type of insurance ensures that you can access the necessary medical attention in a timely and efficient manner. Similar to travel medical insurance, medical evacuation insurance has coverage limits, and a plan might offer up to $1 million for evacuation expenses.

While some credit cards do offer emergency medical evacuation coverage, it is often limited in scope and may not provide the same level of protection as a dedicated travel insurance plan. Credit card travel insurance typically has lower coverage limits and may not cover all types of transportation or medical expenses. Additionally, it is important to understand the eligibility requirements and restrictions associated with credit card travel insurance. For instance, you may need to charge the entire rental amount to your card and decline the rental company's collision insurance for the coverage to be valid.

Therefore, it is generally recommended to have both travel medical insurance and medical evacuation coverage in place when travelling, especially when travelling internationally. By having comprehensive coverage, you can ensure that you are protected in case of medical emergencies and have access to the necessary transportation and medical care.

Travel accident insurance

The coverage provided by travel accident insurance can give peace of mind to those who travel frequently for business or pleasure. It is often included as part of credit card travel insurance, but the extent of coverage varies depending on the card. For example, the Chase Sapphire Reserve card offers travel accident insurance of up to $1,000,000, while the Southwest Rapid Rewards Plus Credit Card offers coverage ranging from $250,000 to $500,000.

In addition to travel accident insurance, credit card travel insurance may also include benefits such as trip cancellation and interruption protection, trip delay coverage, lost and delayed baggage protection, rental car insurance, and medical and evacuation coverage. However, it is important to carefully review the terms and conditions of your credit card's travel insurance policy, as there may be exclusions and limitations. For instance, credit card travel insurance typically does not cover adventure travel, medical evacuation, or pre-existing medical conditions.

When considering whether to rely on credit card travel insurance or purchase a separate travel insurance policy, it is important to compare the benefits and limitations of each option. Credit card travel insurance is often included as a benefit with no additional per-trip cost, whereas standalone travel insurance policies typically charge a percentage of the trip's total value. Credit card travel insurance usually has lower coverage limits compared to standalone policies, and it may not cover travelling companions who are not immediate family members.

Baggage delay and loss

Baggage insurance can be divided into two categories: baggage loss and baggage delay. If your luggage is delayed, baggage delay coverage will reimburse you for the purchase of essential items such as clothing and toiletries for each of the days that you didn't have your luggage. If your luggage is lost, stolen, or damaged, baggage loss coverage will reimburse you for the missing luggage and its contents up to a specific dollar amount.

Baggage loss will reimburse you for luggage and personal belongings that are lost or stolen while you're on your trip. This usually includes:

• A per-person overall limit
• A specific limit for high-end items
• A per-bag limit

Baggage delay coverage will reimburse you for necessary items while you're waiting for your delayed luggage. This benefit usually includes:

• A per-person dollar limit
• A minimum amount of time that must pass before you can be eligible for reimbursement

Each insurer will have its own list of exclusions, but some common exclusions are:

• Damage to fragile items
• Consequential loss, like missing a portion of your trip due to delayed or lost luggage
• Loss due to normal wear and tear
• Loss due to reckless handling of luggage
• Loss of cash or other negotiable instruments
• Loss of samples or business goods

Baggage insurance is usually included within comprehensive travel insurance plans. For a two-week trip to Australia that costs $5,000, a search of policies on travel insurance broker Squaremouth ranged from $198 to $447, representing 4.0% to 8.9% of the total trip cost.

The two main ways to get baggage insurance benefits are by purchasing a trip insurance policy or applying for a premium travel card that offers these benefits. For example, the Chase Sapphire Reserve card covers baggage delay and baggage loss, while the Platinum Card from American Express provides coverage for lost luggage only.

If you're traveling with high-value personal belongings, baggage insurance can be worth it. However, you might not need to pay out of pocket to get coverage if you have a travel credit card with robust trip protection and luggage insurance. Purchasing coverage separately is probably best if you don't have baggage insurance benefits through a credit card or want to customize your coverage.

Frequently asked questions