It's summertime, and peak season for vacationers and car rentals. Even though most standard auto insurance policies cover rental cars, roughly 20% of consumers always purchase supplemental coverage when renting a car, and 20% do occasionally, according to a study by Progressive. Why? A study by the National Assn. of Insurance Comissioners finds that 62% of consumers don't think their personal auto insurance automatically covers rentals, and 24% aren't sure whether their credit cards provide any coverage.

Most credit card companies offer some sort of free rental car collision coverage, along with other perks. But what exactly does it cover? A recent report by CardHub examines each major card network's rental car insurance policy and explains what type of rental car insurance coverage consumers automatically receive through their credit cards, how they can take advantage of it, which credit cards offer the best insurance coverage, and whether any other forms of supplemental insurance are needed.

CardHub reviewed the publicly available online car rental policies of VISA, Discover, Mastercard and American Express to answer: 1) Who is eligible for car rental insurance coverage?; 2) What vehicles are excluded?; 3) What exclusions do the policies have?; 4) What is the quality of the coverage?; 5) How does one activate the benefit?; 6) How should claims be filed?; and 7) How easy it is to obtain complete information about the policy?

Read on for the key findings.

1. All four major card networks provide some form of rental car insurance coverage.

2. MasterCard is the only network that does not provide coverage on all of its cards.

3. American Express received the highest cumulative score (90%) for its rental car insurance policy, while Discover ranked second (88%), MasterCard ranked third (79%) and Visa ranked last (74%).

4. All four major networks require cardholders to charge their entire rental car purchase on their credit card and decline supplemental insurance/Collision Damage Waivers (CDW) offered by the rental company in order to be eligible.

5. None of the four major networks provides coverage for the rental of: 1) exotic, expensive, or antique cars; 2) trucks; 3) vehicles with open beds; or 4) off-road vehicles.

6. VISA is the only network that does not cover accidents occurring on dirt and gravel roads. MasterCard only covers accidents on dirt and gravel roads if they are “regularly maintained.”

7. All card networks exclude rentals that exceed specified time limits, and a lot of cards come with country limitations as well.

8. American Express is the only network not to provide coverage for renting certain popular SUVs – including the Suburban and Tahoe from Chevrolet, GMC Yukon, Ford Expedition, Lincoln Navigator, Toyota Land Cruiser, Lexus LX450, Range Rover, and full-sized Ford Bronco.

CardHub recommended the following tips for consumers weighing car rental insurance:

  • Contact your insurance agent or carrier and find out if rentals are covered under your standard policy. Older policies may not offer this coverage.
  • Ask your credit card issuer what limitations apply to the car rental coverage they provide.
  • Long-term rentals might not be covered by your existing auto insurance, as time limitations may be imposed by your policy.
  • Even if your personal auto policy covers rentals, it might not apply for rentals used for business travel.
  • Rent a car of similar value to your own car to increase the likelihood that your existing coverage is adequate for the rental car.
  • If your existing policy does not offer coverage for a particular type of rental car, ask about adding an insurance rider for a small fee.
  • If you are not a car owner but drive from time to time, consider purchasing a non-owner auto insurance policy.

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