Collision Damage Waiver: Auto Rental Insurance Explained

by. Zachary Ehrlich

Auto rental insurance is hardly one of the deciding factors when searching for the right credit card. This is largely because while you look for the financial institution that will get you the best APR along with cash back, airline miles or other rewards, the network deals with insuring your rental car.

Furthermore, aside from not thinking about it much, most people just assume their insurance and credit card will cover any damage.

What does a collision damage waiver mean?

Rental car agencies offer the collision damage waiver for $10 to $25 a day; a service that many people decline because of the price. “Plus, I’m already covered,” they think. However, rental companies have tacked on ingenious and exorbitant fees to make up for the lost potential profits.

If you damage the car and didn’t opt for the collision damage waiver, you will likely be required to pay the deductible and then file the claim through your primary insurance. When you get the bill, your credit card will cover the deductible and mostly what the insurance has left off. This means a huge hassle and many years to come of paying higher premiums.

So should you rely on your credit card or pay the collision damage waiver to cover your rental car?

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