Kerri-Lynn McAllister got into a credit-card-covered crunch on her vacation.

“I’ve been in an accident in the Dominican Republic with a rental car, where the car was totally smashed on the whole one side – making the claim was less painful than you would think,” says McAllister, chief marketing officer for a financial services comparison site. “It was kind of scary waiting for that confirmation that I was actually covered by my card when I had to make the claim.”

You can only make a claim if you’re covered in the first place. And only certain cards give you collision loss/damage insurance for rental vehicles. (Click here for a list of Visa’s)

To get coverage, you need to pay for the car with the card or with travel points that are associated with the card. And, you need to turn down the extra insurance sold at the rental counter.

We asked a few banks about their rental car coverage. We heard back from TD, Scotiabank and Royal Bank.

Their coverage is provided by insurance companies and all the details are in the credit card agreement.

“When you pay for the entire cost of the rental vehicle using your credit card, you are covered for damage to the rented vehicle or theft up to the actual cash value of the damaged or stolen rental vehicle and valid towing charges,” RBC corporate communications adviser Lena Wan said in an e-mail. “The credit card insurer may not pay for any third-party liability expense, which means if you injure someone else or damage their property with the rental vehicle, it is not covered.”

Canadian rental companies provide some liability coverage, but companies in other countries might not.

“It is important to be familiar with your personal auto insurance liability coverage and confirm this coverage protects you when you rent a car,” Wan says. “If you don’t have personal auto insurance coverage, it is important to consider purchasing liability coverage when renting a car.”

There are other limits to coverage – and you probably won’t be covered at all if you rent a Ferrari. Or a truck.

“Certain types of vehicles are not covered such as cargo vans, trucks and any vehicle with a manufacturers suggested retail price of over $65,000 – with the exception of Aeroplan VISA Infinite Privilege, which has a $85,000 MSRP limit,” TD Bank Group spokesperson Crystal Jongeward said in an e-mail. “The length of time the cardholder rents the vehicle cannot exceed 48 days consecutive days.”

Not all countries might be covered either, McAllister said.

“I recall Italy or Greece being on the list of countries excluded from coverage on my card,” she said.

If you do get in a crash, you may not be covered if you let someone else drive, or if you were impaired.

If there’s an accident, call your credit card company. They’ll tell you what you need – and it’s also listed in the cardholder’s agreement.

“There were around 10 items I needed to provide to support my claim,” McAllister said. “Things like a copy of the rental agreement, applicable damage reports, pics of the damaged vehicle, repair invoice, et cetera.”

A police report helps if you can get one, Wan said.

“It is always best to try and obtain a police report,” Wan said. “Document the accident or damage by taking pictures, obtain the other drivers insurance and driver’s license information.”

Once your credit card company gets all the information, it should take around 15 days to get processed. McAllister says she had to pay for the damages on her credit card and was then reimbursed.

“Cardholders may pay for car damage however they prefer, and in some cases car rental agencies may assist with upfront payment at the time of loss so that there are no out of pocket expenses,” Jongeward said.

The Globe and Mail


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