Orlando Harmon
Many credit cards offer rental car insurance, which can save you money on rental car insurance, especially when travelling internationally. However, this insurance usually only covers collision damage, theft or vandalism to the rental car, and not liability insurance. Liability insurance covers damages caused if you are found at fault for an accident, including medical expenses for you or another vehicle's passengers, damages to another vehicle or property damage.
| Characteristics | Values |
|---|---|
| Type of coverage | Collision damage waiver, personal accident insurance, liability insurance, personal effects coverage |
| Credit card coverage | Collision damage waiver or loss damage waiver, towing expenses, administrative fees, loss of use |
| Not covered | Liability, injury, damage to property other than the rental car, personal belongings inside the car |
| Excluded vehicles | Luxury or exotic cars, motorcycles, trucks, large vans |
| Rental period | Up to 15 days in the country of residence, up to 31 days outside |
| Primary vs secondary coverage | Primary coverage is better as it doesn't require involving your personal auto insurance |
| Claim procedure | Submit documents such as accident report, rental agreement, repair estimate, photographs, police report |
| Cards with primary coverage | Chase Sapphire Preferred, Chase Sapphire Reserve, Capital One Venture X Rewards, Ink Business Preferred, United Explorer, United Club Infinite, Bilt World Elite Mastercard |
| Cards with secondary coverage | American Express cards, Capital One cards, Bank of America cards |
What You'll Learn
Credit cards that offer rental car insurance
Many credit cards offer rental car insurance, which can save you money on rental car fees. However, it's important to note that not all credit cards offer this benefit, and the coverage provided may vary. Here are some popular credit cards that offer rental car insurance:
- Chase Sapphire Preferred® Card
- Chase Sapphire Reserve®
- Capital One Venture X Rewards Credit Card
- United℠ Explorer Card
- Bilt World Elite Mastercard®
- Bank of America® Premium Rewards® Elite credit card
- U.S. Bank Altitude® Reserve Visa Infinite® Card
- United Quest℠ Card
- United Club℠ Infinite Card
Understanding Rental Car Insurance
Rental car insurance offered by credit cards typically covers damage or theft of the rental vehicle, known as a collision damage waiver (CDW) or loss damage waiver (LDW). This type of coverage is considered secondary insurance, meaning it kicks in after your personal auto insurance policy. However, some credit cards offer primary rental car insurance, which means you can file a claim directly with the credit card company without involving your personal insurance.
Factors to Consider
When choosing a credit card for rental car insurance, consider the following:
- Primary vs. Secondary Coverage: Primary coverage is generally preferred as it allows you to bypass your personal auto insurance and file a claim directly with the credit card company.
- Types of Rewards: Look for cards that offer rewards or points that align with your spending habits and can be redeemed for travel, cash back, or other benefits.
- Annual Fees and Benefits: Weigh the annual fees against the cardholder benefits to ensure you're getting value from the card. Some cards with higher annual fees may offer more extensive travel perks or rewards.
- Welcome Offers and Minimum Spending Requirements: Consider the welcome bonus and the minimum spending required to earn it. Ensure that you can meet the spending threshold with your planned expenses.
Exclusions and Limitations
It's important to note that rental car insurance through credit cards usually has exclusions and limitations. For example, certain types of vehicles, such as luxury or exotic cars, motorcycles, or trucks, may be excluded from coverage. Additionally, there may be specific countries where the coverage does not apply, such as Italy, Ireland, Australia, or New Zealand. Be sure to review the terms and conditions of your credit card carefully to understand the exclusions and limitations of the rental car insurance coverage.
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Primary vs secondary coverage
When renting a car, you will be offered numerous rental car insurance options. Many of these have confusing names, but it is important to understand the differences between them.
Primary Coverage
Primary rental car coverage pays out first, and you don't have to get your own insurer involved. This means you can avoid paying a deductible and potentially seeing your premiums rise. This is a more valuable option, as it allows you to file a claim through your card immediately without involving your personal insurer.
Secondary Coverage
Secondary coverage, on the other hand, kicks in after your personal auto insurance pays. It can still be valuable, as it could reimburse you for your auto insurance deductible, which might be as high as $1,000.
While both types of rental car insurance offer savings when renting a car, primary rental car coverage is better. Secondary rental car coverage supplements your personal auto insurance policy, covering your deductible and filling in the gaps in coverage limits to ensure that the damage or theft of the rental car is covered up to benefit limits.
Cards that Offer Primary Coverage
- Chase Sapphire Preferred® Card
- Chase Sapphire Reserve®
- United℠ Explorer Card
- United Club℠ Infinite Card
- Capital One Venture X Rewards Credit Card
- Bilt World Elite Mastercard® Credit Card
Cards that Offer Secondary Coverage
American Express cards
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Rental car insurance exclusions
- Types of vehicles: Credit card coverage usually applies to specific types of vehicles, excluding exotic cars, motorcycles, trucks, large vans, and recreational vehicles.
- Rental duration: There is typically a limit on the number of consecutive days that you can take out coverage, often up to two weeks (14 days) or a month (31 days).
- Rental location: Coverage may vary depending on the country where the rental takes place, and certain countries may be excluded from coverage.
- Primary vs. secondary coverage: Most credit cards offer secondary coverage, which means that your personal car insurance policy will be used first in case of an accident, theft, or damage. Primary coverage, offered by some premium credit cards, allows you to submit a claim directly to your credit card company without involving your personal insurance.
- Liability and personal injury: Credit card coverage typically does not include liability coverage or protection against personal injury. This means that if you are involved in an accident resulting in injury to another person or damage to another vehicle, you may not be covered.
- Administrative fees and diminution of value: Credit card coverage usually excludes administrative fees charged by the rental company and diminution of value, which refers to the loss of resale value due to the vehicle being involved in an accident.
- Personal belongings: Loss or theft of personal belongings inside the rental car is generally not covered by credit card insurance, but this may be covered by homeowners or renters insurance.
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How to check if your card offers rental car insurance
To check if your card offers rental car insurance, you can refer to your card's benefits guide, which should have been mailed to you when you first got the card. You can also log in to your card account online and look for a "Benefits" link on the menu. Alternatively, you can call the number on the back of your card to ask about the benefits. It is important to note that credit card benefits can change over time, so be sure to confirm that the benefit is still being offered before you rely on it for rental car insurance.
Some of the credit cards that offer rental car insurance include:
- Chase Sapphire Reserve
- Chase Sapphire Preferred Card
- Capital One Venture X Rewards Credit Card
- Bilt World Elite Mastercard Credit Card
- United Explorer Card
- United Club Infinite Card
- Ink Business Preferred Credit Card
- American Express Gold Card
- Blue Cash Preferred Card from American Express
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How to apply for credit cards with rental insurance
When you're renting a car, you usually have the option to add extra coverage offered by the rental company. However, before you purchase this, check if you're already covered by your credit card. Many travel rewards cards come with rental car insurance, allowing you to skip the rental company's insurance.
- Chase Sapphire Reserve: This card offers primary car rental coverage for up to 31 consecutive days in most countries. The policy covers losses, including physical damage, theft, loss-of-use charges, and towing charges. The annual fee is $550.
- Chase Sapphire Preferred: This card offers similar coverage to the Sapphire Reserve, but with some additional exclusions and restrictions. It provides primary coverage with a maximum benefit limited to the actual cash value of the rental car. The annual fee is $95.
- Capital One Venture X: This card provides primary coverage for up to $75,000. Exotic cars, motorcycles, and commercial vehicles are not covered, and certain countries are excluded.
- Bilt World Elite Mastercard: This card offers primary insurance and above-average rewards on travel, making it a good option for budget-conscious travellers.
- PenFed Platinum Rewards Visa Signature: This card comes with a secondary auto collision damage waiver that reimburses cardholders for theft or damage, administrative and loss-of-use charges, and towing charges. Coverage lasts up to 15 days in your country of residence or 31 days outside the US.
- Blue Cash Preferred Card from American Express: This card provides an auto collision damage waiver covering theft and/or damage up to the cost of the vehicle for up to 30 consecutive days.
- American Express Gold Card: This card offers an auto collision damage waiver covering theft and/or damage up to the cost of the vehicle for up to 30 consecutive days.
To apply for any of these credit cards, simply visit the website of the card issuer and follow the application process. Make sure to read the terms and conditions carefully and compare the benefits of each card to choose the one that best suits your needs.
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Frequently asked questions
If you live in the U.S. and own a car for personal use, you likely don't need additional insurance when renting a car in the U.S. That's because your own auto insurance policy will cover your rental car. However, some U.S. states, like Florida and New Hampshire, only require more limited coverage for auto insurance.
Credit cards typically only provide collision damage coverage, so credit card providers will not hold you responsible for any theft or damage to the rental car.
You can determine if your credit card covers rental insurance in two ways: read the fine print on your credit card or call the company to check your benefits.
Primary coverage allows you to submit an accident claim right away without first submitting it to a personal policy. Secondary coverage, on the other hand, requires you to file a claim with your personal car insurance company before submitting a claim through your credit card's insurance provider.
