Haris Ashley
Credit card rental car insurance helps pay for damage to your rental car from an accident or theft. This insurance comes in two forms: primary coverage and secondary coverage. Primary coverage is the gold standard as it means the card's coverage is first in line to pay your bills before your personal auto insurance. Many premium cards offer primary rental car coverage, although some have no annual fees. Secondary car rental coverage from your credit card only kicks in after your personal policy pays for a rental car's damage. In some circumstances, the secondary coverage can become primary.
| Characteristics | Values |
|---|---|
| Type of coverage | Primary or secondary |
| When primary coverage applies | When renting for business purposes, renting outside your country of residence for personal reasons or if you do not have automobile insurance |
| When secondary coverage applies | After your personal auto insurance pays |
| What is covered | Damage or losses from theft or collision, vandalism, natural disasters, loss-of-use charges, towing expenses and administrative fees |
| What is not covered | Damage to other cars or property, injury to anyone or anything, loss or theft of personal belongings, liability, wear and tear, uninsured or underinsured motorists |
| Vehicle exclusions | Luxury vehicles, classic cars, high-value vehicles, antique vehicles, trucks, pickups, full-size and cargo vans, campers, trailers, motorcycles, limousines, vehicles rented with a driver, cars rented through a car-sharing company |
| Country exclusions | Australia, Ireland, Israel, Italy, Jamaica, New Zealand, nations where rental is a violation of U.S. sanctions |
| Time limit | 15 to 30 consecutive days for secondary coverage; 31 days for primary coverage |
What You'll Learn
Primary vs. Secondary Coverage
When it comes to auto-rental insurance, credit cards offer two types of coverage: primary and secondary. Understanding the differences between the two is essential before renting a car.
Primary Coverage
Primary coverage is offered by fewer credit cards but provides more benefits. It kicks in before your personal car insurance, meaning you won't need to file a claim with your personal insurance company. This saves you from the hassle of dealing with potentially increased premiums and deductibles. Primary coverage will cover the full cost of damage or theft of almost any rental car. The maximum coverage limits set by primary insurers are usually higher than the total value of the covered vehicle. This type of coverage is ideal if you want to avoid the hassle of dealing with multiple insurance companies and prefer to have a single point of contact for claims.
Secondary Coverage
Secondary coverage is more common among credit cards. It acts as a backup system and comes into play after your personal car insurance. If you have an accident, you will first need to file a claim with your personal insurance company, and then you can turn to the secondary coverage provider. This type of coverage usually involves a deductible, and there may be limits and restrictions on the amount covered. It's important to note that secondary coverage may become primary coverage in certain situations, such as when travelling outside your home country.
Important Considerations
Regardless of the type of coverage, there are some essential things to keep in mind. Firstly, make sure to decline the rental company's collision damage waiver (CDW) to utilise your credit card's insurance benefits. Secondly, use the credit card with the insurance coverage to pay for the rental in full. Additionally, ensure that you are listed as the primary renter on the rental agreement. It's also crucial to read the fine print and understand any exclusions or limitations that may apply, such as vehicle type, rental duration, and countries where the coverage is not valid. Finally, always confirm with your credit card company and review your specific benefits package to understand the exact terms and conditions of your coverage.
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What's Covered and What's Not
What's Covered
Credit card rental car insurance covers damage to your rental car from an accident or theft. This insurance comes in two forms: primary coverage and secondary coverage.
Primary rental car coverage is the first payer for damages to your rental car, so there’s no need to send a claim to your insurance company. Many larger banks offer at least one premium card with primary rental car coverage. Most of these cards are for the frequent traveller and come with fees, but some have no annual fees.
Secondary car rental coverage from your credit card only kicks in after your personal policy pays for a rental car’s damage. In a few circumstances, the secondary coverage can become primary.
Credit card rental car coverage usually covers the rental car’s losses and damages related to collision and theft. Vandalism and natural disasters may also be covered.
If your credit card rental car insurance is primary, the card helps cover these expenses. If coverage is secondary, the card can help pay for the remaining balance after your personal insurance policy pays the initial claim. Often, that means it just pays your deductible.
What's Not Covered
Credit card coverage doesn't include paying auto insurance claims associated with the following:
- Damage to other cars or property
- Injury to anyone or anything—including yourself
- Loss or theft of your personal belongings
- Your liability (legal responsibility) for any damage to others
- Wear and tear, gradual deterioration, or mechanical breakdown
- Uninsured or underinsured motorists
It almost never includes liability insurance. Whether your card offers primary or secondary coverage, it applies to damage to the rental car but not to damage you might cause to other cars or necessary medical treatment for you, your passengers or pedestrians.
It won’t cover any and all types of cars. Stick to the normal categories of car (compact through full-size), and you’re covered. But choose a luxury car, passenger van or specialty vehicle and you need to buy the CDW/LDW at the counter.
It typically will only cover you for a month. If you’re renting a car for less than 30 days, the typical limit, you’ll be covered. But if you need a car for an extended period, you may need to consider options for long-term car rental insurance.
It may not apply overseas. Every card has a list of excluded countries, which varies from issuer to issuer. But the most common exceptions are Australia, Israel, Italy, Ireland, Jamaica and New Zealand.
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How to File a Claim
The process of filing a claim for credit card primary auto insurance is similar to filing a claim with standard auto insurance. Here are the steps you need to follow:
Step 1: Notify the Car Rental Company
Inform the car rental company about the incident or claim within the timeframe specified in your credit card's guide to benefits, typically 30 to 45 days. They will provide you with instructions for the next steps and any necessary documentation.
If your credit card offers secondary coverage, you will first need to file a claim with your personal auto insurance as soon as possible. This is because the secondary coverage from your credit card will supplement your personal policy.
Step 2: Show Proof of Loss
You will be required to submit various documents to support your claim. This may include a police report, accident report form, repair estimate, final bill, photos of the damaged vehicle, rental agreement, and proof of payment. Additionally, you may need to provide proof of your auto insurance coverage and your driver's license.
Step 3: Receive Payment for Proven Losses
After submitting the necessary documentation, you will typically receive payment for your proven losses within 15 to 90 days, depending on the terms and conditions of your credit card company.
Additional Information:
It is important to understand the coverage provided by your credit card's primary auto insurance. This type of insurance usually covers damage or losses from theft or collision. It may also include coverage for auto repair or replacement and loss-of-use charges from the rental agency. However, it typically does not cover damage to other cars or property, injury to yourself or others, or loss of personal belongings.
To activate the primary auto insurance coverage from your credit card, ensure that you decline the rental company's collision damage waiver (CDW) and pay for the entire rental cost using the eligible credit card.
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Rental Car Insurance Alternatives
Rental car insurance coverage can come from your personal auto policy, the rental car counter, a third-party insurer, or even your credit card.
Personal Auto Policy
Your personal auto policy (PAP) can extend all the basic coverages to your rental car, including auto liability, uninsured/underinsured motorist, medical payments, and physical damage coverage. However, you may still want to obtain the "walk away" convenience of a Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW).
Rental Car Counter
A loss-damage waiver or LDW (also called a collision damage waiver or CDW) gets you off the hook for damage to the rental vehicle or theft of the car. It’s not insurance but a waiver stating the rental car company won’t hold you responsible.
Third-Party Insurer
Some companies sell standalone policies for rental cars if you don’t want to buy insurance at the rental car counter. Generally, you need to decline the rental company’s coverage to use these. Options include:
- Allianz Global Assistance: Offers primary coverage for up to $50,000 for damage and loss for $11 a day.
- Bonzah: Offers primary coverage starting at $21.95 per day for up to $35,000 in repairs or replacement.
- Rental Cover: Offers no-deductible policies that count as primary coverage. Coverage options vary by country and are claimed to be up to 50% cheaper than the rental desk.
- Sure: Covers up to $100,000 worth of damage to a vehicle and any belongings inside. Also covers flat tires and lost keys.
Credit Card
Credit card rental car coverage is typically secondary, meaning it pays out after your personal auto insurance. However, some premium cards offer primary coverage, which pays out first. To activate this coverage, you must pay for the rental with the eligible credit card and decline the rental company’s collision coverage. Notable cards with primary coverage include:
- Chase Sapphire Preferred® Card
- Chase Sapphire Reserve®
- Capital One Venture X Rewards Credit Card
- United℠ Explorer Card
- United Club℠ Infinite Card
- Ink Business Preferred® Credit Card
- Ink Business Cash® Credit Card
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Primary Rental Car Insurance Coverage
To be eligible for primary rental car insurance coverage, you must use the credit card offering this benefit to pay for the rental car. You also need to decline the rental car company's collision damage waiver or loss damage waiver. This type of insurance usually covers the rental car's losses and damages related to collision and theft, and may also include vandalism and natural disasters.
Primary rental car insurance typically covers the cost of repairing or replacing the rental car, as well as loss-of-use charges from the rental agency. It is important to note that liability and injury concerns, such as damage to property other than the rental car and personal injuries, are usually not covered by this type of insurance.
Exclusions
Benefits
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Frequently asked questions
Primary auto insurance for a credit card covers damage to a rental car from an accident or theft. This insurance can be primary or secondary coverage. Primary coverage means the card's insurance is first in line to pay the bills before your personal auto insurance. Secondary coverage means the card's insurance will pay only the amount not covered by another policy.
You need to have a credit card that offers primary rental car insurance and rent a car. You also need to pay for the rental car with the credit card that includes the benefit and decline the rental car company's collision damage waiver.
Primary auto insurance for a credit card is less common and means the card's coverage is first in line to pay your bills before your personal auto insurance. Secondary auto coverage is more common and means the card's coverage will pay only the amount not covered by another policy.
Primary auto insurance for a credit card covers damage or losses from theft or collision. It also covers towing expenses and administrative fees. Some cards also cover loss of use, which means compensating the rental company for the time the car is out of service while damage is repaired.
Yes, there are some exclusions to primary auto insurance for a credit card. For example, it usually doesn't include liability insurance, personal property coverage, or medical expenses. It also typically won't cover luxury or exotic vehicles, rentals longer than 30 days, or rentals in certain countries like Australia, Italy, or New Zealand.
