Auto Insurance: Credit Card Primary Offers Explained

Credit cards with primary car rental insurance are a valuable asset when renting a car. This insurance covers the cost of damages to a rental car in the event of an accident or theft. It is considered the gold standard as it acts as the first payer for damages, meaning there is no need to send a claim to your insurance company. This can save you money on costly insurance fees offered by rental companies and give you peace of mind when travelling.

Primary vs. Secondary Coverage

When it comes to renting a car, you need to decide how to insure it. You can either go with the insurance offered by the rental company or the rental insurance available through your credit card company. Understanding the difference between primary and secondary car insurance is crucial when making your decision.

Primary Car Insurance Coverage

Primary car insurance coverage is the first policy that covers damages or losses in the event of an accident. It is typically provided by the vehicle owner or primary driver's insurance company. This type of coverage usually has higher limits and will often cover the full cost of damages. It covers damages from accidents, theft, or vandalism. However, it is important to note that very few credit card companies offer primary car coverage. Opting for the insurance provided by the rental company is usually a form of primary car insurance.

Secondary Car Insurance Coverage

Secondary car insurance coverage, on the other hand, is a backup policy that comes into effect when the primary policy's limits are exhausted or do not fully cover the expenses. It is often offered as a credit card benefit and acts as a supplement to your primary insurance. This type of coverage usually comes with a deductible, which is an out-of-pocket expense that you have to pay before the insurance company covers the rest. Additionally, secondary car insurance may have payment limitations and only cover a portion of the damages. Most credit cards that offer rental insurance provide secondary coverage.

Primary Coverage vs. Secondary Coverage

When deciding between primary and secondary coverage, it is important to understand their differences and how they apply to your rental car situation. Here are some key points to consider:

• Cost: Primary coverage is typically more expensive since it provides broader coverage and assumes higher liability. Secondary coverage is often more affordable as it is designed to supplement the primary coverage.
• Claims: With primary coverage, you can file a claim directly with the rental company or your credit card company, bypassing your personal auto insurance. Secondary coverage, on the other hand, requires you to first file a claim with your personal auto insurance and then with the secondary insurer for any remaining expenses.
• Deductible: Primary coverage eliminates the need to pay a deductible, while secondary coverage may require you to pay a deductible before it kicks in.
• Premium Increases: Filing a claim with your personal auto insurance may result in monthly premium increases. Primary coverage helps avoid this by allowing you to bypass your personal insurance altogether.
• Coverage Limits: Primary coverage usually has higher limits and is more likely to cover the full cost of the car. Secondary coverage may have lower limits for total coverage and may not be sufficient in case of a major accident.
• Rental Duration: Primary coverage may offer longer rental periods, while secondary coverage typically has shorter duration limits.
• International Travel: Secondary coverage may automatically become primary coverage when travelling internationally, as your personal auto insurance may not be accepted abroad.

Examples of Credit Cards with Primary Coverage

When it comes to credit cards that offer primary rental car coverage, premium cards are usually your best option. Here are some examples:

• Chase: Sapphire Reserve, Sapphire Preferred, United Explorer, United Club Infinite
• Capital One: Venture X Rewards
• American Express: Offers primary coverage for a flat rate of $12.25 to $24.95 per rental, up to 42 days.
• USAA: Co-branded cards for military personnel and their families.

In conclusion, while both primary and secondary coverage options have their advantages, primary rental car insurance is generally considered a more valuable benefit. It provides peace of mind, saves money, and makes the claims process easier by eliminating the need to file with your personal auto insurance. However, it is important to remember that primary coverage is not a substitute for liability coverage, and you may need additional protection in case of causing damage to other vehicles or people.

What's Covered and What's Not

What's Covered:

• Damage to the rental vehicle in the case of an accident or theft.
• Loss-of-use charges from the rental agency, up to a limit.
• Towing charges related to a covered loss.
• Vandalism and natural disasters may also be covered.

What's Not Covered:

• Damage to other cars or property.
• Injury to anyone or anything—including your injuries.
• 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.
• Luxury, classic, and high-value vehicles such as Ferraris, Maseratis, McLarens, Porsches, and Teslas.
• Antique vehicles, or cars that are more than 20 years old or haven't been in production for 10+ years.
• Trucks, pickups, and other vehicles with an open cargo bed.
• Full-size and cargo vans (moving vans).
• Campers, trailers, and other recreational vehicles.
• Motorcycles, mopeds, motorbikes, off-road vehicles, and other vehicles with fewer than four wheels.
• Limousines or vehicles rented with a driver.
• Cars rented through a car-sharing company.
• Rentals in certain countries, including Australia, Ireland, Israel, Italy, Jamaica, and New Zealand.

How to File a Claim

Step 1: Understand Your Coverage

Before filing a claim, it is important to understand the specific coverage offered by your credit card. Contact your credit card company to clarify the details of your primary auto insurance policy, including the types of vehicles and rental periods covered, as well as any exclusions or limitations.

Step 2: Notify Your Credit Card Company Promptly

In the event of an accident or damage to your rental car, notify your credit card company as soon as possible. There may be time limits or reporting requirements specified in your policy, so it is crucial to act quickly. Provide them with the details of the incident, including the date, location, and nature of the damage or accident.

Step 3: Gather Necessary Documentation

To support your claim, you will need to submit various documents. These typically include a copy of the accident or damage report from the rental company, the rental agreement, repair estimates, photographs of the damage, and a police report if one was filed. Keep all relevant documentation organised and easily accessible.

Step 4: Submit Your Claim

Follow the procedures outlined by your credit card company to submit your claim. This may involve filling out specific claim forms or providing additional information. Ensure that you meet any deadlines for claim submission to avoid delays or complications in the claims process.

Step 5: Stay in Communication

Maintain open communication with your credit card company throughout the claims process. Respond promptly to any requests for additional information or documentation. If you have any questions or concerns, don't hesitate to contact their customer support or claims department for assistance.

By following these steps, you can effectively file a claim for credit card primary auto insurance and receive the benefits of the coverage provided by your credit card company. Remember to carefully review your policy details and stay informed about any updates or changes to your coverage.

Rental Car Insurance Alternatives

Rental car insurance coverage can come from your personal auto policy, the rental car counter, a credit card, or a third-party insurer. Here are some alternatives to the primary auto insurance offered by rental car companies.

Your Personal Auto Policy

In most cases, your auto insurance policy will provide equivalent coverage for a rental car as long as you use it for personal purposes. For example, if you have comprehensive and collision insurance, your rental car will likely be covered if it’s damaged, stolen, or totaled, as long as the rental is of similar value to your own vehicle. Your deductible will still apply if you file a claim with your insurer. If you don't have comprehensive or collision coverage, or you're renting a luxury vehicle, you can purchase a loss-damage waiver (LDW) from the rental company.

Credit Card Coverage

Many credit cards offer secondary rental car coverage, which means that your own auto insurance policy will pay out first if it's available. However, some premium credit cards offer primary car rental insurance, which means it kicks in before your personal auto insurance. Notable cards that offer primary rental car coverage include:

• Chase Sapphire Preferred Card
• Chase Sapphire Reserve Card
• Capital One Venture X Card
• United Explorer Card
• United Club Infinite Card
• Ritz-Carlton Visa Infinite Card
• J.P. Morgan Reserve Card

American Express cards offer primary coverage for a flat rate of $19.95 or $24.95 for rentals of up to 42 days. This coverage does not include car rentals in Australia, Ireland, Israel, Italy, Jamaica, and New Zealand.

It's important to note that credit card rental car coverage usually excludes certain types of vehicles, such as luxury cars, passenger vans, or specialty vehicles. Additionally, coverage may only be valid for a limited period, typically around 30 days.

Third-Party Insurer

Some companies sell standalone policies for rental cars if you don't want to buy insurance from the rental company. These policies can be purchased from companies like Allianz, Bonzah, Rental Cover, and Sure.

When considering rental car insurance alternatives, it's important to understand the different types of coverage offered and any exclusions or limitations that may apply. It's also crucial to review your own auto insurance policy and credit card benefits to determine what coverage you already have and if there are any gaps that need to be filled.

Primary Rental Car Insurance Coverage

When renting a car, you will likely be offered insurance by the rental company, known as a Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW). This can be expensive, costing up to $35 per day. However, if you pay with certain credit cards, you may be covered by their primary rental car insurance.

To use your credit card's primary rental car insurance, you must pay for the rental car with that card and decline the CDW/LDW offered by the rental company. It's important to note that primary rental car insurance usually does not include liability insurance, so you may be personally liable for any damage to other vehicles or injuries to others in an accident.

Not all credit cards offer primary rental car insurance. It is typically a benefit of premium or top-tier cards. Examples of cards that offer this coverage include:

• Chase Sapphire Preferred Card
• Chase Sapphire Reserve Card
• Capital One Venture X Card
• United Explorer Card
• United Club Infinite Card
• Ritz-Carlton Visa Infinite Card
• J.P. Morgan Reserve Card
• Ink Business Preferred Credit Card (for business rentals)

American Express cards do not include complimentary primary coverage, but cardholders can purchase it for a flat rate per rental.

Primary rental car insurance from credit cards usually has some limitations and exclusions. For example, it may only cover rentals for a certain number of days (typically up to 30 or 42 days) and may not be valid in certain countries (commonly excluding Australia, Israel, Italy, Ireland, Jamaica, and New Zealand). Additionally, not all types of vehicles may be covered; luxury or exotic cars, passenger vans, and specialty vehicles are often excluded.

It's important to carefully review the terms and conditions of your credit card's primary rental car insurance before relying on it. Contact the customer service number on the back of your card to get the full details.

Frequently asked questions