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Many credit cards nowadays focus on travel benefits and travel rewards, including some form of car rental insurance. It can be a huge money saver – but be sure to read the fine print and know which card to use. Not all protections are equal.
What kind of protection do credit cards for car rental insurance generally offer?
Most premium travel cards, such as the Citi Prestige, Chase Sapphire Preferred and Reserve, and other Chase and Citi cards offer coverage that covers damage to your rental vehicle. You will likely be covered if you (involuntarily) damage the car you rented. This can save you quite a bit of money.
It will allow you to decline the collision damage waiver (CDW) and loss damage waiver (LDW) from the rental agency. Both can be as high as $10-$30 per day, depending on where and when you rent the car. Note that you are actually required to decline to agency’s coverage for the credit card insurance to kick in.
Be aware that American Express cards do not include the same type of protection (even the Platinum card). If you intend to use an Amex as one of your credit cards for car rental insurance, you should look into their supplemental coverage for $19.95 per rental. It will automatically be charged to your card account when you swipe your card at a rental agency.
This is still usually a better deal than the insurance offered through the car rental agency. Platinum cardholders should keep in mind that if they are stranded in a vehicle, they get free towing within 10 miles just for being in the car – you don’t need to be the driver.
What credit cards offer primary coverage, and why do you need it?
Chase’s all-star cards, the Chase Sapphire Preferred® and Chase Sapphire Reserve® are probably the top choices for a car rental. Not only do they have a relevant category bonus (2x and 3x on travel), but they also beat the competition by offering primary coverage. Many other cards’ coverage is secondary.
This means that in case of an accident, you do not have to go through your main car insurance policy. Therefore, your personal insurance premiums won’t be affected if you have an accident in your rental car. If you are only offered secondary coverage through a credit card, you are required to first submit a claim to your personal car insurance. Your car benefits will cover only what your personal insurance won’t.
Note that, for people who do not have a car and thus do not have their own car insurance, even a secondary coverage would be treated as primary. Similarly, most car insurance won’t cover outside of the U.S., in which case credit card secondary coverage will also be treated as primary.
What do credit cards for car rental insurance NOT cover?
Liability insurance is simply never included in credit card car rental insurance. This means that if you do not have liability coverage from your personal car insurance, you should most definitely accept the rental agency’s liability insurance. Liability insurance will cover the damage caused to third parties by the vehicle you are driving. That damage can be costly if you’re involved in a serious accident. You shouldn’t drive without it.
Also, check the fine print if you are traveling abroad: some countries may not be covered. Australia, Israel, Italy, Ireland (and Northern Ireland), Jamaica, and New Zealand are excluded from some credit cards. If you plan to drive in one of these countries, you should double check that your credit card still has you covered.
Similarly, some vehicle types or brands are often excluded. Check before you rent to avoid any bad surprises down the road.
Long-term rentals can also void your credit card’s coverage. It makes sense, as credit cards for car rental insurance aren’t there to replace a full car insurance policy. Double-check the fine print if you are renting for more than 30 days. Most credit card insurances won’t even cover the first 30 days if the rental contract states that the rental period is longer than that.
Points and Miles Users – a Word of Caution
Most cards will require you to pay for the car rental in full with your credit card. What about those hard-earned Hertz or Avis points that you want to redeem, then? Don’t worry, it’s still worth using them. But for car rental awards, you will want to remember to accept the insurance from the rental agency. You can also check that your own personal car insurance will cover you.
One exception is using Chase Ultimate Rewards points through the UR travel portal. If you pay for your car rental with your UR points directly, you will benefit from the same car rental insurance your Chase Sapphire Preferred or Chase Sapphire Reserve normally offers a paid rental. But then again, you might find better value in using your UR points for flights or Hyatt stays.
Final Thoughts on Credit Cards for Car Rental Insurance
Carrying a credit card that offers car rental insurance coverage can be a big money saver. However, make sure you read the fine print that comes with your card so you don’t have problems if you ever need to submit a claim.
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