How Credit Cards With Car Rental Insurance Could Save You Big Bucks

Susan Shain

Susan Shain | Blog

Nov 10, 2018 | Updated Nov 11, 2018

For years, I panicked whenever a car rental agent asked me: “Would you like to add insurance?”

I’d always heard it was a scam… but I also didn’t want to be screwed if something happened. What was the right choice?

Luckily, I finally did the research — and discovered my credit card has my back when it comes to car rental insurance. Now I say “no” with confidence at the rental counter.

Here’s how it works.

Do You Need Car Rental Insurance?

The first thing to know is there’s not just one type of car rental insurance. An agent will likely offer you an assortment of options. These two are the most important:

  • Loss or collision damage waiver (LDW or CDW): While not technically “insurance,” this waiver covers the rental car in case of damage, loss, or theft.
  • Liability: This insurance protects against damage to other people or property.

Whether or not you need these depends greatly on the personal auto insurance — and the credit cards — you already have.

1. If you’re a car owner with comprehensive auto insurance, you probably don’t need to purchase either. Your regular plan will usually cover your rental, aside from loss-of-use and other administrative fees.

How a card could help: Certain credit cards offer primary coverage and allow you to bypass your regular insurance completely, avoiding deductibles and premium hikes. Other cards have secondary coverage, which will at least cover whatever your insurance doesn’t.

2. If you’re a car owner with liability insurance only (and not collision), then you’d need to purchase the CDW to protect against the costs of damage.

How a card could help: If you carry liability through your regular insurance, a credit card can cover damages, allowing you to decline the CDW.

3. If you don’t own a car — and therefore don’t have liability or collision insurance, you’d need to purchase both liability and the CDW. While car rental agencies are required to have the minimum liability coverage for their state, it probably wouldn’t be enough to cover a major accident.

How a card could help: The card could cover damages, allowing you to decline the CDW. To cover liability, you could purchase the rental agency’s policy or seek out a non-owner insurance policy.

The rental car company may also offer you personal accident and personal effects insurance, which cover medical bills and items within the car. If you have health insurance and homeowner’s, renter’s, or travel insurance, these probably aren’t necessary.

How Does Credit Card Car Rental Insurance Work?

Many of the best travel credit cards count car rental insurance among their benefits, but you’ll also find it on many cards without annual fees. To be eligible for your credit card’s car rental insurance, you must:

  • Pay for the entire rental with your credit card.
  • Be listed as the primary driver.
  • Decline the agency’s damage waivers.

Then, if something happens with your rental car, you can file a claim with your credit card. Its benefits will kick in either before or after your regular auto insurance, depending on whether your card’s coverage is “primary” or “secondary.”

  • Primary: Acts as the main insurance on your rental car, so your regular car insurance company won’t even be contacted. 
  • Secondary: Only applies once your regular car insurance has been maxed out.

Clearly, primary coverage is preferable, because it doesn’t involve your auto insurer. Which means you won’t risk paying a deductible or increasing your premium.

Though Chase has the most options with primary coverage, its policies vary by card. The Chase Freedom car rental insurance, for example, is secondary, but the Chase Sapphire Preferred car rental insurance is primary. The majority of other credit card companies offer secondary coverage on most of their cards.

It’s worth noting, though, that most secondary insurance policies become primary in two situations:

  • If you don’t have your own car insurance (but remember it’ll only cover damage, and not liability)
  • If you’re traveling in a country where your regular car insurance doesn’t work
Although American Express car rental insurance is normally secondary, the company offers a program called Premium Car Rental Protection. It allows you to pay a fee of $19.95–$24.95 each time you rent a car for up to 42 days of primary coverage.

4 Questions to Ask About Credit Card Rental Car Insurance

Because every credit card’s policy is so different, we strongly encourage you to check your card’s Guide to Benefits or contact your card’s customer service department before renting a car.

Get a copy of your card’s policy in print or online (and read it!), and be sure to ask these questions:

  • Which types of vehicles are covered? Most of the time, trucks and exotic, specialty, and luxury cars aren’t covered by credit card car rental insurance. Neither are peer car rental services like Zipcar. Notable exceptions include Citi and Amex cards, which often cover expensive cars.
  • Which countries are covered? Many credit card insurance policies exclude certain foreign countries like Ireland, Jamaica, Israel, Italy, Australia, and New Zealand. Citi and Chase cards often don’t have these restrictions.
  • Is loss of use covered? If a rental vehicle gets damaged or lost, the agency will usually charge for “loss of use” while it’s getting repaired or replaced. Visa cards usually cover these fees; other cards vary.
  • How long am I covered? Most credit cards offer coverage for a rental period of 15–30 days.

4 Best Credit Cards With Car Rental Insurance

When it comes to car rental insurance, certain credit card companies stand out. Our favorite picks are all from Chase.

The following cards provide primary coverage, have no country restrictions, offer coverage for up to 31 days, and cover loss-of-use fees. And if you use Ultimate Rewards points to book your rental, you’ll still receive coverage.

We're currently unable to link directly to an application for the Chase Sapphire Preferred Card, but you can learn more here, on our advertising partner's website.

Key Features & Terms

  • Annual fee: $95, $0 first year
  • Introductory bonus: 50,000 Ultimate Rewards points after spending $4,000 in the first 3 months
  • Rewards: 2X points per dollar on travel and dining; 1X on everything else
  • Perks: No foreign transaction fees; 25% point bonus when booking through the Ultimate Rewards portal; point transfer to airline and hotel loyalty programs

Read more about this card’s car rental benefits.

 

We're currently unable to link directly to an application for the Chase Sapphire Reserve, but you can learn more here, on our advertising partner's website.

Key Features & Terms

  • Annual fee: $450
  • Introductory bonus: 50,000 Ultimate Rewards points after spending $4,000 in the first 3 months
  • Rewards: 3X points per dollar on travel and dining; 1X on everything else
  • Perks: No foreign transaction fees; 50% point bonus when booking through the Ultimate Rewards portal; $300 annual travel credit; Priority Pass Select membership; point transfer to airline and hotel loyalty programs

Read more about this card’s car rental benefits.

 

We're currently unable to link directly to an application for the United Explorer Card, but you can learn more here, on our advertising partner's website.

Key Features & Terms

  • Annual fee: $95, $0 first year
  • Introductory bonus: 40,000 bonus miles after spending $2,000 in the first 3 months
  • Rewards: 2X miles per dollar on United purchases, hotel stays purchased directly from hotels, and restaurant bills; 1X on everything else
  • Perks: No foreign transaction fees; free checked bag; 25% discount on eligible in-flight purchases; Global Entry or TSA Pre✓ application fee credit

Read more about this card’s car rental benefits.

 

We're currently unable to link directly to an application for the Chase Ink Business Preferred Credit Card, but you can learn more here, on our advertising partner's website.

If you frequently travel for work, you should consider getting a business credit card. Just note business cards usually don’t cover car rentals for personal travel. Thanks to its generous introductory bonus and rental insurance, the Chase Ink Business Preferred Credit Card (Review) is our pick.

Key Features & Terms

  • Annual fee: $95
  • Introductory bonus: 80,000 Ultimate Rewards points after spending $5,000 in the first 3 months
  • Rewards: 3X points per dollar on the first $150,000 spent annually on travel, shipping, online advertising, internet, cable, and phone services; 1X on everything else
  • Perks: No foreign transaction fees; 25% point bonus when booking through the Ultimate Rewards portal; point transfer to airline and hotel loyalty programs

Read more about this card’s car rental benefits.

You’ll also get the same type of primary coverage from the no annual fee cards in the Ink Business lineup, the Chase Ink Business Cash Credit Card (Review) and Chase Ink Business Unlimited (Review).

Check out some more credit cards that offer primary rental car insurance at the bottom of this post.

Wrapping Up

Credit cards that cover car rental insurance can save you a lot of money, although this is usually seen as a minor benefit compared to more exciting rewards and perks.

Say you rent a car for three days, three times a year. At an estimated cost of $20 per day for insurance, that adds up to $180 per year — about twice as much as the annual fee for the Chase Sapphire Preferred Card (Review), which comes with a whole slew of other benefits, too.

So when considering which of the best credit cards to apply for, don’t overlook potential savings from car rental benefits!

Other Credit Cards with Primary Rental Car Insurance

Consumer Cards

Business Cards

We're currently unable to link directly to an application for the Chase Ink Business Cash Credit Card, but you can learn more here, on our advertising partner's website.

We're currently unable to link directly to an application for the Chase Ink Business Unlimited, but you can learn more here, on our advertising partner's website.

We're currently unable to link directly to an application for the Southwest Rapid Rewards® Premier Business Credit Card, but you can learn more here, on our advertising partner's website.

*It’s rumored that the Costco Anywhere Visa Business Card offers primary coverage, but we haven’t been able to confirm.

 

We're currently unable to link directly to an application for the Capital One® Spark® Cash for Business, but you can learn more here, on our advertising partner's website.

We're currently unable to link directly to an application for the Capital One® Spark® Cash Select for Business, but you can learn more here, on our advertising partner's website.

We're currently unable to link directly to an application for the Capital One® Spark® Miles for Business, but you can learn more here, on our advertising partner's website.

We're currently unable to link directly to an application for the Capital One® Spark® Miles Select for Business, but you can learn more here, on our advertising partner's website.

We're currently unable to link directly to an application for the Capital One® Spark® Classic for Business, but you can learn more here, on our advertising partner's website.

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