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

6 min read
Susan Shain By Susan Shain Nov 10, 2018 | Updated Nov 19, 2019

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.

Credit Cards With Car Rental Insurance

Cards & Rewards Annual Fee
Chase Sapphire Reserve®

  • 3X Ultimate Rewards points on:
    • Travel
    • Dining
  • 1X Ultimate Rewards point on all other purchases
  • 50,000 bonus points for spending $4,000 in the first 3 months
$450
Chase Sapphire Preferred® Card

  • 2X Ultimate Rewards points on:
    • Travel
    • Dining
  • 1X Ultimate Rewards point on all other purchases
  • 60,000 bonus points for spending $4,000 in the first 3 months
$95
United℠ Explorer Card

  • 2X United miles for:
    • United purchases
    • Hotel accommodations made directly with the hotel
    • Restaurants
  • 1X United mile on all other purchases
  • 40,000 bonus miles for spending $2,000 in the first 3 months; 25,000 bonus miles for spending $10,000 in the first 6 months
$0 introductory annual fee for the first year, then $95.
Ink Business Preferred℠ Credit Card

  • 3X Ultimate Rewards points on the first $150,000 spent per year on:
    • Travel
    • Shipping
    • Internet, cable, and phone services
    • Advertising purchases made with social media sites and search engines
  • 1X Ultimate Rewards point on all other purchases
  • 80,000 bonus points for spending $5,000 in the first 3 months
$95

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 own insurance. 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.

5 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. Chase’s rental coverage may also exclude vehicles with open beds, and motorcycles.
  • 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.
Learn More

Am I still covered if I use reward points to purchase my rental?

Each issuer has its own terms regarding what qualifies for the rental car coverage that comes with your card.

Certain Chase cards that earn Ultimate Rewards points, for example (like the ones below), allow cardholders to use rewards to cover their rental fee while still receiving insurance. Conversely, some cards may require you to use your card to pay for the rental in full before becoming eligible for insurance. Always check with your issuer to fully understand the terms and conditions.

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 travel rewards cards provide primary insurance coverage, have no country restrictions, offer rental car 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.

Chase Sapphire Preferred® Card

Chase Sapphire Preferred® Card

Our rating
Credit rangeGood
Details
Annual Fee$95
Regular APR17.74% - 24.74% Variable

Key Features & Terms

  • Annual fee: $95
  • Introductory bonus: 60,000 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.

 

Chase Sapphire Reserve®

Chase Sapphire Reserve®

Our rating
Credit rangeExcellent
Details
Annual Fee$450
Regular APR18.74% - 25.74% Variable

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.

 

United℠ Explorer Card

United℠ Explorer Card

Our rating
Credit rangeGood
Details
Annual Fee$0 introductory annual fee for the first year, then $95.
Regular APR18.24% - 25.24% Variable

Key Features & Terms

  • Annual fee: $0 introductory annual fee for the first year, then $95.
  • Introductory bonus: 40,000 bonus miles for spending $2,000 in the first 3 months; 25,000 bonus miles for spending $10,000 in the first 6 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.

 

Ink Business Preferred℠ Credit Card

Ink Business Preferred℠ Credit Card

Our rating
Credit rangeExcellent
Details
Annual Fee$95
Regular APR17.74% - 22.74% Variable

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 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 redeeming for travel through the Ultimate Rewards portal; point transfer to airline and hotel loyalty programs

Read more about this card’s car rental benefits.

Cardholders also get the same type of primary coverage from the no annual fee cards in the Ink Business lineup, the Ink Business Cash℠ Credit Card (Review) and Ink Business Unlimited℠ Credit Card (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!

You can rent a car with a debit card, but we don’t recommend it, and insurance coverage is just one of several reasons why.

Other Credit Cards with Primary Rental Car Insurance

Consumer Cards

United MileagePlus® Club Card

United MileagePlus® Club Card

Our rating
Credit rangeGood
Details
Annual Fee$450
Regular APR18.24%–25.24% Variable
Apply Now

securely on the issuer's website

U.S. Bank Altitude Reserve Visa Infinite® Card

U.S. Bank Altitude Reserve Visa Infinite® Card

Our rating
Credit rangeExcellent
Details
Annual Fee$400
Regular APR17.49% Variable
Apply Now

securely on the issuer's website

JP Morgan Reserve Card

JP Morgan Reserve Card

Our rating
Credit rangeExcellent
Details
Annual Fee$595
Regular APR
Diners Club Credit Card

Diners Club Credit Card

Our rating
Credit rangeGood
Details
Annual Fee$95
Regular APR13.15% Variable
Apply Now

securely on the issuer's website

Business Cards

Ink Business Cash℠ Credit Card

Ink Business Cash℠ Credit Card

Our rating
Credit rangeExcellent
Details
Annual Fee$0
Regular APR14.99% - 20.99% Variable
Ink Business Unlimited℠ Credit Card

Ink Business Unlimited℠ Credit Card

Our rating
Credit rangeGood
Details
Annual Fee$0
Regular APR14.99% - 20.99% Variable
United MileagePlus® Club Business Card

United MileagePlus® Club Business Card

Our rating
Credit rangeGood
Details
Annual Fee$450
Regular APR18.24%–25.24% Variable
Apply Now

securely on the issuer's website

United℠ Explorer Business Card

United℠ Explorer Business Card

Our rating
Credit rangeGood
Details
Annual Fee$95
Regular APR17.74% - 24.74% Variable
Southwest Rapid Rewards® Premier Business Credit Card

Southwest Rapid Rewards® Premier Business Credit Card

Our rating
Credit rangeGood
Details
Annual Fee$99
Regular APR17.74% - 24.74% Variable
Costco Anywhere Visa® Business Card by Citi

Costco Anywhere Visa® Business Card by Citi

Our rating
Credit rangeFair
Details
Annual Fee$0 (Costco membership required)
Regular APR17.49% Variable
Apply Now

securely on the issuer's website

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

Capital One® Spark® Cash for Business

Capital One® Spark® Cash for Business

Our rating
Credit rangeGood
Details
Annual Fee$0 intro for first year; $95 after that
Regular APR18.74% (Variable)
Capital One® Spark® Cash Select for Business

Capital One® Spark® Cash Select for Business

Our rating
Credit rangeGood
Details
Annual Fee$0
Regular APR14.74% - 22.74% (Variable)
Capital One® Spark® Miles for Business

Capital One® Spark® Miles for Business

Our rating
Credit rangeGood
Details
Annual Fee$0 intro for first year; $95 after that
Regular APR18.74% (Variable)
Capital One® Spark® Miles Select for Business

Capital One® Spark® Miles Select for Business

Our rating
Credit rangeGood
Details
Annual Fee$0
Regular APR14.74% - 22.74% (Variable)
Capital One® Spark® Classic for Business

Capital One® Spark® Classic for Business

Our rating
Credit rangeFair
Details
Annual Fee$0
Regular APR24.74% (Variable)
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AT A GLANCE

Whether traveling for work or for pleasure, do so with confidence. Equip your wallet with a credit card that offers car rental insurance to get the additional support you need when on the road.

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