Credit Card Rental Car Insurance: What Is It, and How Does It Work? (2024)

What Is Credit Card Rental Car Insurance?

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 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 traveler 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 circ*mstances, the secondary coverage can become primary.

Key Takeaways

Credit card car rental coverage requires putting the entire rental cost on the card providing coverage.
Credit card rental car coverage commonly covers the rental car’s losses and damages related to collision and theft.
Vandalism and natural disasters may also be covered.
Primary coverage means the card’s coverage is first in line to pay your bills before your personal auto insurance. It may be offered by premium credit cards.
Secondary coverage only applies after other auto insurance coverage has been applied.

How Does Rental Car Insurance Work?

For the credit card insurance to work, you must put the entire cost of the car rental on the card offering the coverage without splitting costs with other credit cards. When you pick up your car at the auto rental desk, you should decline any waivers or other types of coverage the rental company offers.

Your credit card’s rental car coverage usually doesn’t come with a fee or charge a deductible for a claim. If you’re in an accident or another loss occurs, your credit card rental insurance helps pay for damages to the rental car. While primary and secondary coverage differ somewhat, many of the features below are true for both types.

What Is Covered by Rental Car Coverage?

The wording may vary slightly, but typically, damage or losses from theft or collision are always covered. Damage from natural disasters or vandalism may also be covered. Call your insurer to ask what’s covered and what isn’t.

This insurance also typically pays for:

Auto repair or replacement
Loss-of-use charges from the rental agency, up to a limit
Towing charges
Administrative fees

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.

Note

If the coverage isn’t broad enough, you may want to buy the rental agency’s damage waiver after ensuring that it covers most or all auto damage situations.

Auto Claims Not Covered by Rental Car Coverage

If you have a personal auto insurance policy for a car you drive at home, it likely covers many auto-related injuries and damages that the credit card won’t. 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 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

Who Is Covered?

The rental coverage covers the cardholder, any other drivers on the car rental agreement, and potentially your spouse or domestic partner. If you let another person drive your rental car and they weren’t listed as an authorized driver on the rental agreement, any damage they cause in a wreck may not be covered.

Coverage Amounts

Coverage amounts often limit the cost of repairing or replacing a vehicle. Typically, this is described as the car’s actual cash value or based on a manufacturer’s original retail price, such as $50,000 or $75,000. The card may also set cost limits on the per-incident amounts for loss-of-use charges.

Time Limits

Card-based coverage typically features time limits of 15 to 30 consecutive days. The limits usually depend on where you’re renting the vehicle, with longer limits more widely available abroad.

So, for example, if you want to rent a car for more than 15 days, you may need to turn the car in and rent a new car for a new rental period. The limits may vary based on where you’ve rented the car, with longer time limits abroad vs. in the United States.

Declining Coverage

To activate your card’s coverage, you must decline the rental company’s collision damage waiver (CDW) or damage waiver. If you don’t, it will typically void any benefit you could gain from your card coverage. However, most credit cards don’t cover personal property or may not cover other damages—leaving a potential coverage gap.

There’s at least one exception to how rental car insurance usually works. In addition to offering free secondary rental car insurance, American Express cards are eligible for a special primary coverage program called Premium Car Rental Protection. You can opt-in or add this coverage to cards and pay a low, flat fee per rental. Notable and unusual features include:

Coverage for up to 42 days, which is longer than usual
Higher limits (up to $100,000) than many primary coverage cards offer
Coverage for vehicles that most cards don’t cover, including luxury cars and pickup trucks
Secondary medical coverage, which steps in after your primary health coverage
Accidental death or dismemberment coverage for drivers and passengers

Credit Card Rental Car Coverage Exclusions

Be sure to read the fine print to understand what is not included in your credit card rental insurance. Some common exclusions are related to vehicle types, such as excluding luxury vehicles or pickup trucks, but there are other exclusions to watch out for.

Vehicle Types

Card coverage usually doesn’t extend to luxury, classic, and high-value vehicles such asFerraris, Maseratis, McLarens, Porsches, and even Teslas. Any car with a manufacturer’s suggested retail price (MSRP) above a specific limit (for example, $50,000 or $75,000) may be excluded. Call the card company or benefits administrator to ensure that the vehicle make or type you are renting is covered by the credit card rental car insurance.

Other frequently excluded vehicles include:

Antique vehicles, or cars that are more than 20 years old or haven’t been in production for 10 or more years
All trucks, pickups, and other vehicles with an open cargo bed; sport utility trucks
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
Trailers, motorbikes, and motorcycles
Cars rented through a car sharing company

Countries

Countries often excluded from coverage are:

Australia
Ireland
Israel
Italy
Jamaica
New Zealand
Nations where rental is a violation of U.S. sanctions

If you plan to use your card outside the U.S., call the benefits administrator and ask about coverage in the nation you’re visiting.

Other Exclusions

Many other exclusions focus on how or why you were driving the rental vehicle if you get into an accident that results in damage. These exclusions might include:

	Varieties	Annual Fee	Covers	Limit	Special Conditions
Chase Sapphire	•Reserve •Preferred	Reserve $550 Preferred $95	Theft and collision damage	Reserve: $75,000 Preferred: Car’s actual cash value
Chase United MileagePlus	•Explorer •Quest •Club Visa Infinite	$0–$525	Theft and collision damage	Vehicle’s actual cash value
Chase UnitedBusiness Cards	•Club Business •Business	$0–$450	Theft and collision damage	Vehicle’s actual cash value	Primary when renting for business purposes
Chase InkBusiness	•Preferred •Premier •Unlimited •Cash	$0–$195	Theft and collision damage	Vehicle’s actual cash value	Primary when renting for business purposes
Wells Fargo Bilt World Elite Mastercard		$0	Covered accident and theft	$50,000
U.S. Bank Altitude Reserve		$400	Theft and damage	$75,000
Capital One Venture X Rewards		$395	Theft or collision	$75,000
Bank of America Premium Rewards Elite		$550	Collision or theft	$75,000
American Express Premium Car Rental Protection	Two levels available for all Amex cards	Coverage fee is $12.25–$24.95 per rental, depending on the state of residence	Damage or theft	Up to $100,000	Includes secondary medical coverage and driver and passenger accidental death or dismemberment coverage

What Does Primary Rental Car Insurance Cover?

Your credit card’s guide to benefits will list whether insurance coverage is primary or secondary. Primary auto coverage, which is less common, means the card’s coverage is first in line to pay your bills before your personal auto insurance. You won’t need to file a claim or pay a deductible with your own insurance company if you’re in an accident.

A claim relying on your personal car insurance could lead to higher rates in the future. However, even if you avoid filing a claim with your auto insurance and rely on primary card coverage, your personal insurance rates could still increase if you caused an accident that goes on your driving record.

Primary vs. Secondary Rental Car Insurance

Secondary auto coverage is more common among credit card rental car insurance. Secondary coverage applies after you’ve filed a damages claim with your personal auto policy. In this case, the card coverage might pay your deductible or the difference between what your insurer is willing to pay and the rental company’s claim.

Secondary coverage may become primary coverage in some cases, such as when you’re traveling outside the U.S. If you don’t have any other auto insurance, your secondary card coverage becomes your primary coverage by default, in most cases.

In other cases, primary coverage can become secondary coverage. For example, some coverage is only primary if you use the vehicle for business purposes. If you put the rental car on your business card but use the vehicle for vacation purposes, card coverage may switch to secondary.

Primary vs. Secondary Example

Suppose you’re renting a car in Oklahoma for a week. You decline the damage waiver at the car rental company’s checkout desk and charge the entire week’s amount on your card, which offers primary rental car insurance. You’re in an accident, crumpling the front fender. The rental company repairs the fender for $1,500, and your card’s auto damage coverage pays the claim.

If your card offered secondary coverage, you would first file a claim with your personal auto insurer. Let’s say you have a $500 deductible. Your insurance company would pay $1,000 for repairs, and you would then have to pay the $500 deductible. You could file a claim with your card company to get reimbursed for the $500 deductible.

How to File a Claim for Credit Card Rental Car Insurance

In general, the claim-filing process can be fairly similar to filing a claim with standard auto insurance.

Step 1: Notify the Car Rental Company of Your Claim or Incident

You’ll contact the claims administrator and tell them of the incident within 30 to 45 days or as soon as required by your guide to card benefits. The company will provide instructions for the next steps, including documentation.

If your credit card only offers secondary coverage, file a claim with your personal auto insurance as soon as possible, because you may need to provide documentation of what’s covered there before the credit card claims process can proceed. You may still need to meet the card company’s deadline for filing, so timing can be tight.

Step 2: Show Proof of Loss

You’ll receive a claim form to return within 60 to 90 days of the accident or other requirements. Documentation might include:

Damage: Police report (if applicable), accident report form, itemized repair estimate and final bill, photos of the damaged vehicle, rental company’s claim or costs documents and correspondence
Payment: Proof that you paid for the rental vehicle or rental agreement with your card that provides coverage, the written agreement showing the rental vehicle’s checkout and check-in, and any payments you’ve made toward the rental company’s claim
Your coverage and contract: Proof of your auto insurance coverage, your driver’s license, and any other available insurance information

Step 3: Receive Payment of Loss Claims

In general, you’ll receive payment for proven losses within 15 to 90 days of documentation receipt, depending upon your card company’s terms.

Alternatives to Rental Car Insurance

If you don’t want credit card coverage or a car company’s waiver, you can also use travel insurance, which may offer lower rates overall.

Do You Have to Pay with the Card That Has the Insurance?

Yes, use the same card to reserve the car and at pickup. You want to put the entire cost of the car rental on your card to access auto damage coverage, and you’ll need to decline the damage waiver offered by the rental company. But first, ensure that the card covers various damage that can occur, whether the car gets stolen or you hit a deer.

How Does Auto Insurance Work If You Split the Bill?

With some car rental companies, you can split a bill between a personal card and a business card. But speak to your card issuer about maintaining coverage on a business/personal trip. Some business cards only offer primary coverage if you use the card for business purposes.

If you want to split the rental bill with a friend, you should both call your card issuers in advance to ask about the option. Most card policies require you to put the rental’s entire cost on the card offering auto coverage benefits, which would not allow you to split the bill. However, most primary coverage cards cover you and any authorized drivers. If your friend is on the rental agreement as an authorized driver, the card should also cover qualifying damages caused by your friend.

Always call your card company to make sure you understand the rules before renting.

Is Credit Card Primary Rental Car Coverage a Type of Insurance?

This coverage may be called an “Auto Rental Collision Damage Waiver” and is not quite insurance but a waiver of fees. Unlike insurance, it’s likely not regulated by your state’s insurance department. Other card issuers may refer to it as insurance, particularly if broader coverage is provided.

The Bottom Line

When deciding between coverage options, you can choose to rely on your own insurance coverage (if applicable), the car rental company’s waivers, or your credit card rental car coverage. What’s right for you depends on your risk tolerance, how your card coverage works, and how much time you have for investigating the fine print.

No matter the terminology, read your card’s guide to benefits for:

What’s covered
What’s not covered
Time and claim limits
How to file a claim