Car rental insurance can be a stressful topic of discussion at the rental service counter. The customer service representative at the counter tells you about fees, deductibles, waivers and potential accidents, when all you want to do is get out and drive!
Did you know that your credit card could potentially make all that drama go away…FOR FREE?
There are a host of credit cards that offer car rental insurance as a benefit to cardholders who pay for their rental with the card.
But these cards are getting harder and harder to find. Many credit cards have removed this benefit in recent years.
“Credit cards have abandoned car rental coverage,” says money expert Clark Howard.
“They found it a royal and expensive pain, so they throw it everywhere.”
In this article, I’ll help you find cards that still offer rental car insurance coverage. I’ll also dive into the pros and cons of using your credit card to earn this insurance and detail some of the differences in coverage from card to card.
Primary or secondary car rental insurance: what’s the difference?
When checking to see if your credit card offers rental car insurance, you want to get as much information about the policy as possible. You can usually find the details in your card’s benefits guide.
If you are lucky enough to have coverage, one of the first things you need to determine is whether it is primary or secondary coverage.
Let’s talk about the differences between the two.
Main car rental insurance explained
When filing a claim for a rental car incident, the primary policy is the one that will be used first.
If you have primary cover from a credit card, that means it will be used before your personal auto insurance or other coverage you have.
Having primary rental insurance through your credit card is especially handy as it could save you from having to pay your personal auto insurance deductible. And it could potentially prevent your personal insurance premiums from going up because you made a claim.
However, since offering primary cover is a much riskier proposition for the card issuer, this is a rare benefit to find. Therefore, you usually only see this benefit on premium credit cards that charge an annual fee.
Secondary car rental insurance explained
Most credit cards that offer car rental insurance benefits offer secondary rental insurance.
This means you’ll need to have a primary policy in place for the rental, and those benefits will need to be exhausted before the card’s policy kicks in to help you out.
So for most drivers, that means you’ll have to file a claim with your personal auto insurance first and then use secondary coverage for further assistance.
What rental companies are trying to sell you
When we talk about the insurance coverage available at the car rental counter, it usually means collision damage waiver and damage waiver.
These are the two products that rental companies try to sell you to insure against any damage to the car. Basically, they ask you to pay a daily fee so they agree not to hold you responsible for damage to the vehicle.
It should be noted that these do not cover bodily injury to you, your passengers or people in other vehicles if you are involved in an accident.
That’s why it’s important to make sure you’re adequately covered by your main car insurer before renting a car.
Best Credit Cards for Primary Car Rental Insurance
Finding a credit card that offers this is increasingly difficult. However, there are still a few cards on the market that will give you primary rental insurance if you use the card to pay for the rental.
Here is a list and information about the other benefits offered by the cards.
Best Credit Cards for Secondary Car Rental Insurance
This is easier coverage to find on a credit card. This is because you must first file a claim with your personal auto insurance company. And, of course, that means your credit card issuer isn’t liable for as much damage.
But even this advantage is diminishing. Over the past few years, we’ve seen popular cards such as Costco Anywhere Visa and Fidelity Rewards Visa remove this benefit. All Discover cards dropped rental car coverage in 2018.
But a large list of American Express cards still offer it. Clark now gets his car rental insurance coverage from an Amex card after years of using his Costco card for that.
Here’s a look at some of the best cards that still offer the secondary rental insurance benefit.
5 things to know before using a credit card for car rental insurance
Before heading to the rental counter, make sure you know what to expect when using your credit card’s car rental insurance:
1. Decline, decline, decline
In addition to using your qualified credit card as payment for your rental, you generally must decline the rental company’s secondary insurance offer for your credit card coverage to be valid.
It is a requirement, but also a blessing.
Think of it as your guilt-free pass to fend off the rental attendant’s persistent demands that you pay them more money.
2. Your coverage window will be limited
Each card has a limit to the number of days your rental will be eligible for coverage.
Typically, you’re looking at up to a month of coverage with Amex cards and Chase cards, but you’ll want to check your limits before renting.
If you’re planning a three-month trip with your rental car, you might want to explore other options for insurance.
American Express offers a program which allows you to pay extra with your qualified credit card to benefit from primary insurance on a rental of up to 42 consecutive days. It’s probably even cheaper than the daily insurance rate at the rental counter, so check it out before you rent.
3. It may not work everywhere
When it comes to renting a car, not all countries are created equal.
If you are renting from the US you should be fine.
But international rentals will definitely require checking your card’s benefit guide to make sure your destination country isn’t excluded.
For example, Capital One excludes Jamaica and Israel.
Things like traffic laws, road conditions, and accident rates are likely some of the deciding factors for credit card benefit issuers when it comes to these exclusions.
4. Not all types of vehicles are covered
When you read your card’s benefit guide, you may be surprised to see that there are stipulations about what type of vehicles are eligible for rental coverage.
Large vans, motorcycles and motorhomes are likely to be excluded.
And if you’re renting a super-expensive Lamborghini for a spin around town, your card is unlikely to cover that either.
5. Bad behavior can void coverage
Card issuers often add “negligent” behavior disclaimers as grounds for voiding your rental coverage benefits.
This can include things like leaving your rental car running and unattended, allowing someone without a license to drive, or driving your rental under the influence of drugs or alcohol.
Again, a visit to the card’s benefits guide is likely to highlight which of these exclusions are part of your coverage.
If you are the type to travel often, renting a car is sometimes a must. And if you’re going to do this often enough, you’ll need to make sure you’ve mitigated the risk by being properly insured.
In this context, you are a strong candidate for one of these cards. Having a credit card that gives you free primary or secondary car rental insurance can relieve you of a huge burden at the rental counter.
But remember: Money expert Clark Howard says the temporary benefit of a credit card should never come before the long-term merits of having the card in your wallet.
So before you sign up for a card just for this benefit, make sure you already have a card in your wallet that gives you good spending rewards, a low APR, and preferably has no annual fee.
To view rates and fees for the featured American Express cards, please visit the following links: Blue Cash Preferred® Card from American Express: see Rates and Fees; American Express Blue Cash Everyday® card: See rates and fees
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