Whether you’re renting a car for a vacation or because your own vehicle is in the shop, the representative at the counter will likely ask, “Would you like to buy additional insurance protection?” The answer isn’t always a simple yes.
In many cases, this extra cost is unnecessary. Not only does your personal auto insurance often cover rentals, but many credit cards provide built-in protection — sometimes even primary coverage — that makes expensive agency waivers redundant.
Below, we take a closer look at credit card rental insurance, including how it works and what steps you need to take to ensure your rental is covered.
Table of Contents
- What Is Credit Card Rental Car Insurance?
- Understanding Your Credit Card’s Coverage for Rentals
- How Does Credit Card Rental Insurance Work?
- Questions to Ask Your Credit Card Issuer
- Guide to Choosing the Right Credit Card for Car Rental Insurance
- Other Ways Your Card Can Protect You When You Travel
- FAQ
Key Points
• Credit card rental car insurance is an “Auto Rental Collision Damage Waiver” that protects against damage or theft of a rental car.
• This coverage is most often secondary, meaning it pays after your personal auto insurance policy does.
• Primary coverage, which is less common, allows you to file a claim directly with the card issuer without involving your personal insurance first.
• To use the benefit, you typically must pay for the entire rental with the card and decline the rental company’s collision waiver.
• Not all credit cards offer rental car coverage and among those that do, exclusions and limitations generally apply.
What Is Credit Card Rental Car Insurance?
Rental car insurance through a credit card is also called an “Auto Rental Collision Damage Waiver.” This type of rental car insurance essentially offers protection against damage or theft of your rental vehicle when you pay for it using your credit card and decline the rental company’s collision damage waiver.
Credit card rental car insurance is most commonly secondary insurance, which means it kicks in after your personal auto insurance pays. It typically covers damage to or theft of the rental vehicle itself, but not injuries, liability to others, or personal belongings in the car.
Understanding Your Credit Card’s Coverage for Rentals
When offered, credit card car rental insurance generally falls into one of two categories: primary or secondary coverage.
Primary Coverage
Though not common, some issuers offer credit card rental car insurance as primary coverage. Primary coverage means that, in the event of damage or theft, you can file a claim directly through the card issuer for reimbursement. You’re not required to file a claim through other insurance sources, like your personal auto insurance company, before the primary credit card car rental insurance benefit applies.
Secondary Coverage
More commonly, credit cards provide secondary rental car insurance protection, which kicks in after your personal auto insurance policy pays for damages. However, this coverage can be highly valuable, as it typically reimburses deductibles and other costs not covered by your primary insurance.
Recommended: How Much Auto Insurance Do You Need?
How Does Credit Card Rental Insurance Work?
Most major credit card networks (including Visa, Mastercard, and American Express) offer some form of rental car coverage. However, the extent of the coverage can vary depending on the type of card and the bank that issued it.
When a credit card offers car rental insurance, it typically covers:
• Collision/damage: Physical damage to the rental car resulting from accidents.
• Theft: Costs associated with the vehicle being stolen.
• Loss of use fees: Administrative fees and revenue lost by the rental company while the car is being repaired.
• Towing: Reasonable expenses related to towing the damaged vehicle.
However, credit card rental insurance does not replace full auto insurance. It generally does not cover:
• Liability: Damage to other people’s property or vehicles, or medical expenses for you, your passengers, or other people.
• Certain car types: Exclusions may include high-value, exotic, or antique cars, motorcycles, RVs, and trucks.
• Personal property: Items stolen from the car (this is often already covered by homeowners or renters insurance).
• Extended car rentals: Policies often cap coverage at 30 days.
Questions to Ask Your Credit Card Issuer
You can find out the details of your credit card’s coverage for rental cars by checking your “Guide to Benefits” (if you didn’t save this, you can often find it online). If you’re unclear about how your card can protect you while using a rental car, contact your issuer’s customer support number. Here are some important questions to ask:
• Does the rental car insurance benefit offer primary or secondary coverage? The answer to this question can help you choose the best payment option to use for your next rental car. It will also give you a sense of what to expect if you need to file a claim.
• What is included and not included in the coverage? In addition to reimbursements for damage, you’ll want to know if the card’s rental car insurance covers loss-of-use charges from the rental company, for example. Be clear on what isn’t eligible for reimbursement, too.
• What are the coverage timelines? Depending on your credit card issuer, the number of days when your rental coverage is in effect might be limited.
• Are there any countries in which the coverage is ineligible? Rental car insurance coverage might not be offered if the incident occurred in certain countries.
• What do I need to do to ensure I’m covered? Ask what you can do on your end to ensure your rental car is covered by the credit card’s insurance benefit. This may include putting the entire purchase on the card, declining supplemental rental insurance coverage from the rental company, or other requirements stipulated by your insurer.
• What’s the process for filing a claim? Knowing how to swiftly file a claim after an incident can offer some peace of mind during an already stressful situation.
Recommended: When Are Credit Card Payments Due?
Guide to Choosing the Right Credit Card for Car Rental Insurance
If you have multiple credit cards in your rotation that offer differing levels of credit card car insurance protection, see if one happens to offer primary coverage. This helps you avoid the added step of going through your own auto insurance company before being able to successfully file a claim through the card issuer.
The next factor for consideration is coverage amounts. Your maximum reimbursement amount may vary from one card to another, so be mindful about how high or low this limit is. Also, pay attention to the exclusions for coverage, including ineligible countries, activities (e.g. off-roading in the rental vehicle), and restrictions on vehicle type.
Other Ways Your Card Can Protect You When You Travel
When a credit card is used responsibly, it can offer many travel-related benefits. In addition to rental car insurance coverage, some credit cards provide protection for lost luggage expenses and trip interruptions.
Credit card travel insurance is especially useful if your travel plans are canceled due to reasons like severe weather or illness.
Keep in mind that many premium travel credit cards come with substantial annual fees. They typically also have higher credit score requirements.
The Takeaway
If your credit card covers rental car insurance, in many cases you can decline the duplicative car rental company’s offer for collision coverage. However, it’s worth learning whether your credit card car rental insurance coverage is primary or secondary and what its coverage limits are in case you need to file a claim.
While SoFi does not currently offer credit cards with rental car insurance, we do offer other credit cards that may suit your needs.
Looking for a new credit card? Consider credit card options that can make your money work for you. See if you're prequalified for a SoFi Credit Card.
FAQ
Do you need a credit card to rent a car?
You do not always need a credit card to rent a car, but it is highly common. Rental car companies generally require a form of payment and a hold for a security deposit. While a credit card is the most accepted method, some agencies may allow you to use a debit card, though this often comes with more restrictions, such as a credit check, a higher deposit hold, or proof of a return flight. It is best to check the specific rental company’s policy before booking.
Do all credit cards have car rental insurance?
Not all credit cards include rental car insurance and while it is a common feature of travel rewards cards, the specific level of coverage varies significantly between different cards and issuers. You can check your credit card’s benefits guide to see if you’re eligible for rental car insurance.
How do I know if my card comes with primary or secondary insurance?
You can refer to your credit card’s “Guide to Benefits” to learn whether your credit card offers car rental insurance protection and, if it does, whether it’s primary or secondary coverage. You can also contact the customer support phone number listed on the back of your credit card to speak to a representative about your specific card’s car rental insurance benefits.
Photo credit: iStock/g-stockstudio
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