Does my credit card cover rental car insurance?
If your credit card offers rental car insurance coverage as a benefit, can you turn down the agency’s coverage, take the keys and drive off without worry? We’ll go over the details, but always check with your credit card company before renting to confirm … as we all know “terms and conditions are subject to change.”
How it works
First of all, in order to qualify for credit card collision damage waiver coverage you will need to decline the rental car company’s insurance (despite the sometimes intense sales pressure that the agent at the counter may impose on you) and pay for the entire rental charge using your applicable credit card. Credit card rental insurance is usually secondary, meaning that it only covers the portion of any claim not covered by your primary auto insurance policy (which generally means it will pay the deductible on your specific policy as well as any loss of use fees charged by the rental car agency). What if you don’t have regular car insurance? Then typically, but not always, the credit card coverage will kick in right away for the very first dollar in damage.
Coverage varies by card (which we will discuss more in a moment) but, generally speaking, it applies to damage, theft and vandalism — often with exceptions for damage that takes place while the insured is intoxicated, while the car is being used in a race or while the insured is engaging in a criminal act.
If you’re renting a Taurus or a Camry, you should be OK. But anything other than your run-of-the-mill passenger car may not be covered. For example, pickup trucks are almost never covered. Exotic and luxury cars (i.e, Masterati, Porsche, Jaguar, Lamborghini, Lotus), antique vehicles, full-size vans, motorcycles and some SUVs are generally not covered (check the cardmember benefits brochure that came with your card to confirm – this information can also be found online with your issuer’s website as well as the card network’s website). So to play it safe, rent a basic car and always double check with your card issuer to make sure completely understand how everything should work and any exclusions that might exist.
Let’s take a look at typical credit card car rental insurance coverage. Please note this information may be outdated and incorrect, so you will definitely need to check with your credit card company before renting to know for sure:
Cards: All American Express credit cards and charge cards
Duration: Up to 30 days
Amount of Coverage: Varies by card. The charge cards (Gold, Platinum, Centurion) seem to offer the most
Excluded Countries: Jamaica, New Zealand, Australia, Israel, Ireland, Italy. If you have a small business American Express, coverage is applicable only for rentals in the United States.
Cards: All Discover credit cards except for student versions
Duration: Up to 31 days
Amount of Coverage: Up to $25,000
Excluded Countries: None, as long as rental car company in that country allowed you to pay for the rental in full using your Discover card
Cards: All Visa Standard Credit cards, Visa Rewards Credit cards and Visa Premium Rewards cards.
Duration: Up to 15 days in your country, up to 31 days when renting outside of your home country
Amount of Coverage: Up to the actual cash value of most rental eligible cars
Excluded Countries: Ireland, Northern Ireland, Israel, Jamaica
Cards: MasterCard Gold, Platinum, World, World Elite credit cards
Duration: 15 days for Gold and Platinum, 31 days on World and World Elite
Amount of Coverage: Whichever is less: $50,000 per accident, current market value, actual repair costs
Excluded Countries: None for MasterCard World and World Elite. For Gold and Platinum the exclusions are Ireland, Israel, Jamaica, and where it is not permitted by law.
The fine print…
As you can imagine, all of these credit card car rental insurance policies come with loads of fine print. Be on the lookout for fees that are not covered. For example, most will cover “reasonable towing” fees. However, loss-of-use fees (while the car is being repaired or replaced) may not be covered if the rental company doesn’t provide your credit card company with proper documentation. “Administrative fees” (the fees rental agencies charge for processing your insurance claims) may also not be covered. Also, and I unfortunately know this from personal experience, there is a time limit for you to contact the card issuer to make a claim for whatever your primary car insurance doesn’t cover (like the deductible on your policy or any loss of use fees charged by the rental agency). When I wrecked a rental car I didn’t realize the clock was ticking and that my card had a time limit of 20 business days from the date of the accident. I was a day late but they luckily let that slide. Just be sure you know what the time exclusion is on your card’s benefits coverage.
If you didn’t pay for the rental car in full with the credit card, you definitely won’t be covered. Be sure and check to see which driver(s) will be covered. Additional drivers who aren’t secondary cardholders on your account may not be covered. There may be other exclusions depending on the issuer.
Does it really protect you?
As you can see, there are quite a few loopholes and fine print which create gaps in coverage. This is why it’s so important to check with your rental car credit card insurance policy (and not rely on this article) to determine the exact coverage you have.
If you don’t have comprehensive insurance on your own car, then I would definitely be skeptical of these secondary insurance coverage policies that credit cards offer. If you do, just make yourself aware of all the exclusions. Unfortunately, rental companies charge anywhere from $20 to $25 (plus tax!) for each day of insurance coverage if you buy it from them — and they’ll probably try to sell it to you as the better option. So, it’s probably more cost effective to add that coverage to your regular auto policy if you feel you need the coverage when traveling.
If you can, try to carry a card that has primary rental car coverage. You don’t have many options in 2015, but Diners Club cards offer it, as well as the credit card from United Airlines and the ever-popular Chase Sapphire Preferred.
A second recommendation would be if you have an American Express, you can buy optional primary insurance for $24.95 per rental from AmEx directly. It covers rentals for up to 42 consecutive days, so, if you’re renting a car for longer than a day, it’s probably cheaper to get it through your AmEx card. The other added benefit is that it is for primary coverage (not secondary) so if you back up into a concrete post, you won’t have to be concerned about the vehicle repair claim negatively impacting your regular insurance history. The accident won’t even be reported to your regular insurer (as long as the cost of the claim doesn’t exceed your American Express rental coverage). Don’t have an American Express card to do this? Then I recommend you check out the highly rewarding no-annual-fee AmEx Blue Cash Everyday.
Updated February 2016