Credit Card Car Rental Insurance

Posted by CreditCardGuru

The need for credit card protectionDoes 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 have to decline the rental car company’s insurance and pay for the entire rental charge using your applicable credit card. Credit car 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 entails the deductible you carry 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.

What’s covered?

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.

Vehicle exclusions

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, Jaguar, Cadillac, Infiniti), antique vehicles, full-size vans, motorcycles and some SUVs are not covered. So to play it safe, rent a basic car and always double check with your card issuer to make sure (you know how insurance coverages always provide lots of loopholes for the company offering the coverage).

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 Please note this information may be outdated and incorrect, so you will definitely need to check with your credit card company before renting to know for sure:

American Express
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.

Discover
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

Visa
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

MasterCard
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.

Other exclusions

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.

My personal recommendations

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.

If you can, try to carry a card that has primary rental car coverage would be to get primary credit card car rental insurance. You don’t have many options in 2014, but Diners Club cards offer it, as well as the credit card from United Airlines (and it has excellent rewards, too!). Honestly, if you rent cars very often then it’s truly worth it to get the United MileagePlus Explorer Card for this coverage alone, even if you never plan to fly the airline.

My 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 worry 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 September 3, 2014


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Editorial Disclosure: The editorial content on this page is not provided by any bank, credit card issuer, airline or hotel chain, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone, not those of the bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

44 comments... read them below or add your own

  1. EJT September 12, 2014 at 11:51PM

    Just went through a small claim with Amex. It was a worrisome process but they just settled so I felt relieved, however they are not paying the taxes on the repairs. The claim was in Europe so the VAT taxes are up to 25% of the total bill. Again it was a small claim but this information is something to consider.
    A question for the forum is, Amex states that they do not pay taxes “unless required by law”. How do I find out about what States it required by law?

  2. mendy August 19, 2014 at 4:19AM

    do i have to pay with the credit card that covered my insurance? or i can pay with a different card after the fact (when there was no damage to the car)?

  3. Jamie July 21, 2014 at 3:29PM

    I just purchased the premium insurance at $24.95 per rental from American Express because it includes loss of use and my regular car insurance does not. The fine print on the document (which you receive after purchasing the insurance) states that the car rental company must provide a utilization log and proof that no other car was available & that there was a demand for that rental car. Is this a realistic requirement that car rental companies will provide or does it make the loss of use pretty worthless? I will be renting from Hertz in the US and later from Alamo in Canada.

  4. Hallie Edwards May 7, 2014 at 11:22AM

    Just had my only damage claim while using VISA card for rental in Italy. VISA did not want to pay, despite my handing over the final bill with line by line damage costs because – they wanted the final actual repair bill from the rental company with itemized costs of actual repairs. They claimed that the statements I submitted didn’t have nough information, they need this, then that, no, not that, something more. VISA has agreed to a partial settlement, excluding the tax of 118 euros and an additional charge of 24 euros for another day of rental. It took many months, many copies, many emails, and I still came out with a loss. As my uncle the famous litigator said: Insurance companies make money by saying No.

  5. Larra Ieftin April 7, 2014 at 5:05AM

    hey there and thank you for your info

  6. Barb L. March 27, 2014 at 12:47PM

    Here’s a scenario that others need to know. I’ve been on the phone with myVISA people twice to find the answer…the question is; If I hire a car in Scotland and stay in in the OK, my VISA will cover what is called the EXCESS after I decline the CDW. BUT, if I take the car over the ferry to Ireland and have an incident there, my VISA will no longer cover it. I have documents from VISA that say nothing about that and I’ve been misled in the past. I’ve driven the Isles 4 times not knowing that and thank goodness I didn’t have an incident. To I’ll have to hire a car in Ireland and pay that excess myself…but not in Scotland. Anyone have any experience with that situation?

  7. Diana March 26, 2014 at 11:47AM

    MasterCard World and World Elite card have territorial exclusions in Jamaica. I just called and checked.

  8. Bill January 6, 2014 at 12:36PM

    I was just reject by AMEX because I rented an SUV. Their fine print says no full size suvs. Come on. Next time I’ll just use another car and pay the rental car insurance.

  9. German Barbagelata January 4, 2014 at 10:30AM

    Rather entertaining many thanks, I believe your visitors could possibly want significantly more content articles similar to this carry on the very good work.

  10. Joan September 13, 2013 at 8:18AM

    I will be traveling in the US for 3 months and need to rent a car, my Visa card offers auto rental coverage but the fine print is as follows: Can anyone clarify this statement?

    *** The length of time you rent the same vehicle must not exceed forty-eight (48)
    consecutive days, which shall follow one immediately after the other. In order
    to break the consecutive day cycle, a full calendar date must exist between
    rental periods. Coverage may not be extended for more than forty-eight (48)
    consecutive days by renewing or taking out a new rental agreement with the
    same or another rental agency for the same vehicle or another vehicle. ***

    It doesn’t specifically say a time period – a month? a year? a life-time?

  11. ken August 19, 2013 at 8:04AM

    I recently got the optional Amex primary coverage. It is great for peace of mind. I was renting for 15 days,so it worked out to about $1.50 a day. Loss of use is included which your regular auto policy and secondary may not cover. In many states this coverage is available in two tiers, $100,000 and for a lesser fee $75,000.
    If you choose not to want the coverage on a rental, use a non Amex card, since it is automatic and charged to your account.

  12. goingtooz August 7, 2013 at 1:30PM

    This is perhaps a bit exotic but I am a Canadian who will rent a car in Australia (Oz) in 2014.
    I have done my homework (I think) and the Oz rental sites of course mention the CDW and I believe they mentioned that it can be waived using the proper card.
    I phoned MasterCard (have their smart cash platinum plus card) to confirm coverage and I was told there are certain countries that do not allow the CDW to be waived and that Oz is one of them. Puzzling!
    I plan to phone the rental companies directly and see what gives, but has anyone here know the answer or rented in Oz lately? Thanks.

  13. Eric June 8, 2013 at 10:35PM

    this is also bad because if something happens the credit card will not cover loss of use, administration fees, or importantly replacing the rental at its full value. loss of use and administration fees can be in the thousands in a week or 2 for a standard sized car. your card says they cover you because how would it look if they said it didn’t? I’ve been in an accident with a rental and like every other renter I expected my full coverage insurance (car and credit card) to kick in and back me up $23,000 later, I should have taken that little $15 dollars a day from the insurance company. Point is, what makes you think insurance company’s want to put out money, they fight high and low to find a reason not to take care of you.

    • tomf March 17, 2014 at 9:02PM

      what makes you think your rental insurance wants to shell out money if you’re in an accident?

    • Hallie Edwards May 7, 2014 at 11:25AM

      Did you pursue your claim?

  14. MAP June 4, 2013 at 12:46PM

    I also work for rental car company and so many people are convinced that their credit card cover some for everything. The people that are the most adament or rude about declining the LDW that is offered by rental agent, are the ones who usually end up with accidents and claims not being covered. while it is completely your options to use your credit card, it is up to you to read all the fine print and know exactly what you have coverage for.

    I have so many stories about customers in a rage at us because of something your credit card didn’t cover. but unfortunately, it’s their own fault for not knowing what they were covered for.

  15. Trellopedo May 16, 2013 at 11:09PM

    I applaud all these great tips on rental car insurance. From the original author to the twenty years experienced insurance rep and those that are currently going through claims currently. I gotta tell ya’, all the times i second guessed my self ‘why have I purchased full coverage every day of the rental,’ well I realize it was worth every penny based on some of these horror stories I’ve read from you guys. Thanks for reassurance or reinsurance?? LOL Nice.

  16. Jug January 7, 2013 at 1:42AM

    I wanted to thank you for this valuable info!

  17. rob November 5, 2012 at 8:12AM

    I notice that CreditCardForum made no attempt to answer a single issue raised here – good article, but disappointing lack of response.

  18. Nick July 24, 2012 at 8:34AM

    I recently had a hit and run on my Enterprise rental car, I was required to pay Enterprise my deductible of $1000.00 it took them over a month to process the claim and come back with the total damages which were around $500, Mastercard took 5 days to process the required documents and issue me a refund for the damages that I paid. Kudos to Mastercard.

    Loss of use and administrative are usually waived depending on the relationship between the rental car company and your automobile insurance. Make sure that you file a claim with BOTH your CC company and your auto insurance. If your CC company picks up the tab and your insurance company does not pay a dime then your premiums will not go up. In my case Enterprise/Progressive have an arrangement not to bill loss of use/administrative fees to any Progressive customer and Mastercard picked up the tab for the actual damages

    • Mimi Jones July 25, 2013 at 3:26PM

      My case is similar to yours, 2 weeks ago I had a hit and run on my Enterprise rental car and I was required to pay Enterprise my deductible of $500. I called Enterprise today and they are still processing my claim. I have already filed claim with my CC company, I have yet to file a claim with my auto insurance company because of concerns of a premium increase. I am thinking about paying out of pocket to avoid that.

      In your message you recommend to file a claim with BOTH the CC company and the auto insurance, and you mentioned that your CC company picked up the tab for the actual damages. I have a question, please: Did you pay Enterprise out of pocket first, and later filed claims with CC company, and your auto insurance company?

      Thank you,

    • Mimi Jones July 26, 2013 at 12:01PM

      Nick:
      My case is similar to yours, 2 weeks ago I had a hit and run on my Enterprise rental car and I was required to pay Enterprise my deductible of $500. I called Enterprise today and they are still processing my claim. I have already filed claim with my CC company, I have yet to file a claim with my auto insurance company because of concerns of a premium increase. I am thinking about paying out of pocket to avoid that.

      In your message you recommend to file a claim with BOTH the CC company and the auto insurance, and you mentioned that your CC company picked up the tab for the actual damages. I have a question, please: Did you pay Enterprise out of pocket first, and later filed claims with CC company, and your auto insurance company?

      Thank you,

  19. Eric Dean April 30, 2012 at 8:47PM

    Hey guys, just had to make a comment! Working for a rental car company for the last 20 plus years, I have to say there are so many loop holes in the system of car rental insurance….I do want to inform everyone that most of the time when you call up your insurance provider and say hey “im renting a car”, am I covered? They usually say yes…….Red flag!!!!

    They never said what state are you in, what size car, how many days, how many passengers, etc.(and they certainly don’t tell you that you’re insurance will go sky high if you make a claim): they just want you to continue being a customer of the insurance agency.

    Also the credit card company is not always dependable (You have to meet a strict criteria). So, moral of the story READ ALL THE FINE PRINT! I’ve watched several people pay the full cash value of a car out of pocket, because they misread the fine print (sounds scary, but it’s the truth).

  20. John April 22, 2012 at 12:36PM

    All great points. I have to admit that I’m extremely irritated every time I get a rental and get asked all the questions about what insurance I want. This really gets you to thinking.

  21. lu March 30, 2012 at 1:04PM

    Is it legal for a car rental agency to make a copy of your credit card to keep on file? Do you have to give them a copy if they ask for it? I don’t think this is right for any company to ask for a copy of your credit card. Seems illegal to me.

  22. MCI March 21, 2012 at 11:56AM

    I think it’s mandatory to have a credit card when renting a car?

  23. Enrique March 13, 2012 at 9:49AM

    I rented a car in Alamo with my American Express, I denied rental car insurance because of American Express, so far everything is running OK. I had an accident and am just waiting to see how everything goes on, when i have any update I will post it.

    • Raghav July 8, 2012 at 2:44PM

      Hi Enrique – How did it go with American Express, am in a similar situation of renting at Avis with American Express card.

      • shantanu February 23, 2014 at 7:17PM

        Hi Raghav and Eric. please let me know if you have any updates on your case. I am in a similar situation and I would appreciate you guys’ help.

  24. Daniel L. March 4, 2012 at 3:27PM

    Thanks for the helpful tips!

    I’m actually going through a claim right now. The funny thing is that we were supposed to get charged for the car rental on the Mastercard that covers damages. However, we were never actually charged! It seems as if the car rental has in their system that we paid, however it isn’t showing up on the credit card statement. If they can’t find it, do you think my claim will get declined because I was never charged?

  25. Linda M. February 17, 2012 at 6:16AM

    Note that Mastercard Platinum will not cover the deductible on a rental car that a car dealer provided you free while your car is in the shop for warranty work. You have to actually pay for the rental car yourself in my case from Hertz.

    Who would have known this?!

    So when I was hit on the freeway by an idiot who took off I had to file claim under my personal insurance AND I am responsible for the deductible and who knows about the loss of use thing. I will always buy that extra insurance the rental car companies offer in this situation. In California and apparently only California, a hit and run is always a collision claim and whatever your deductible is on your personal car applies to the rental car.

    • tomf March 17, 2014 at 9:05PM

      the rental insurance they sell is a complete ripoff, hence them pushing it so hard.
      you can get much better insurance through amex

  26. Ron January 18, 2012 at 7:52AM

    Why is a World Master Card acceptable in Ireland for rental car insurance but not a regular Master Card?

  27. UCT January 17, 2012 at 6:37PM

    Great info, this teaches anyone not to pay in any other way than credit when it comes to car rentals! Hopefully more people see this

  28. joh rabbit January 14, 2012 at 5:11PM

    It makes sense when you don’t have a primary coverage that everybody is trying to avoid covering you when you rent a car, simply because they think you don’t have the car owner experience in caring about the car, driving safely (and driving experience in general). That’s why they have these fine prints and time frames for responses to claims.

    Sad true, but we got to try to understand the “others”. They insure you with the hopes that you know what you’re doing, and trying to minimize their liability for other drivers mistakes.

    Thanks for sharing.

  29. PO’d November 22, 2011 at 10:57AM

    I was just rejected for my claim of a $500 scratch by the Continental MC hyped in a link above. Why? The claim was late. I was out of the country for a few months, and didn’t even know the rental car agency was making a claim against me.

    Given the amount of paperwork and details required and legal clauses and qualifiers, it seems to me that the whole process is a charade and is only designed to look for ways to reject the claim.

    Has anyone actually received this benefit? Is this coverage subject to any sort of regulatory oversight?

    • TONYA March 4, 2013 at 7:26AM

      I work for an adjustment company and we process damage claims for all the rental car companies. I see these claims paid all the time. You just need to supply them the information they need and make sure to have used the credit card to purchase the entire rental. Usually they send the check directly to the card holder, and then they cash the check and never pay for the damages. Lol…I see this all the time.

  30. NY Doug November 13, 2011 at 3:18PM

    Thanks for writing this, because I think the credit card companies should do a better job explaining how their rental insurance works. I suppose ultimately I’m at fault if I don’t read the benefits but still, it would at least be nice if they made it more prominent.

  31. Phil O’Hare November 12, 2011 at 2:18AM

    Very helpful insight on how these rental programs work on credit cards. Hmm, maybe I will just buy the darn insurance from the rental company next time after seeing what might not be covered on my basic Visa Gold!

  32. Connie November 9, 2011 at 8:48AM

    Do not count on your credit card to even pay the deductible. According to American Express, all damage to rental cars falls under liability for which you have no deductible. Since they only pay the deductible, you get nothing! The whole thing is up to you and your personal insurance. Also, they can charge anything they want. If you rented a car, it is more than likely that you were not in your city of residence. Unless you want to go back to their location numerous times, you have no choice but to pay. Moral: Don’t use American Express.

    • Linda Peterson April 16, 2012 at 3:31PM

      Connie, you are exactly correct! I am going through this right now. I will have to pay for the damage to the rental car while parked in a hotel parking lot because Amex says it is a liability claim. And AMEX doesn’t pay because there is no deductible. So, since I don’t want my car insurance rate to go sky high by filing a 700.00 claim, I am stuck! I always felt insured by Amex and always made sure to use my Amex with a rental car. People need to know they aren’t REALLY protected by AMEX, their own car insurance has to pay, and you are foolish to make a claim for a small amount because you will pay much more in higher premiums for filing claims.

  33. google jim June 28, 2011 at 11:20AM

    Good to know this stuff. I always use my credit card to make sure i’m covered when renting.

  34. Al B July 22, 2010 at 11:34AM

    Take care..the American Express coverage also will not pay for loss of use unless the rental car company agrees to provide them with their usage logs to help prove “loss of use” charges. The rental car companies consider these proprietary information and may not be willing to release.

  35. Lynn K. March 21, 2010 at 6:16PM

    Thanks for going into detail about how credit card car rental insurance really works. I had no idea there were this many loopholes! Now I’ll think twice when I rent a car.

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