Before you go on your next big cross-country vacation, check with your credit card issuer about rental car protection. If you have an American Express, Visa, or Mastercard credit card, chances are that you may be able to score free collision insurance, by turning down the one offered by a rental company. As with anything that is free, there is a lot of small print to deal with. Luckily, we read through all of it, so you don't have to. This guide will tell you everything there is to know about credit card rental car insurance, what it means for you, and whether it is good enough for your next trip.
To qualify for auto rental insurance through your credit card, you have to satisfy a few conditions. First, you must charge the entire cost of the rental onto the credit card. Make sure you keep all receipts - in the event of an accident, you may be required to submit proof to your network that you did in fact rent the vehicle with a credit card. The primary credit card accountholders name must match the name on the auto rental contract.
Secondly, you must decline the rental company's LDW (loss damage waiver - more below) in order for your credit card company to agree to cover you. Some networks will allow you to buy supplemental liability coverage, but any collision insurance must be declined. If the rental car company insists you buy their insurance, contact your credit card issuer to discuss what can be done.
Details as to what is and isn't covered, and what the different requirements for coverage are get more and more specific as you go. Below we outline some general facts about the largest credit card issuers and the rental car insurance they provide. These can differ on a per-car basis, so it is in your best interest to call ahead and ask before you embark on your travels.
|Cards||All||All||Gold, Platinum, World and World Elite Cards|
|Coverage Period||15/31 days||30 days||15 days|
|Must Submit Claim Documents Within||90 days||180 days||180 days|
|Claims Contact||(800) 847-2911||
(800) 338-1670 (domestic)
(216) 617-2500 (worldwide)
|Policy Details||More Info||More Info||More Info|
*Visa reserves the right to deny claims that contains charges which could have been avoided had you immediately contacted the benefits administrator. There is also no coverage available for cars rented in Israel, Jamaica, Republic of Ireland, and Northern Ireland.
**Amex Platinum cards and Delta Reserve offer better protections, including the $75,000 limit, and personal property protections, and up to $5,000 in medical expense coverage. No coverage in Australia, Italy, New Zealand, Ireland, Israel, and Jamaica.
***Mastercard does not insure any cars rented in Australia, Italy, New Zealand, Ireland, Israel, and Jamaica.
Damage the rental car suffers in a collision is generally covered by all networks – the limits on how much they are willing to cover will differ however. Typically, users can expect coverage to range between $25,000 and $50,000. This protection will not cover any damage you do to others' cars (this is also not covered under a rental company's LDW).
If the vehicle is stolen, your credit card network will also pay the car’s value back to the rental company for you – up to the maximum allowable payout. Note that this type of coverage is not extended to theft of items inside of the car. Therefore, if a thief breaks your car window and steals a DVD player, you would be reimbursed for the cost to repair that window, but not the stolen goods.
Most credit card networks, with the exception of Discover, reimburse the cardholder for what are deemed “reasonable charges”. These include things such as towing, and “loss of use” charges, which are typically imposed by the rental agency. Note that "loss of use" charges may be difficult to get compensation for - it requires you to provide your credit card company with documents that the auto rental company can technically withhold from you.
Liability and personal effects are not protected by credit card auto rental insurance. While it may seem like a collision is all you have to worry about when it comes to an automobile accident, liability is very important too. If another party files a lawsuit against you as a result of the accident, or you need to cover the expenses of others in your vehicle, having no liability coverage can end up costing you dearly. Some auto rental agencies will provide you with basic liability coverage when you rent a car, enough to get you by the state minimum requirements. You may also purchase supplemental liability coverage, at an additional cost. Doing so will not, typically, disqualify you from your credit card auto rental insurance protection. Still, it is always best to verify with your company over the phone to see if this applies to the credit card you’re holding.
Additionally, certain types of vehicles will not be covered by most credit card companies - these lists will differ between the different networks. Generally, the following types of rented vehicles will not be covered:
- Expensive cars – ones whose suggested retail market price is above $50,000
- Antiques – any car that is over 20 years old, or has not been manufactured in over 10 years
- Vans/trucks – vehicles capable of transporting more than 8 passengers (including limousines and RVs)
- Motorcycles/mopeds – if the vehicle you are renting has less than 4 wheels, your credit card company will not extend insurance to it
In addition to the above, some companies will refuse to insure SUVs and full-sized sports utility vehicles. As with all the benefits listed here, it is best to contact your card provider to double check whether a vehicle you are planning on renting is covered.
Where you rent a car may also disqualify you from being covered. For example, your credit card will typically not cover you whenever you rent a vehicle in Israel or Australia.
As with all insurance policies, the details of what is and isn't covered, these are not simple, and are subject to changes. You should not rely on a quick summary to make your full decision. Call your card company before your trip to find out the exact details of your auto rental policy.
American Express Premium Car Rental Protection
American Express offers extended rental car insurance at a fee - $19.95/$24.95 per rental period. This price will cover you for the entire rental period. If you’re taking out a car for one day, the insurance offered by the rental company will generally cost you less money. When it comes to extended rentals (2-3 days or more) the American Express Premium Car Rental Protection starts to pay off.
Amex Premium Car Rental Insurance is different from all the other credit cards, due to the fact that is covers more and acts as the primary insurance (more on that in the section below). With Amex Premium you can be covered for up to $100,000 for damage or theft of the rented vehicle, $100,000 in the event of an accidental death or dismemberment, up to $15,000 for secondary medical expenses per person, and up to $5,000 for secondary personal property damage. This premium insurance will not cover damages you do to other parties in the event of an accident, nor will it cover any legal expenses that result from it (no liability coverage).
Unless you want to avoid filing a claim with your auto insurance company, this coverage is a hard sell to individuals who already have personal coverage. Liability coverage, which is not part of this policy, is often the thing individuals worry about the most, given the costs involved in the event of a lawsuit. If you will be transporting a valuable item (worth up to $5,000) in your rental vehicle, and worry about it being stolen, then the secondary property coverage may be worthwhile – though we envision this being specific to only a few individuals.
Note that California and Washington State cardholders are subject to slightly different coverage amounts/lengths. For a full list of up to date details on this plan, visit Amex’s website.
The major difference between insurance coverage from your credit card versus the rental company is their priority. The policy from your credit card is secondary, while the one provided by the rental company is primary. After an accident, you must submit an insurance claim to your primary provider first, and may only submit amounts not covered by the primary insurer to your secondary. If you have a personal auto insurance policy, this can make a huge difference. If you get into an accident with your rental car and must submit a claim on your personal policy for auto insurance, your premiums will undoubtedly go up as a result. However, if you first go through the auto rental company’s insurance, all you have to do is report the accident to your personal insurer. Therefore, for individuals with a personal policy, the difference between primary and secondary insurance can have long-term consequences.
In general, rental car insurance comes in 4 flavors: loss damage waivers, supplemental liability coverage, personal accident insurance, and personal effect coverage. These vary in price and scope of what they will cover. Loss damage waivers are the basic protection given to the car itself – it works similarly to the protection you get through a credit card. The difference is that with an LDW you know the vehicle you are driving is covered and protected. With a credit card, you may find out after filing a claim that the type of car is not protected because it fits an exception or for one of many possible reasons. Your credit card company will not cover any damages if you elect to buy an LDW from the rental company.
The other items listed above – from liability coverage to personal effect coverage – deal with insuring the driver and the contents of the car. Liability coverage protects you against lawsuits, and gives coverage to passengers/other drivers. For example, if you crash into another driver, causing him damages, and he proceeds to sue you, liability coverage would cover your legal expenses. It is possible to purchase all these protections from a rental agency without an LDW – which means these can work alongside the insurance from your credit card.
Should I Turn Down the Rental Company's Insurance and Rely On My Credit Card's?
If you are diligent and aware about all the facts needed to qualify for rental insurance through your credit card, and you feel comfortable with what it does and does not cover, you should feel fine relying on it.
Whether or not you should get supplemental auto rental insurance comes down to managing risk. If you believe there is a significant risk of you sustaining damages that would not be covered by your credit card company, it may be worthwhile paying the extra money to extend your coverage. As with most financial decisions, this one comes down to individual scenarios. For example, remember that your credit card will not provide you with insurance for items inside the car. If you are transporting something precious, and it gets stolen, you will be out of luck and money.
In the event of an accident, it is important to have liability coverage – something your credit card does not provide. If, down the line, somebody decides to sue you as a result of the incident (regardless of fault) courtroom fees may prove expensive. Buying additional liability coverage may be a worthwhile investment as a result – if you do not have a personal auto policy already.
For a more in-depth look at car rental insurance, read our guide here.
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