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When you’re planning car travel, the last thing you want to think about is dealing with accidents and car insurance. Deciding whether or not to buy rental car insurance can easily replace excitement about your vacation with worries about fender-benders and insurance claims.
With credit cards that provide primary rental insurance, you don't have to worry about how to cover your rental. You can skip purchasing an expensive policy at the rental car counter. Moreover, in the event of an accident, primary rental insurance often provides coverage up to the full replacement cost of your rental vehicle, and saves you from the headache of filing a claim with your auto insurer.
How does credit card rental car insurance work?
Credit cards with rental car insurance offer a Collision Damage Waiver (CDW) (or Loss Damage Waiver (LDW)) for qualifying rental cars that you pay for with that credit card. Depending on the terms, the policy may cover the full cost of the car in case it is damaged or stolen.
Without rental car insurance, you could potentially be responsible for covering the full cost of a damaged or totaled rental car. There are lots of options for reducing your liability: For example, you may have some degree of coverage through your car insurance policy or your homeowner’s insurance. But for full coverage, you typically need to purchase a CDW from the rental company, which can be pricey.
You can save yourself a lot of money by booking and paying for your rental car with your credit card and declining the policy from the rental car company.
Primary vs. secondary car rental insurance
Credit card rental insurance coverage can generally be split into two categories, primary and secondary. There’s a big difference between the two, so it’s important to understand which one you’re getting from your credit card company.
Having primary rental car insurance means you don’t need to use your personal insurance, or the rental company’s insurance, to get full coverage for your rental. Credit cards with primary rental car insurance provide you with coverage for collision damage or theft, and prevent you from having to file a claim with your auto insurance, which could cause a permanent rate increase. (Note that primary coverage doesn't always cover injuries to passengers, damaged property or stolen personal items.)
While primary coverage is ideal, most credit cards offer secondary coverage. Secondary, or supplemental coverage, kicks in after you’ve used the coverage you already have in place. In other words, you’ll have to first file a claim with your other providers, and then file a separate claim with the credit card company. Suffice it to say — you're better off using a credit card with primary rental car insurance, if you have one in your wallet.
Chase credit cards with primary rental car insurance
If you’re searching for a credit card with rental car insurance, Chase credit cards are your best bet. Most Chase business credit cards and Chase cards with an annual fee offer primary rental car insurance — both in the U.S. and abroad. This coverage includes theft or collision damage and some qualified towing expenses. There are also a few no-annual-fee personal Chase credit cards (like the Chase Freedom Flex℠) that offer primary rental car insurance while traveling outside the U.S., though their coverage is secondary for U.S. rentals.
To use Chase rental car insurance, you’ll need to book and rent your car using your Chase credit card. Then, be sure to decline the rental company’s collision damage waiver and loss damage waiver.
Rental coverage is complimentary with each the following Chase credit cards (as well as many others):
American Express Premium Car Rental Protection
You can get primary coverage through American Express, but you’ll have to pay a fee. A charge of $12.25 to $24.95 (depending on your state of residence) gives you primary coverage for a rental period of up to 42 days. American Express cards also generally come with complimentary secondary car rental insurance — if you don’t pay the fee for primary rental coverage, your card will automatically default to secondary coverage.
To use primary rental coverage, you’ll need to reserve and pay for the rental car with your American Express card. Then be sure to decline all of the following coverages from the rental company:
- Full collision damage waiver (CDW)
- Personal accident insurance
- Personal property coverage
- Any coverage similar to the above items
You’ll get up to $75,000 in damage and theft coverage when you pay for rental protection, plus coverage for accidental death and dismemberment, and you’ll be covered worldwide, except in Australia, Ireland, Israel, Italy, Jamaica and New Zealand.
Here are some popular American Express cards with optional primary rental car insurance:
Capital One credit cards
Capital One provides a Rental Collision Damage Waiver on all eligible vehicles (see the benefits guide for eligibility details) as a benefit of having a Capital One credit card. Just be sure to reserve and pay for your rental car with your credit card, and decline the rental company’s CDW. Unfortunately, coverage on Capital One cards is secondary for cars rented within the U.S. However, outside the U.S., Capital One rental car coverage is primary.
The Rental Collision Damage Waiver provides reimbursement for collision damage and theft, up to the full value of the vehicle, as well as some towing expenses. Coverage is available worldwide except Israel, Jamaica, the Republic of Ireland and Northern Ireland.
The following popular Capital One credit cards offer primary rental car insurance outside the U.S. (as well as other Capital One credit cards):
Which credit card is best for car rental insurance?
The cost and coverage you get from each of these three credit card companies varies, so deciding which card is best for you is ultimately a matter of where and how often you plan to use rental cars. You should also consider annual cost and other travel perks before choosing a credit card for renting cars.
Chase cards are generally the best option for car rentals, since most offer primary rental car insurance.
If you take lots of quick trips, you might want to choose a card like the Chase Sapphire Preferred® Card over an American Express option. With Amex, you’ll have to pay a fee for primary coverage every time you rent, regardless of whether you’re making a day trip or leaving town for a month.
However, there are a few benefits to Amex's primary rental car insurance: For a modest daily fee, you'll get a longer-than-average rental period (42 days) and much higher coverage (up to $100,000) — plus the CDW covers vehicle types that other cards’ policies don't often cover, such as luxury vehicles and pickup trucks.
Capital One in general isn't the best option for rental cars, since their coverage is secondary in the U.S. If you're travelling internationally, however, Capital One cards will give you primary coverage in most countries.
Other things to know about primary rental car insurance
- You should pay for the rental with your credit card and decline the rental car agency’s CDW to activate your card’s policy. You may have to book the rental with your card as well.
- Your card’s CDW only covers theft and damage to your rental car — it will not cover damages to property or another car, or injuries to yourself or another person.
- Certain countries as well as certain vehicle types may be excluded from your card’s rental car coverage — check your card’s terms and conditions closely for exclusions.
- In case of an accident, be sure to hold onto all documentation — including the accident report and a copy of your rental agreement — and report the incident to your benefit administrator as soon as possible. There may be a time limit on the policy.
While these are some common limitations, your card’s benefits guide will contain a detailed list of limitations. You should familiarize yourself with your benefits guide before you rent a car.
The information related to Capital One Spark Cash for Business, American Express® Green Card, and Capital One® Spark® Classic for Business has been independently collected by ValuePenguin and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply to American Express credit card offers. See americanexpress.com for more information.
The Capital One Spark Cash for Business card may no longer be available.