Rental Car Insurance and Credit Cards

Many major credit card companies offer credit cards that provide rental car insurance as a reward for their members. These policies can help you save tons of money when renting a vehicle, but not every card offers the same level of protection. It’s also important to understand the difference between the insurance coverage rental companies offer you at the time of renting, and how your auto insurance and credit cards protect you. Take a closer look at the many options credit card holders have while renting a vehicle.

How Rental Car Insurance Works and When to Purchase Coverage

The protection rental companies offer drivers isn’t to protect the vehicle. These companies already hold policies to protect their vehicles, but instead, the protection companies offer you at the time of renting a car is an agreement that in the event of theft or damage to the vehicle while you are renting, the company won’t look to you as the liable party.

This is important to understand because rental insurance can easily double the amount it costs you to rent a vehicle for coverage that isn’t necessary. Here are the most common forms of protection offered to drivers while renting a car:

Types of Rental Car Protection:	Description:	Average Daily Cost:
Rental Car Liability Coverage	A necessary coverage for any motorist to stay legal while driving. Liability insurance protects you with coverages that help pay for the property damage and medical bills of another party in the event of an accident.	Most rental services will offer this protection between $10-$20 per day depending on a variety of factors including the type of vehicle rented.
Collision Damage Waiver (CDW)/Loss Damage Waiver (LDW)	This protection will cover most damage or theft-related losses. It is important to note that damage from events such as speeding is not generally covered. CDW/LDW may also help protect drivers from being held responsible for loss-of-use following damage that can occur if a vehicle must take time away from generating revenue for a rental company while in a repair shop.	Drivers can expect to pay between $10, $20, and $30 per day for this waiver while renting a car.
Personal Accident Insurance	Drivers who purchase personal accident insurance receive compensation for medical bills associated with themselves and their passengers should an accident occur.	Protection is available for under $10 per day at most rental companies.
Personal Effects Coverage	Protects your personal belongings from theft while inside of your rental vehicle.	Your coverage only costs a few bucks per day.

Purchasing rental car insurance may help you protect against certain perils, however, if your home insurance and auto insurance policies already provide you with protection, you may be paying twice for coverage that is not necessary. Contact an insurance agent to best understand your policy and how it will protect you before you overpay for coverage that isn’t needed.

Everyone is different and every situation is different. Some drivers may only have liability coverage and some drivers may be homeowners. Others may have collision coverage and so on. The bottom line is that because there are so many different scenarios for drivers while renting a vehicle, you may benefit from some protections more than others. Here’s a quick guide to help you determine which rental car insurance coverages are right for you:

Rental Car Insurance Option:	When to Consider:
Rental Car Liability Coverage	If you don’t have a personal auto insurance policy, you’ll need this coverage to rent a vehicle. Drivers who carry liability coverage on their auto insurance policy should pass on this option.
Collision Damage Waiver (CDW)/Loss Damage Waiver (LDW)	Drivers with comprehensive and collision coverage do not need to purchase CDW/LDW coverage. To protect from theft or damage, however, drivers without these coverages can benefit from CDW/LDW protection.
Personal Accident Insurance	If you or your passengers are lacking medical insurance or personal injury protection (PIP), then personal accident insurance can help you stay protected. Drivers should consider the potential liability of carrying passengers that lack such coverages as it could lead to liability in the event of an accident.
Personal Effects Coverage	Your personal belongings are covered by your homeowners insurance or renters insurance policies. If you do not have either one of these protections, then personal effects coverage is a great option to protect your belongings from theft.

Primary and Secondary Insurance Explained Remember, it is always the best practice to speak with your car insurance provider before making coverage decisions to best understand your policy.

Your auto insurance policy comes first. What this means is that you will receive the protection you do for your personal vehicle while driving a rental and it will protect you in the event of a loss. Any credit card rental car insurance will also be available to protect you, but it will be secondary to your main auto insurance policy. Some credit cards may also offer primary coverage which means you would become reimbursed from your credit card before you would receive compensation from your auto insurance policy after a loss.

Not All Vehicles are Covered by Your Credit Card

There are also many different types of vehicles that are not included in your credit card’s coverage. Drivers can often save money while renting by sticking to a vehicle that is closer to what they normally drive. In other words, don’t rent a luxury vehicle and expect to pay the same rates as you would for a 4-door sedan. Many credit cards exclude such vehicles from their protection, to begin with. Each credit card is different and reading the terms and conditions of your card can help you better understand what vehicles are and are not acceptable. However, these are some of the most common vehicles renters may find have restrictions:

• Commercial vehicles
• Trucks
• Motorcycles
• Luxury vehicles
• Open-bed vehicles
• Larger vans and other types of vehicles
• Antique cars
• Off-road vehicles
• RVs

There Are Additional Exclusions When Using Your Card’s Coverage

You’ll need a business credit card to receive business car insurance while renting a vehicle for business use. Otherwise, qualifying personal rentals may apply the coverage found through personal credit cards. Contacting your credit card provider is the best way to know which vehicles are covered for business purposes when renting.

If you are traveling internationally, many stipulations may occur. Many credit cards do not allow coverage for internationally rented vehicles and in some countries, foreigners are required by law to purchase rental car insurance no matter what.

International renters are advised to always show proof of coverage, but still, even with this proof, you may need to purchase rental car insurance. Speak with your credit card provider before traveling and renting abroad to explain your intentions.

Medical expenses are also usually not found as a coverage option from your credit card provider. Neither are car-sharing services or commercial-type vehicles such as moving vans.

Last but certainly not least, if you are using coverage from your credit card while renting a car, you’ll need to check your card’s terms regarding the length of time you will be protected.

Each company is different and cards may also vary. Whether it is domestic or international, if you are renting a vehicle, it is important to discuss the terms of your coverage with your credit card provider beforehand to avoid lapses in coverage.

FAQs About Rental Car Insurance and Credit Cards

Rental car insurance and credit cards maintain a unique relationship with each other. Because of this, there are bound to be questions you might have about how you are covered and which credit cards offer such rewards.

The best resource for such questions will always be your credit card provider and your car insurance agent, and we here at Freedom Insurance Group are here to help.

Feel free to contact us for questions about your coverages and continue reading some of the more frequent questions we incur on the subject below.

Which Credit Cards Cover Rental Car Insurance?

There are a lot of credit cards out there, but here are some of the best credit cards offering rental car insurance on the market:

• American Express® Gold Card
• The Platinum Card® from American Express
• Capital One Spark Cash for Business*
• Capital One Spark Miles for Business*
• Chase Sapphire Reserve®
• Chase Sapphire Preferred® Card
• Ink Business Preferred® Credit Card
• United Club℠ Infinite Card
• United℠ Explorer Card

*It is important to note that for cardholders to use either the Capital One Spark Cash for Business card or the Capital One Spark Miles for Business card for rental car insurance, you must also be approved for the Visa Signature card, and terms and conditions will apply.

MasterCard® cardholders can also enjoy rental car insurance benefits, but many different conditions apply and not all cards are the same. For an overview, check out this guide to benefits from MasterCard® and contact their representatives for a clearer picture.

For an even more in-depth look at specific credit cards that may benefit you while renting a vehicle, check out The Points Guy where you can compare card specs and apply for cards.

Does My Credit Card Cover Rental Car Insurance?

The best way to know if your card provides rental car insurance is to speak with your credit card provider and review your card’s terms and conditions. You can also look above at some of the most popular and best credit card options that provide such protections. Citi and Discover cardholders, however, do not possess rental car insurance rewards.

Many banks issue credit cards through major credit card networks which also offer rental car insurance as a reward. Some of the most popular examples include:

• Bank of America.
• Capital One.
• Chase.
• Wells Fargo.

Is Rental Car Insurance Necessary?

It depends. For many drivers, rental car insurance may simply be a duplicate form of coverage depending on the details of their independent policy. Drivers in most states are required to carry liability insurance to stay compliant with the law.

If you do not have liability coverage and you are renting a vehicle, you’ll need to purchase this coverage from the rental company. Other forms of coverage that you possess for your personal vehicle can also extend to your rental vehicle.

However, if you wish to hold such protections while renting but not your personal vehicle, your rental company or credit card may protect you depending on their terms and conditions.

International rentals may hold other exceptions, and reviewing your policies and rental terms can help you determine your best course of action.

Does Auto Insurance Cover Rental Cars?

Yes, your liability, comprehensive, and collision coverages for your personal vehicle will also protect your rental car if it is for personal use.