Renting a car often comes with the pressure to purchase additional insurance at the counter. However, many credit cards offer rental car coverage that could save you money (if you know how it works). Before declining the rental company’s insurance, it’s essential to understand what your credit card actually covers.
Most major credit card networks like Visa, American Express, and Mastercard offer some level of rental car insurance, but the details depend on the bank that issued your card and the type of card you have. Premium travel rewards cards often include Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW) coverage, which can replace the expensive protection sold by rental companies. According to CNBC, many travel reward cards come with special car rental insurance that allows you to skip the rental company’s coverage altogether.
Primary vs. secondary coverage
Not all credit card coverage works the same way. Most cards provide secondary coverage, meaning your personal auto insurance pays first, and the card reimburses certain costs, such as your deductible. This can be valuable, as deductibles can be as high as $1,000. As NerdWallet explains, “The coverage that most credit cards offer, typically for damage to or theft of the rental car, kicks in after your personal auto insurance pays. But that so-called secondary coverage can be valuable.”
Some premium credit cards offer primary coverage, meaning the card pays first, allowing you to bypass your personal auto insurance entirely. This is beneficial because it prevents claims from affecting your personal policy and keeps your insurance rates from increasing.
How to check your coverage
To find out what your credit card covers, check the “Guide to Benefits” provided by your card issuer or call the company directly. Coverage details vary, and it’s important to confirm whether your card provides primary or secondary protection. Also, look into any restrictions since some cards exclude certain types of vehicles, like luxury or exotic cars, and may limit the length of rental coverage.
To ensure your credit card insurance applies, you must pay for the rental with the card that provides coverage and be listed as the primary renter and driver. Failing to do so could void the benefit.
What’s covered, and what’s not
Credit card rental car coverage typically applies to collision and theft, covering the cost of repairs or replacement of the rental vehicle. Many cards also cover towing expenses and administrative fees. However, credit card coverage usually does not include liability insurance, meaning it won’t cover damage to other vehicles, injury to others, medical expenses, or personal property loss. Many drivers have separate policies for these types of protection, but it’s worth double-checking your overall coverage before renting.
Using your credit card’s rental car insurance can be a great way to save money, but only if you understand its limits. Before declining the rental company’s insurance, take the time to review your card’s benefits and make sure you’re fully protected.
Have you been injured in a car accident?
If you’ve been injured in a car accident, you need an experienced attorney who understands how to navigate insurance policies. The North Shore Injury Lawyer has over 30 years of experience helping accident victims on Long Island secure the compensation they deserve. Call 631-495-9435 today for a free consultation and let Mark and his team fight to get you the maximum recovery possible. Stay safe out there!