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Do Credit Cards Cover Rental Car Insurance?

Credit card rental car insurance can help you cover costs in the event your rental car is damaged or stolen. Here’s how it works and what it covers.

By Megan Doyle | American Express Credit Intel Freelance Contributor

6 Min Read | October 28, 2020 in Cards

 

At-A-Glance

Because credit card rental car insurance is a popular credit card perk, accepting a rental car agency’s insurance coverage may be an unnecessary expense for many people.

But before you rent a car, it’s important to understand how your credit card rental insurance works and what it covers. This can help you decide whether you need to buy the coverage offered by the rental agency.

You’re standing at the rental car counter, credit card in hand, ready to pick up your ride and go. But before they hand you the keys, you might find yourself facing a question you’re not sure how to answer: Should you opt in to the offered car damage and insurance coverage for an added fee?

 

Insurance is important because you never know what might happen. For many people, though, accepting the rental car agency’s coverage isn’t worth the extra cost – especially if you already have car insurance that may extend to cover rental vehicles. But that’s not all: Your credit card might include rental car insurance, which can come in handy regardless of whether you have a primary insurance policy. 

 

What Is Credit Card Car Rental Insurance?

Many credit cards come with car rental insurance, also known as car rental loss and damage insurance. Credit card car rental insurance is a perk that provides insurance coverage for the card member – and typically passengers and other drivers authorized by the rental contract – as long as they use that credit card to pay for the rental car.

 

Credit card car rental coverage can be valuable – it saved me over $1,200 in damages after a deer ran into the rear passenger side door of a car I was renting. That’s a story for another day, but the moral is this: It’s important to know how your credit card car rental insurance works, what it covers, and how to use it so you can be sure you’re covered if an incident occurs.

 

How Does Credit Card Car Rental Insurance Work?

If your credit card offers car rental insurance, it usually kicks in automatically when you pay for your rental car with that credit card – and you’ll probably have to pay with that card to get the insurance. You’ll also have to decline the rental car agency’s offered coverage in order for the credit card’s insurance to take effect. Beyond that, exactly how your credit card car rental insurance works can depend on whether your card offers primary or secondary coverage:

 

  • Primary coverage: Pays for claims before your personal car insurance kicks in. This means you can avoid paying your deductible, and possibly prevent any premium increase due to accident or damages.
  • Secondary coverage: Won’t go into effect until your personal auto insurance first pays for the damages. Then, your credit card rental car coverage will reimburse your deductible, and possibly other costs not covered by your personal policy. It’s more common for credit cards to offer secondary coverage than primary.1

But what if you don’t own a car and therefore don’t have a personal car insurance policy? You might actually benefit from your credit card rental car coverage even more because secondary coverage usually becomes primary coverage.

 

Some Credit Cards Offer Add-On Coverage

Some credit cards with secondary coverage also offer primary coverage for a fee, potentially less than what you would pay for coverage at the rental car counter. For example, instead of paying a daily fee to the rental agency, your card issuer may charge you a premium of about $15–$25 for the duration of the rental. Note that premiums might depend on location, and there may be a cap to how many days the fee covers.

 

Also, be aware that if your card offers primary coverage as an add-on option, you might have to enroll in it in advance. That way, whenever you use that card to rent a car coverage is automatically applied and your account is automatically charged.

 

What Does Credit Card Car Rental Insurance Cover?

Credit card rental insurance typically covers damage and theft. Otherwise, coverage will depend on the credit card and card issuer. For example, some cards might offer coverage for damaged or stolen personal items, others may not. In addition, your credit card insurance might not cover loss-of-use fees – the costs a rental agency might charge you to cover lost business while the car is being repaired. 

 

Other factors that can affect your credit card rental car insurance include:

  • Type of vehicle: Exotic cars, antique cars, cargo vans, or limos might not have the same coverage as an economy car or a standard SUV.
  • Location: Depending on the card issuer, coverage might be excluded in some countries.
  • Rental duration: Coverage may only last for a certain amount of time, usually anywhere between two weeks and a month, depending on the card.

Check with your card issuer to learn exactly what is and isn’t covered by your credit card. The details are likely listed in the benefits paperwork you received in the mail with your card, but you can also check your account info online or call your card issuer.

 

How to File a Claim

If damage to the car does occur, you’ll have to file a claim. It’s a good idea to first contact your card issuer to find out what you’ll need to do. When I filed my claim, I needed to send an email to my card issuer with:

  • A copy of the damage report from the rental company.
  • Photographs taken by the rental agency.
  • The repair estimate.
  • A copy of the rental agreement.

If the damage is due to another car or person’s property, or if the car was stolen, you’ll likely need to include a copy of the police report, too.

 

Do I Need to Buy Additional Insurance When Renting a Car?

It depends. If you don’t have a personal auto insurance policy that covers rental vehicles and your credit card doesn’t offer rental car insurance, it’s probably a good idea to buy the insurance offered by the rental agency.2 Accidents can happen, and it’s always good to be prepared for whatever can come your way – whether it’s a dinged door in a parking lot or a deer fleeing a Texas rainstorm at dawn. 

 

It’s a good idea to check with your insurance company and credit card issuer to find out whether you’ll have full coverage if damage or theft occurs.

 

The Takeaway

For many people, it’s not worth buying the damage and theft coverage offered by rental car agencies – your personal auto insurance policy might cover rental cars, and the credit card you used to pay for the rental might have coverage, too. If you don’t have either – or if you expect to incur out-of-pocket costs in the event an incident occurs – paying for the coverage provided by the rental car agency may be worth the added peace of mind.

Megan Doyle

Megan Doyle is a business technology writer and researcher whose work focuses on financial services and cross-cultural diversity and inclusion.

 

All Credit Intel content is written by freelance authors and commissioned and paid for by American Express. 

The material made available for you on this website, Credit Intel, is for informational purposes only and is not intended to provide legal, tax or financial advice. If you have questions, please consult your own professional legal, tax and financial advisors.