Travel much? Depending on where you’re going or what you’re planning to do on vacation, a rental car is a must. It’ll give you easy transportation to wherever you need to go.
One of the major costs when getting a rental car is insurance. You can usually expect to be pushed to purchase the coverages provided by the rental car agency.
But, in many cases, you shouldn’t have to worry about that. Whether by having the right credit card or your own personal car insurance, there’s a good chance you’ll already be covered.
So, let’s dive into the various types of insurances offered by the rental car agencies in comparison to what you might already have.
- Types of car rental insurance
- How does credit card rental insurance work
- Does your credit card cover rental insurance
- My personal experience
- Credit cards with rental insurance
Types of car rental insurance
In the U.S., there are 4 main types of insurance coverages provided by the rental car agencies:
- collision damage waiver,
- supplementary liability insurance,
- personal accident insurance, and
- personal effects coverage.
Let’s go over each one in detail.
Collision damage waiver
The first is the collision damage waiver, also called the loss damage waiver. Basically, it covers you in the event that there’s any damage or theft on the rental car. Technically it’s not insurance, but it means that the car rental company won’t come after you if something happens to their vehicle.
Your own personal car insurance may cover you if you rent a vehicle, so make sure to check with your insurer. You’ll still have to pay your normal deductible.
Supplementary liability insurance
This insurance covers you for any damage you make to other vehicles or property. It also covers you if any injuries occur with other drivers. A typical amount of coverage is $1,000,000, although it can vary by state.
Again, if you have personal auto insurance, this may already be covered by your insurer.
Personal accident insurance
Personal accident insurance covers you (and your passengers, if any) in case of accidental death, and provides medical coverage in case of an accident. If you have personal health insurance and/or life insurance, this insurance is redundant but would provide an additional payout if there’s an accidental death.
Personal effects coverage
The last insurance is personal effects coverage. If anything is stolen from the rental car, you’ll be covered up to a set dollar amount. If you have homeowner’s or tenant’s insurance, this would also provide coverage. Typically, personal effects and personal accident coverages are combined together.
Something to note about rental car insurance
If you travel abroad, the types of coverages will change.
For instance, if you rent a car in Canada, you don’t have to worry about waiving supplementary liability insurance, since this is required by law to be provided by the car rental companies.
Also note: Your own personal rental car insurance most likely won’t cover you outside the U.S. and Canada. Always make sure to give your insurance provider a call and see if coverage is already provided, or if they can quote any additional fees for your trip.
How does credit card rental insurance work?
Where do credit cards come in?
Credit card insurance is frequently talked about as a selling point for cards, especially car rental insurance.
Your credit card will only cover the collision damage waiver, which is the most expensive insurance car rental companies provide. It can cost upwards of $30 per day, depending on the vehicle you rent.
If you don’t have any other types of insurance, you’ll want to consider getting the rest of them from the rental company.
Credit card collision damage waiver coverage
There are 2 key things you have to do in order for your credit card coverage to be valid:
- the full cost of the rental must be applied to the credit card, and
- you have to decline the collision damage waiver provided by the car rental agency.
The coverage is only valid for a set period (normally no longer than 30 days), covers a maximum amount (up to $50,000), and can’t be used for certain vehicles, such as moving trucks, cargo vans, or vans that seat more than 8. Exact coverages and vehicle limitations vary by credit card.
You also can’t violate your rental agreement – your insurance certificate and your rental car agreement will spell out what you can’t do with your rental car. The biggest thing to remember is if anyone else is planning on driving the vehicle, they must be listed on the agreement as an authorized driver.
Credit card rental car insurance is typically a secondary coverage. If your personal car insurance provides coverage, you have to go through them first with your claim. Afterward, you can go to your credit card for anything not covered by them, which would include any deductible you had to pay.
Does my credit card car rental insurance cover me internationally?
Yes, in most cases, your credit card will cover you anywhere in the world. That being said, there are country restrictions where you won’t be covered.
For instance, American Express cards won’t cover you in Australia, New Zealand, Italy, and some others.
Visa and Mastercards likewise may not offer coverage if you’re renting a car in Israel, Jamaica, Ireland, and Northern Ireland.
So, depending on your destination, make sure to check your credit card insurance certificate if there are any country restrictions.
Does your credit card cover car rental insurance?
The first place to check is the insurance certificates provided with your card. You’ll get all the coverage details you need.
An easy solution? The standalone page for all credit cards on our website will tell you. Go to the best cards page and click on your card issuer, located at the bottom of the page. In the table at the bottom of the issuer page, click on your card. Once there, click on the insurance coverage tab and see what’s listed.
Here’s an example:
If your card does have coverage, you’ll have to find your certificate for full details. If you don’t have it, call your card issuer and they can provide it for you.
My personal experience – a lesson learned
As a personal example, I was renting a car for one day in Las Vegas.
When I was asked about getting insurance, I knew my credit card didn’t provide this kind of insurance, but I was quite sure my personal car insurance would cover me.
However, the agent told me most auto insurance policies only provided coverage for up to the type of vehicle I owned. I didn’t know for sure if this was true or not, I owned a compact car (a Mazda 3) and was renting a full-size Ford Taurus.
So, because I wasn’t sure, I ended up getting the collision damage waiver for this one-day rental, even though I didn’t need it.
Use my experience as a lesson to do your research and check your documentation before you leave for your trip. It can save you money (and preventable worrying) the next time you rent a car.
Credit cards with rental insurance
The only major issuer who doesn’t offer rental insurance coverage at all is Discover.
Here are some great credit card options, and what coverage they provide:
| Card | Amount Covered | Duration covered | Learn More |
|---|---|---|---|
| American Express Hilton Honors | $50,000 | 30 days | |
| Chase Sapphire Preferred Visa Signature | Covers up to the cash value of most rented vehicles | 31 days | |
| Barclaycard Arrival Plus World Elite Mastercard | $50,000 | 31 days | |
| Citi/Aadvantage Platinum Select World Elite Mastercard | $50,000 | 31 days | |
| Wells Fargo Visa Signature | Covers up to the cash value of most rented vehicles | 31 days in the U.S., 15 days elsewhere |
To wrap things up
There’s a lot to think about when it comes to insurance.
Fortunately, your credit card is here to cover you with the most basic (and most expensive) type of car rental insurance coverage.
Car rental agencies are a business designed to sell you something and can press you on insurance coverages you might not need. As long as you know exactly what you have covered before you leave (and the amounts you’re covered for), you should be all set.
Have you ever rented a car before? What’s your best/worst rental car story?
Let us know in the comments.
