If you’re planning to rent a car, one of the most important decisions you’ll face is whether or not to purchase the car rental insurance coverage offered by the rental company. Rental reps are skilled at convincing you why their coverage is necessary, but buying it can be expensive, sometimes up to $30 per day. However, there’s a way you can confidently decline that coverage and potentially save hundreds of dollars – by having car rental insurance on your credit card.
In this article, we’ll dive into the world of car rental coverage and recommend some of the best credit cards that offer great car rental insurance. So let’s embark on this journey together!
What is Primary Car Rental Insurance?
Credit cards offer two levels of car rental coverage: secondary and primary. Some cards even provide both types of coverage, depending on the rental situation. Car rental insurance is also referred to as Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW) by rental and credit card companies.
Now, it’s important to note that CDW/LDW coverage isn’t actually insurance. Instead, it waives your liability for damage, theft, and other related charges in case of an incident during the rental period.
Before we dive into the best credit cards for primary auto rental insurance, let’s first understand the difference between secondary and primary coverage and how they apply.
Secondary Collision Damage Waiver Coverage
Secondary CDW coverage, also known as “excess” coverage, requires you to file a claim with any applicable insurance you may have before the secondary coverage kicks in. This is important because filing a claim with your own insurance company could potentially lead to penalties for an accident.
With secondary coverage, you may also have to pay a high deductible depending on your insurance coverage.
Primary Collision Damage Waiver Coverage
On the other hand, primary coverage does not require you to file a claim with your own insurance company. It acts as the primary coverage for any rental car incident.
To ensure coverage offered on credit cards is valid, most require you to:
- Reserve and pay for your rental car with the qualifying credit card.
- Decline the car rental company’s CDW/LDW coverage.
- List all drivers on the rental agreement.
Make sure to familiarize yourself with the requirements before renting a vehicle and don’t hesitate to reach out to the benefits administrator if you have any questions. You can even request a letter detailing your CDW coverage to show when you rent a vehicle.
To summarize, credit cards may offer CDW/LDW coverage that is either secondary or primary. Some cards offer a combination of both, with primary coverage outside your country of residence and secondary coverage within your country of residence. Alternatively, primary coverage may apply if you don’t have your own auto insurance or if your coverage doesn’t extend outside your country of residence.
The 5 Best Personal Cards for Car Rental Insurance
Now that we understand the basics of car rental insurance coverage, let’s explore the top credit cards that offer great car rental insurance. Here are our top picks:
1. Chase Sapphire Preferred® Card
The Chase Sapphire Preferred Card is our top recommendation because it offers primary auto rental insurance. This card stands out thanks to its moderate annual fee and generous reward categories. With this card, you can earn up to 5x points on all trips booked through the Chase Ultimate Rewards portal, including rental cars. Additionally, you’ll earn double points on dining, select streaming services, and online groceries, and 1x point on all other purchases.
After each account anniversary year, cardholders receive a 10% anniversary rewards bonus, which can boost your rewards up to 5.5x points per dollar. The card also offers a $50 annual hotel credit when you book through the Chase Ultimate Rewards travel portal, along with excellent travel insurance coverage.
One great feature of the Chase Sapphire Preferred Card is that you can add an authorized user at no additional charge, and they’ll receive the same primary CDW coverage when renting a vehicle with your card. Just make sure to list them as a driver on the rental agreement to ensure coverage.
If you’re looking for a flexible rewards program, Chase Ultimate Rewards points are highly valuable and versatile. You can transfer them to travel partners for great value when booking award flights and hotels. Alternatively, you can also redeem them for travel through the Chase travel portal, gift cards, statement credits, charitable donations, and online merchandise.
2. Chase Sapphire Reserve®
The Chase Sapphire Reserve Card is Chase’s premium offering. It earns Chase Ultimate Rewards points just like the Sapphire Preferred Card, but with even more generous rewards. With this card, you can earn up to 10x points on rental cars, hotels, and restaurants booked through the Chase Ultimate Rewards portal, 5x points on air travel booked through Chase Ultimate Rewards, 3x points on all other travel purchases, and 1x point on all other purchases.
Earning 10x points on car rentals is exceptional – a 20% return on investment! The Sapphire Reserve Card also comes with primary rental car insurance and car rental privileges at Avis, National, and Silvercar. Additionally, you’ll enjoy a $300 annual travel credit, complimentary Priority Pass membership, and various other travel benefits, making this card perfect for frequent travelers.
3. Capital One Venture X Rewards Credit Card
The Capital One Venture X Card is Capital One’s ultra-premium credit card. Similar to the Chase Sapphire Reserve Card, it offers up to 10x miles on car rentals and hotels booked through Capital One Travel, 10x miles on tourist reservations until May 16, 2023, and 5x miles on flights purchased through Capital One Travel. For all other purchases, you’ll earn double miles. This card also provides primary car rental insurance and complimentary Hertz President’s Circle status, one of the highest elite statuses in the car rental industry.
Capital One miles are highly valuable, with a redemption value of 1.8 cents each. You can transfer them to travel partners for award travel, or redeem them for travel purchases, statement credits, gift cards, and more.
4. The American Express Platinum® Card
The American Express Platinum Card is a favorite among luxury travelers. Although it offers secondary car rental coverage by default, you have the option to purchase primary car rental coverage for an additional fee. This card comes with a plethora of benefits, including access to premium car rental privileges and benefits with Avis, Hertz, and National, 5x points on flights booked directly with airlines or through Amex Travel, and 5x points on prepaid hotels booked through Amex Travel. It also offers complimentary hotel status with Hilton Honors Gold and Marriott Bonvoy Gold Elite.
The Amex Platinum Card offers excellent rewards and perks, such as hotel and resort benefits, access to exclusive lounges, statement credits, and exceptional travel insurance coverage. While the primary rental car insurance isn’t free, when considering all the other benefits, it’s worth considering if you frequently rent cars and take advantage of the card’s offerings.
5. American Express® Gold Card
The American Express Gold Card is exceptional for daily spending. While it provides secondary car rental coverage by default, you have the option to purchase premium car rental protection to enjoy primary coverage with this card as well. With the Gold Card, you can earn 4x points at restaurants, including takeout and delivery, and 4x points at U.S. supermarkets (up to $25,000 in purchases per calendar year). You’ll also earn 3x points on flights purchased directly with airlines or Amex Travel and 1x point on all other purchases.
The Gold Card offers up to $240 in annual statement credits, including $120 in Uber Cash for rides or Uber Eats orders and $120 in dining credits at select restaurants. It also provides access to hotel upgrades, property credits, and various travel benefits.
American Express Membership Rewards points are highly valuable, rated at 2.2 cents each. They can be redeemed for great value through travel partners or used for gift cards, cash back, statement credits, and more.
How to File a Claim for Car Rental Insurance
In the unfortunate event of an accident or damage to your rental car, you may need to file a claim with the credit card claims administrator. Here’s a quick guide on how to proceed:
- Report the claim as soon as possible by calling the number on the back of your credit card.
- Gather all the necessary documentation, such as your credit card statement, car rental agreement, statement of damages from the rental company, police reports, photos of the damage, and repair estimates.
- Be aware of the deadlines for reporting the claim, submitting the claim form, and providing all required documents.
- Keep track of your claim by following up with the credit card claims administrator to ensure all documents are received and the claim is progressing.
Remember, it’s essential to meet all the requirements and exclusions of your credit card’s car rental insurance coverage. Make sure to book and pay for the rental with the associated credit card, decline the car rental company’s CDW/LDW coverage, and list all drivers on the rental agreement.
Additionally, note that car rental insurance coverage may exclude certain countries and certain types of vehicles. Liability coverage is typically not included, so it’s important to ensure you have separate coverage for third-party property damage and medical injuries.
Car rental insurance can be a complex topic, but having a credit card with primary rental car insurance can save you money and provide peace of mind. While your personal auto insurance may offer coverage, using credit card coverage can help you avoid filing a claim with your own insurance company which may result in penalties and rate increases.
Remember to purchase car rental company liability insurance or ensure it’s included in your rental agreement, as it’s not covered by CDW insurance provided by credit cards.
By understanding the basics of car rental insurance and choosing the right credit card with excellent coverage, you can maximize your savings and stay protected during your next car rental. Happy travels!