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Rental Car Insurance: Which Credit Cards Have You Covered

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Rental Car Insurance: Which Credit Cards Have You Covered

Do you really need rental car insurance? Many rental agencies offer damage waivers for about $15-$25 a day, selling peace of mind along with expanded coverage. But these waivers are often no better than the coverage you already have with your favorite credit card. Not only does your primary insurance company often step in, but every state has a minimum insurance requirement.

Depending on where you rent, the rental company’s liability for injury or property damage may be anywhere from $25,000 to $50,000. This could still leave a big bill for you to foot, but your credit card will also step in — sort of. All four major card networks offer rental insurance, but vary substantially in benefits and requirements.

Thinking about relying on your credit card for rental car coverage? Read this first

Before we review the rental car insurance benefits offered by each network, there are a few important things to keep in mind:

  • Generally, your credit card offers secondary rental insurance. This means that it will only pay for the cost of certain damages not covered by your regular car insurance policy.
  • As the cardholder, you must book the rental car with your credit card under your name in order to receive coverage. Simply carrying a card that offers rental car insurance isn’t sufficient.
  • Typically, you must refuse the coverage offered by the rental car agency in order to receive rental car insurance benefits from your credit card. We’ll discuss exceptions to this general rule below.
  • This article applies to consumer credit cards. While many business credit cards offer rental car insurance, coverage levels could be substantially different from the benefits described below.
  • Cards in the same network may have varying levels of coverage. Some issuers don’t offer rental car insurance at all, while others set terms different from the network standard. Call your bank or check your card’s benefits statement to learn more about your specific card’s benefits.
Nerd note: Much of the information discussed in this article is a compilation of resources available online. However, some of it was obtained through phone calls to customer service hotlines. This is just one more reason why it’s important to get in touch with your card’s issuer to verify its rental car coverage policy before you set off on your trip. Here are some important terms to know before you call:
  • Loss of use: The cost of renting another car while the original is out of commission.
  • Fully utilized: A card network may cover loss of use only if the auto rental company’s fleet is “fully utilized,” generally meaning that 80% of the cars are in use.
  • Diminished value: The amount that the rental car’s resale value goes down. This cost is usually relatively small, unless you manage to significantly damage the car without totaling it.
  • Antique cars: All of the networks exclude coverage of antique cars, usually defined as a car made at least 20 years ago or one that has been out of production for 10 years.
  • Vans: As a general rule, personal-use vans that seat eight people or fewer are covered. However, some waivers specifically exclude SUVs, and almost all exclude cargo vans.

Benefits by network: An overview

Visa, MasterCard, American Express and Discover all provide rental car insurance above and beyond what your primary insurer and rental company will offer. Here’s a quick overview of each network’s benefits and limitations:

Visa: Visa is often touted for its excellent rental car insurance benefits, mostly because it’s widely available for cardholders. Unlike many other networks, it offers rental car insurance on all of its cards — standard, Signature, rewards, the works. However, it limits its rental car period to only 15 days domestically.

MasterCard: Its benefits are similar to Visa’s. However, rental car insurance is not offered on all cards — according to customer service, it’s only available on Platinum, Gold, World and World Elite cards.

American Express: AmEx is the only network to offer premium coverage for a small fee. It offers free secondary coverage up to $50,000 ($75,000 on the The Platinum Card® from American Express and Delta Reserve Credit Card cards), but will offer primary coverage with a higher limit and protection against injury and property damage if you opt for it.

Discover: Discover’s coverage is limited to a handful of cards. Unlike the other three networks, Discover doesn’t cover loss of use fees, only collision damage up to a $25,000.

Drilling down: A network-by-network comparison

Visa and MasterCard

Both Visa and MasterCard emphasize that their terms vary by issuing bank. Again, check with your particular card’s issuer before heading out on vacation.

Benefit Visa MasterCard
Offered on All cards Gold, Platinum, World and World Elite
Rental Period 15 consecutive days domestic/31 abroad 15-31 consecutive days, depending on the card
Must decline rental insurance? Yes Yes
Vehicle Value Not specified <$50,000
Includes Physical damage, theft, loss of use* Physical damage, theft, loss of use
Excludes Injury, property damage, taxes, damage to other vehicles, diminished value, tire wear and tear
Primary or Secondary? Secondary Secondary
Drivers Covered All authorized drivers
Vehicles excluded Expensive, exotic or antique cars, trucks, pickups, RV’s, motorcycles, ATV’s, limousines and certain vans
Excluded Countries Ireland, Northern Ireland, Israel, Jamaica Maybe Italy, New Zealand, Australia, Ireland, Germany, Costa Rica, Israel, Jamaica, Mexico
Exclude SUVs/vans with more than 8 seats 9 seats
Max coverage Not specified $50,000
Max loss of use* Not specified $500
Report/file claim within 45 days 30 days
Source Visa Call to customer service

*In order to be compensated for loss of use, the rental company must prove that the fleet is “fully utilized.” Most rental agencies won’t bother, so your chances of getting this benefit aren’t very high.

American Express

American Express has various exemptions for students, Californians and Floridians, see below for the details.

Benefit AmEx Basic Amex Platinum AmEx Premium
Offered on All cards The Platinum Card® from American Express All cardholders can purchase
Rental Period 30 days, consecutively or in a 45-day period in the same 75-mile location 30 days, consecutively or in a 45-day period in the same 75-mile location 42 days (30 in Washington State)
Must decline rental insurance? Decline full, can accept partial
Vehicle Value <$50,000 <$75,000 Not specified
Includes Physical damage, theft Also covers property damage and injury Also covers property damage and injury
Excludes Diminished value, taxes, wear and tear
Primary or Secondary? Secondary Secondary Primary
Drivers Covered All authorized drivers
Vehicles excluded Expensive, exotic or antique cars, many trucks, RV’s, motorcycles
Excluded Countries Ireland, Israel, Jamaica, Australia, Italy, New Zealand
Exclude SUVs/vans with more than 8 seats N/A
Max car coverage $50,000 $75,000 $24.95 plan: $100,000
Max medical expenses per person N/A $5,000 $24.95 plan: $15,000
Accidental death and dismemberment: $100,000
Max property damage N/A $1,000/person, max $2,000 $5,000/person, $10,000 max
Max loss of use Proprietary information
Report/file claim within As soon as reasonably possible/60 days
Source AmEx AmEx AmEx

American Express Exemptions

Students: Cardholders who are enrolled in a four-year college or graduate program in the United States, and are receiving student benefits provided by card membership, are ineligible.

California: Additional coverage costs $17.95, maximum coverage extended to:

  • $100,000 car damage
  • $250,000 accidental death and dismemberment
  • $15,000/person medical expenses
  • $5,000/person property damage, maximum $10,000 overall

Florida: Property damage is capped at $15,000 per person, $25,000 overall.

Discover

Benefit Discover Discover Escape
Offered on Discover® Motiva Card, Discover® Open Road Card, Discover® More® Card Escape by Discover® Card
Rental Period 31 days, 45 for employees using business credit card 31 days
Must decline rental insurance? Yes Yes
Vehicle Value <$50,000 <$50,000
Includes Collision or upset only Physical damage, theft and towing
Excludes Theft, any damage not due to a collision, loss of use Diminished value, taxes, wear and tear
Primary or secondary? Secondary Primary (under certain conditions)
Drivers Covered All authorized drivers
Vehicles excluded Expensive, exotic or antique cars, trucks, pickups, RV’s, motorcycles
Excluded Countries Valid in any country that accepts Discover Ireland, Israel, Jamaica, Australia, Italy, New Zealand
Exclude SUVs with more than Doesn’t specify seat exclusions, but doesn’t cover all vehicles 9 seats
Max coverage $25,000 $50,000
Max loss of use N/A N/A
Report/file claim within File claim in 90 days 30 days
Source Discover Discover

A card that offers primary car rental insurance

Chase United Airlines Mileage Plus Credit Card
Apply Now

on Chase's
secure website

The United MileagePlus® Explorer Card is one of the only cards on the market that provides primary rental car insurance at no additional cost. If you’re a loyal United flyer and often rent cars, this card might be the right choice for you. It offers 2 miles on every dollar spent on United flights and 1 point on all other purchases, plus a killer signup bonus: Start with 30,000 bonus miles after you spend $1,000 on purchases in the first 3 months.

The United MileagePlus® Explorer Card has a $0 intro annual fee for the first year, then $95 after that, and no foreign transaction fees. You’ll also get your first checked bag fee waived with cardmembership.


Image via iStock.

  • avenez

    As someone in the rental industry I see a few issues in this article. To say the waivers are often no better than card coverage is completely wrong at worst, and inaccurate at best. It would be better to say while the (full) waiver (which is not insurance but an agreement wherein the company waives their right to charge you for damage) is usually the most complete option, your card coverage may be sufficient. There are never any vehicle exclusions or maximum amounts to the (full) waiver, even exotic cars are covered. In terms of secondary coverage, usually this means your personal auto insurance will pay the claim, and the secondary card coverage provided by your credit card will pay (reimburse) your deductible. (Note that in some states a rental car is considered third party property and as such your vehicle liability insurance will cover damages to rental cars.) Alex commented that liability coverage is implicit in renting a vehicle and is 100% wrong. Hertz is no more liable for an accident you cause than your landlord is for a fire you start that burns your neighbors house down. Read the rental agreements from any of the top companies and you will find several statements to the effect that by declining any liability coverage they provide you are assuming full liability. So the other thing to bear in mind when using card coverage is to ensure you are capable of satisfying the liability requirements of the state of rental via your own auto insurance policy or another method, or alternately accept liability coverage from the rental company. Uninsured renters be aware, while unlikely, if pulled over in a rental vehicle the officer can ticket you for driving without insurance if you have no liability coverage of your own and have declined the rental companies liability coverage. Again, the article here is inaccurate as enterprise rent-a-car’s supplemental liability coverage covers up to $1,000,000, as does hertz liability insurance supplement. I believe most other major companies have similar outrageously high coverage amounts, and would be shocked to find any liability plan offered that covers less than $100k. You could pretty much drive (accidently, of course) into every single vehicle in the first row on a lot of a dealership and not exceed that amount.
    I’m not sure on Mary’s question above. I suspect they would likely not cover it, but could be wrong. Some cards (such as Amex) offer am optional benefit in which you can enroll where a flat fee is charged per rental transaction to provide coverage, so that you could simply pay that one flat fee each month when your contract is closed and reopened. However I am unsure if there are any terms that would prevent that in the program. Another tip would be to clarify many cards only pay loss of use when fleet utilization logs are provided by the rental company, and virtually no rental company ever discloses these as at times there is no way to do so without releasing some amount of personal information of other customers and so the card company can leave you holding the bag for that amount.

  • Elliot J. Stamler

    Depending on state law, car rental companies may be required to provide MINIMUM liability coverage similar to the minimum statutorily required of all car owners. If so you are taking a substantial risk if you do not purchase supplemental liability from the renter UNLESS your own auto insurance policy will cover liability for rental cars. If it doesn’t or if you do not own a car and thus have no auto insurance policy, as is the case for many here in NYC where I live, you are risking a great deal by not getting the supplemental liability coverage..if you have a bad accident or God forbid, injure third parties, the statutory minimum that presumably you have from the renter, will not even begin to cover your potential financial liability-once the tort lawyers get ahold of you and sue you. This is especially true if you are worth something with reasonably substantial assets.

  • Kevin M.

    Why are you people so STUPID to think that some credit card will magically back you up or that your insurance company will come to your rescue???? Those companies are in it to make a lot of money and aren’t about to give it away. They will look for any possible loophole to get out of paying, not to mention the amount of out of pocket expenses you will have to pay before your insurance company kicks in, plus the loss of use fees and the hassles and paperwork that you will also have to go through for months. You people are so blind thinking that some other company is going to “save” you when you damage a rental car. I am an insurance agent and because of potential out of pocket expenses reaching into the thousands of dollars, I owe it to my customers to explain just what they are getting into and how the damage waiver purchased only through the rental car agency can protect them. Any insurance agent who tells you don’t take it or you don’t need it, is a horrible insurance agent and does not have your best interest in mind. Find a new one!!! The damage waiver from the rental companies is a complete walk away. If anything happens to that car while you are renting it (as long as you don’t do anything to void the contract like have an unauthorized driver or take the car off road) you are not liable for anything.
    Even you people traveling for work thinking that your company will come to your rescue. So many of my customers have thought that very thing but the company denied them for simple things like an accident happening after normal work hours.
    WAKE UP PEOPLE!!!! Do yourself a favor, protect yourself the easiest way possible, take the damage waiver and you wont have to worry about a single thing while you have a rental!

    • m1nd7r1p

      Really? I’m stupid? With AmEx. I always decline the CDW, save money, and have been covered by AmEx when needed. Once, while at a ski area in Tahoe, our rental SUV had a broker rear window while we were out skiing–no idea what happened, if it was an accident someone would have had to hit it pretty hard with a ski/snowboard to break it, but break it they did. There was nothing in the car to steal anyway. AmEx covered the claim in its entirety, the rental car company had a driver bring down another SUV and swap them out, no headaches at all for us. Declining the CDW has saved me money and I’ve been fully covered every time its been an issue. I would say I’m quite awake, thank you very much–I still don’t “worry about a single thing while [I] have a rental!” I’m guessing you work for a rental company.

      • Kevin M.

        Well m1nd7r1p, I will go over this again since you are obviously very slow and cannot read. As I stated early I am in fact an Insurance agent, not a rental car agent. I work very closely with rental car companies as well as credit card companies. I have spent hundreds of hours getting the facts straight as a service to my clients. Based on your experience you were lucky, but total that SUV and you will see them turn and run. There is a huge difference between a $500 window and a $50k SUV. AmEx makes you pay for their premium rental insurance too, not to mention the higher regular fees that AmEx makes you pay. AmEx insurance is again insurance. All insurance has loopholes and exceptions. Things that are designed to limit the amount the insurance company has to pay out. Why don’t you take a look at ALL the fine print? Thinking your AmEx will magically save you if your rental car is damaged is like saying your HMO will my make you feel better no matter what’s wrong with you. Why put yourself at risk of potentially paying thousands of dollars of out of pocket expenses for a vehicle you will never see again???
        I had a colleague who was very arrogant thinking his AmEx was going to cover his rental car and all he had on his car was liability. So when he drove up a mountain road a little too fast and his car slid off the road and was totaled, his AmEx denied his claim and he ended up making monthly payments on a $25k convertible that he rented.
        I am very glad you sleep well at night, most people who don’t have a clue do sleep well. Find a large dent in your rental car next time and I guarantee you will not be sleeping so well. Do a little research next time you blast a seasoned professional and make yourself look like a fool who should be riding the short bus!!

  • hawkslionsfam

    The Premium and primary AmEx coverage worked for us. We signed up for the AmEx premium rental insurance a few years back which charges about $25 per rental on our Delta AmEx card and it REALLY came in handy. Over Thanksgiving a few years years back our rented crossover SUV was hit in the parking lot of a grocery store. We didn’t see it happen. We called the company that handles the AmEx car rentals, they took our information, and told us that they would cover everything and be the primary insurance. This being our first rental car accident, we went ahead and called State Farm – our insurance company. (As a sidenote, and this may seem like overkill, but with State Farm, we also had on the extra insurance rental car coverage rider, which is about $5 extra dollars a month. We’d call and take it off after we finished up our rentals. I believe this covers any cost the rental companies might charge related to not being able to use the car while it was being repaired if an accident were to occur). So we talked to State Farm about the accident, explained what happened, told them about our AmEx coverage which was supposed to be primary and the State Farm representative said they would contact AmEx and the rental car company to confirm. Later on State Farm called us back to say, YES, everything is covered by the AmEx coverage so they wouldn’t have anything else to follow-up on. They closed the case but said follow-up if something ended up not being covered. That wasn’t ever necessary as the AmEx insurance took care of things. So we definitely benefited from the extra AmEx coverage and wouldn’t hesitate to recommend it.

    • hawkslionsfam

      And I stumbled across this article because we are considering cutting off the AmEx card (for reasons unrelated to the topic of discussion) but was wondering if any other companies offered the extra premium insurance.