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Rental Car Insurance: Which Credit Cards Have You Covered

—Aw, nerds! Looks like the American Express Platinum offer mentioned here is temporarily unavailable.

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. 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:

  • In general, your credit card offers secondary rental insurance. This means that it will 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 good enough.
  • In general, you must refuse the coverage offered by the rental car agency in order to receive rental car insurance benefits from your credit card. For exceptions to this, see below.
  • The information below applies to consumer credit cards. While many business credit cards offer rental car insurance, coverage levels could be substantially different from the benefits described in this article.
  • 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. Please call your bank to ask about your specific card’s benefits.
One final 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 that 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 place the 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 really 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: Usually, personal-use vans that seat eight people or fewer are covered. However, some waivers specifically exclude SUV’s, 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, they offer rental car insurance on all of their cards — standard, Signature, rewards, the works. However, they limit their 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 one to offer premium coverage for a small fee. It offers free secondary coverage up to $50,000 ($75,000 on the American Express Platinum and Delta Reserve 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 benefits are the worst of the lot. The coverage is limited to a handful of cards. Unlike the other three networks, Discover makes no pretense of covering loss of use fees, covering only collision damage up to a scant $25,000. The only bright spot is that the Discover Escape offers a step up from the network’s other offers.

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 31 consecutive days
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 10 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 Platinum Card 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 7 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 2 days/60 days
Source AmEx AmEx AmEx

**A $19.99 premium plan also exists, but with lower coverage limits

Exemptions

Students: Personal, Gold and Rewards Plus Gold 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 Motiva, Miles, Open Road, More Escape
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 7 seats 7 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

Cards that offer primary car rental insurance

United MileagePlus Explorer: The United MileagePlus Explorer is one of the only cards on the market that provides primary rental car insurance at no additional cost (besides the annual fee, of course). If you’re a loyal United flyer and often rent cars, this card might be the right choice for you.

Example image of United MileagePlus® Explorer Card

United MileagePlus® Explorer Card

  1. 1 stars
  2. 2 stars
  3. 3 stars
  4. 4 stars
  5. stars
Apply Now on Chase's secure website

Pros

  • No foreign transaction fee

Cons

  • Has annual fee
  • Needs excellent credit

Sign-up Bonus

Start with 30,000 bonus miles after you spend $1,000 in the first 3 months.

Annual Fee

$0 intro annual fee for the first year, then $95

Intro APR Promotions

None

APR

  • APR: 15.99% (Variable)
  • Penalty APR: Up to 29.99%, Variable
  • Cash Advance APR: 19.24%, Variable

Card Details

  • Start with 30,000 bonus miles after you spend $1,000 in the first 3 months
  • Check your first bag for free - save up to $100 per roundtrip
  • Enjoy priority boarding privileges and visit the United Club with two one-time-use passes every year
  • No foreign transaction fees!
  • Earn double miles on United ticket purchases, and 1 mile per $1 on all other purchases
  • Your miles don't expire as long as you're a Cardmember, with no limit to the number of miles you can earn
  • Use your miles for any seat, any time, on any United flight
  • $0 intro annual fee for the first year, then $95

  • Student

    @NerdWallet, I need clarity on the Visa “Rental Period 15 consecutive days domestic”…Is it safe to assume this coverage is no good for a weekend getaway?

    • Me112233

      What it means is that the rental period has to be for 15 days or less. Your weekend getaway would be covered.

      • Mikee

        So I wonder what happens if one:
        A/ Rents in France instead of in the U.S. with a Chase Visa United and…
        B/ Is it better to rent for two times 15 days if I’m overseas for 39 days instead of risking the last 8 days with NO insurance?
        It seems that no matter what one choses, one is at a loss. Either of money or insurance coverage.

        • Me112233

          Be sure to ask about non-USA rentals, typically Canada is OK, while other countries can pose a problem with a US based card. Not sure about your math there, but yes, two distinct rentals can extend your effective coverage– be sure that you aren’t simply renting the same car from the same place; that would probably get you a claim denial should something happen. And yes, you have made a proper analysis of the concept of insurance — you either pay for it, or you take the risk yourself.

          • Mikee

            “Non-USA Rental” how interesting! I would assume that an outfit like Hertz would know that I’m automatically a U.S. Citizen renting in France. Being so Global I’m sure they are aware of all the rental restrictions and insurance ramifications. For more info I’ll call a live person on Monday to find out about the gory small print. I know that it will always be in their favor but an ounce of prevention….

          • Me112233

            Hertz will know about their own insurance coverage and offerings, but probably won’t go on record (thus be liable) to tell you what coverage will or won’t be provided by your credit card. Probably best to call the credit card company for the “rest of the story” on non-US rentals.

          • Mikee

            Yes ME. I realize that and will be talking with Chase tomorrow. No matter what one claims, one is never completely informed! But since I’m going to France and ‘stuff’ is going on there, I’d hate to be liable for a radical’s breaking my windshield and/or more!

          • Me112233

            Be reminded that most property-insurance policies have an “act of war” exclusion.

          • Mikee

            Granted but:
            A/ My property insurance is for my home in CA, USA.
            B/ Are ‘we’ at war with anyone in France??

          • Me112233

            I was addressing your “stuff is going on there” comment. Property insurance rarely pays for things damaged in “acts of war”. You don’t have to be a party to the act of war, nor does your country. Act of war is commonly includes things like invasion, insurrection, revolution, military coup and terrorism. So, if some crazed muslims decide to blow up something, and your rental car is destroyed in the process, the insurance may not pay, even if you have insurance.

  • gpks00

    Called Chase and was informed that if i use a coupon (for example, National rent 2 get 1 free, coupon gives me a $0.00 rental, plus fee and tax) then the rental will not be covered at all when i decline CDW.

    Also of note: insurance is supplemental, but as i do not have insurance or own a car, it will act a primary.

    The Benefit Admin also said that a coupon like a rent 2 days get the 3rd free is accepted.

    In my first case above, an accident would have to goto a Claims Examiner and reviewed.

    So no guarantees..

    So my Free Rental ended up costing me $33 (CDW and Liability) (May actually buy stupid None car owner liability insurance for stupid car rentals and zipcar type sharing companies.)

    ANNOYING!

  • clarity007

    United Chase MileagePlusExplorer card claims it is primary.

  • http://www.unlimitedcertificates.com/ Lois Williams

    Last time I have so much issues with the car insurance policies and now I have checked for the best car insurance policies and profits about that, its quite informative post as this perspective of car rental insurance. its quite informative. thanks

    • Mikee

      Huh???

  • CW

    Do you know if credit card companies insurance coverage includes or excludes truck rentals for moving? (Budget/Penske/UHaul)??

  • Mikee

    Excellent point, Scott. The problem is when one rents for a month or over, this CDW DOUBLES the bargain price of the rental. I know… Insurance always seems expensive ‘before’ any incident, but any Car Rental agency will fight to the tooth to avoid paying or reimbursing anything to their customers…

    • http://websitecash.net/ Scott McKirahan

      Agreed. If you are renting for a week or more, it becomes pretty darned expensive to pay for the car rental company’s insurance, which is why I said it makes sense for short rental periods. I’m not sure what you are talking about in regards to car rental companies fighting to NOT pay for damage IF you have bought their LDW/CDW. I’ve never seen it happen and have been in the industry, working for several companies, large and small, for many years. They will definitely fight if you have NOT purchased their damage waiver, just like all insurance companies will. Finally, you cannot rent for more than a month from any car rental company anyway; there is NO insurance that covers you for more than a month – including a car rental company’s own insurance carrier. You have to end a rental after a month and start with a new rental if you are going to rent for a period greater than a month.

      • Mikee

        Thanks again Scott. Good info. Simply that a friend of mine rented with all insurances offered and flipped the car in the snow and it took him over a year of fighting to avoid paying ultra high fees. This was a 1-week rental in MT.
        But I guess I’ll have to split my Euro rental in 2 halves to end up fully insured and avoid eating and buying stuff in Paris ;-(

        • http://websitecash.net/ Scott McKirahan

          Love to see that case and who the rental agency was and yes, you definitely need to split your rental into two halves if you are going to rent for more than a month. Very few car rental companies will even let you rent a car without doing that (and the ones who will allow it are likely small companies who are very ignorant of insurance policies). Many car rental companies may take a reservation for more than a month, but you’ll find out at the counter that you need to re-rent in the middle.

      • Mikee

        Interestingly, Hertz allows me (via their website) to rent for 39 days and tabs all the insurance costs in addition to the actual rental. So does that mean that they are willing to rent their cars, insured, for longer periods? I’ll have to talk to them ‘live’ on Monday…. Is it because I’m a Hertz Member??? Hmmmm….

  • John C

    Mike, the article mentioned that the cards mentioned, offer “secondary” coverage, meaning you would have to have regular car insurance first. Then if there was a need for additional coverage, the card company would offer coverage above the limitations of your personal insurance company’s policy.

  • Alex Tanford

    In response to Mike, it’s my understanding that liability insurance is automatically included in the base rental fee. That is, both the owner of a car (Hertz) and the driver (you) have potential liability to innocent third parties hurt in an accident. So, the car company automatically provides liability insurance. The credit cards (and CDWs) are to pay for damage that happens to the rental car itself while it’s in your possession.