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. However, these waivers, which you’ll hopefully never need, 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 $25k to $50k. The base insurance requirement still leaves you open to significant liability, particularly when it comes to six-figure medical bills. Thankfully, your credit card will also step in – sort of. All four major card networks offer rental insurance, but have substantial variation in benefits and requirements.

Please note that cards on 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.

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 offers just about the best free benefits in the business. First off, they offer rental car insurance on all of their cards – standard, Signature, rewards, the works. If your car is stolen or damaged, AmEx and MasterCard require you to turn in the keys to prove the car wasn’t unlocked at the time. Visa has no such requirement.

MasterCard: Its benefits are also fairly standard, although it doesn’t cover loss of use in practice or theft of an unlocked vehicle. It also is not offered on all cards – according to Customer Service, Platinum and World MasterCards “generally” come with the benefit, but not always.

American Express: AmEx is the only one to offer extra coverage for a small fee. It offers free secondary coverage up to $50,000 ($75,000 on the American Express Platinum) but will offer primary coverage with a higher limit and protection against injury and property damage. It does require you to report the damage in a short 48 hours, so be aware that you need to file your paperwork quickly.

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 say that their terms vary by issuing bank. MasterCard, for example, could not tell us that certain tiers of cards would or would not receive coverage, and Visa told us that the maximum vehicle value would vary by issuer.

*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.
**Must turn in your car keys as proof that the car was locked at the time of theft.

American Express

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

**Must turn in your car keys as proof that the car was locked at the time of theft.

Exemptions

Students: Personal, Gold and Rewards Plus Gold cardholders who are enrolled in a four-year college or graduate program in the U.S., and are receiving student benefits provided by cardmembership, are ineligible.

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

• $100,000 car damage
• $100,000 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:

Discover provides primary rental insurance  on the Escape card, or if the car is a) rented outside the US, b) rented by an employee using a business credit card and c) rented without a driver.

**Must turn in your car keys as proof that the car was locked at the time of theft.

Cards that offer PRIMARY car rental insurance

All of the networks give extra coverage to some of their high-end cards. Here’s a few of the ones lucky enough to get primary insurance:

United MileagePlus Explorer: The United MileagePlus Explorer is the recent lovechild of the Continental/United merger, replacing the old MileagePlus Select Signature Visa.  And fortunately for previous United cardholders, this new one is identical to the OnePass Plus, down to the rental car coverage.

United MileagePlus® Explorer Card
	NEW! No foreign transaction fees! 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 Earn double miles on tickets purchased from United, and 1 mile per $1 on all other purchases Enjoy priority boarding privileges and visit the United Club with two one-time-use passes every year Use your miles for any seat, any time, on any United flight Your miles don't expire as long as you're a Cardmember, with no limit to the number of miles you can earn $0 intro annual fee for the first year, then $95		Pros No foreign transaction fee Cons Has annual fee

Discover It: The Discover It, the network’s best offer, has terms similar to the other networks’ baselines. It more or less has the same coverage as the basic AmEx plan, except that it offers primary, rather than secondary, insurance.

Discover it®
	The new Discover it card is out to change the way people think about credit cards. Fair...No annual fee. No overlimit fee. No foreign transaction fee & no pay-by-phone fee. No late fee on your first late payment. And we won't increase your APR for paying late.* Generous…5% Cashback Bonus on up to $1,500 in purchases at Home Improvement Stores now through June with free and easy sign-up. And 1% cash back on all other purchases.* Plus a Cashback ConciergeSM who guides a free, personalized online tour to help you get the most rewards for how you use your card. Flexible…Choose your own due date and pay up to midnight ET online or by phone. Human…talk to a real person any time with 100% U.S.-based service. Safe…Because you’ll never pay for unauthorized purchases with our $0 Fraud Liability Guarantee. 0% Intro APR* on purchases and balance transfers for 14 months. Then the variable purchase APR applies, currently 10.99% - 22.99%. *Click apply for Terms & Conditions.		Pros No annual fee 0% for 14 mos on transfers No foreign transaction fee

An explanation of benefits

Here are some of the often used, but less often understood, terms you’ll see when combing through damage waiver terms and conditions:

• 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.

Special thanks to Paul Burke for inspiration and research on this article.