Best Credit Cards for Rental Car Insurance (2024)

The average cost of a rental car is $58 a day, according to popular travel site Kayak. When you rent a car, you have the option of purchasing insurance from the rental car agency. But many credit cards offer a form of rental car insurance as a benefit for cardholders. This can help you save money on your next rental, whether you’re heading out on a trip or while your own car is in the shop. Here are the best credit cards for rental car insurance.

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How does credit card rental insurance work?

Many credit card issuers offer their cardholders car rental insurance. While you may hear it referred to as insurance, the coverage actually comes in the form of a loss damage waiver (LDW) or collision damage waiver (CDW). 

These waivers aren’t insurance policies. Instead, they release you from some of or all the financial responsibility in the event of rental vehicle damage or theft.^[1]

Many travel, business, and cash back credit cards offer this coverage, and the terms and conditions vary with each card. But typically, you can activate the benefit just by charging the cost of the rental car to the credit card and declining the rental agency’s collision insurance.

In the event of theft or damage, you’ll usually cover the costs and then file a claim through the credit card company for full or partial reimbursement. However, the coverage can vary among card issuers and may be limited in scope.^[1]

Primary vs. secondary coverage

If you use your credit card’s rental car protection, it’s important to know whether you have primary coverage or secondary coverage. Primary car insurance is ideal because you file just one claim and may avoid premium increases to your personal car insurance policy. Secondary insurance requires you to file a claim through another form of coverage first.

Here’s the difference between the two:^[1]

• Primary coverage kicks in first, so you can file a claim directly through your credit card company after a covered loss. This may eliminate the need to use your personal car insurance policy, which usually involves paying a deductible and potentially experiencing a premium increase when your policy renews. But if your claim exceeds the credit card’s reimbursement limit, you may need to pay additional costs out of pocket or through your personal insurance.

• Secondary coverage will come into play after you file a claim against your personal insurance policy or another type of coverage. For example, it may reimburse the deductible you pay when filing a rental car claim against your personal insurance.

Best credit cards for rental car insurance

Many credit cards offer car rental insurance, but they all come with different coverage options, costs, and benefits. You’ll need to consider what works best for you based on how you plan to use the car insurance benefit and how much you want to spend on the annual fee.

The following best cards all offer primary rental car insurance, have a welcome bonus offer, and won’t charge foreign transaction fees.

Best for luxury travelers: Chase Sapphire Reserve

Annual fee: $550

The Chase Sapphire Reserve is a travel rewards card that covers car rentals in most countries for up to 31 consecutive days. The card provides primary coverage and reimburses up to $75,000 for theft and collision claims, loss-of-use charges, administrative fees, and towing charges.

Some of the card’s other perks include $300 in annual travel credits, Priority Pass Select membership, and travel interruption insurance. Cardholders also earn bonus rewards points on all dining and travel purchases. But with an annual fee of several hundred dollars, it’s only a good option if you can use all of card’s benefits.

Best for casual travelers: Chase Sapphire Preferred

Annual fee: $95

The Chase Sapphire Preferred card covers car rentals in most countries for up to 31 consecutive days. The collision damage waiver is primary and covers theft, damage, loss-of-use charges, administrative fees, and towing charges up to the actual cash value of most rented cars.

Cardholders also get bonus rewards points on all dining and travel purchases, a 10% points bonus on their cardmember anniversary, and a $50 annual hotel credit for stays booked through Chase Travel.

Best for small-business owners: Ink Business Preferred

Annual fee: $95

The Ink Business Preferred card covers car rentals in most countries for up to 31 consecutive days, reimbursing for collision and theft charges up to the actual cash value of most rental vehicles.

The coverage is primary if you’re renting the car mainly for business purposes, renting outside the United States for personal use, or if you don’t have your own car insurance. But the coverage is secondary if you’re renting a car in your own country or you’re renting for personal reasons.

Cardholders also get free employee cards and bonus rewards points on common business purchases.

Best for mid-level travel perks: Capital One Venture X

Annual fee: $395

The Capital One Venture X covers car rentals of 15 consecutive days within your country of residence and 31 consecutive days outside it. The coverage reimburses you for theft and collision damage up to the actual cash value of rental vehicles that have an MSRP of less than $75,000.

Among the cards on this list, the Venture X rewards you the most for your purchases — both on travel spending and otherwise. Cardholders also get $300 in annual statement credits, Capital One Lounge access, and President’s Circle status with Hertz.

Best for United Airlines loyalists: United Explorer Card

Annual fee: $0 first year, $95 thereafter

The United Explorer covers car rentals in the U.S. and foreign countries. You’ll receive reimbursement for theft and collision damage up to the actual cash value of the vehicle for most rental cars when you charge the rental car cost to the card and decline the agency’s coverage.

Cardholders also receive complimentary perks when flying with United Airlines, plus bonus miles on United purchases, dining, and hotel stays.

What does credit card rental insurance cover?

Rental car coverage through your credit card typically only includes an LDW or CDW. This type of waiver typically releases you of financial responsibility for:

• Damage to your rental vehicle

• Theft

• Towing charges

• Administrative fees

• Loss-of-use charges, which compensate the rental company when the car needs repairs and the company can’t rent it out

The rental collision damage waiver might become void if you violate the rental agreement, the car is stolen because of your negligence, or you cause an accident while breaking the law — such as speeding or driving under the influence.

Additionally, the waiver is limited to only your rental vehicle. That means you typically won’t get financial coverage for the following:

• Bodily injuries to yourself, your passengers, and anyone else

• Damage to other cars and property

• Medical expenses for you and passengers in your car

• Rentals from car-sharing services, like Zipcar

• Loss or theft of your personal belongings

• Mechanical breakdowns

You can check whether your credit card includes car rental coverage by logging into your online account, calling your card issuer, or visiting the issuer’s website. It’s a good idea to get the coverage information in writing from your card issuer.^[1] Your card member benefits guide usually includes a full overview of what’s included in your coverage.

When do you need to buy additional coverage?

Credit cards might give you some financial protection while driving a rental car, but you might need more coverage in some cases, such as:

• You’re renting for an extended period of time.

• You don’t have personal auto insurance.

• You rent cars often.

• You’re renting a car abroad.

• Your credit card only includes secondary coverage.

Other types of rental car insurance to consider

If you need additional rental coverage, you have some options. For instance, many auto insurance companies sell non-owner car insurance policies, which are for people who don’t own a car but still drive. These policies include bodily injury liability and property damage liability. You may consider buying non-owner car insurance if you don’t own a car but you frequently borrow or rent vehicles.

Car rental companies also sell rental car insurance policies, which include the following types of insurance:

• Loss damage waiver or collision damage waiver: Covers theft or damage to the rental car

• Liability coverage: Pays for the other driver’s repair costs and medical bills when you cause an accident

• Personal accident coverage: Pays for any medical bills, emergency medical care, transportation, and other unexpected costs for you and your passengers if you’re hurt in an accident

• Personal effects coverage: Replaces your personal items (up to a specified cash value) if they’re stolen from the rental car

What should you consider before choosing a credit card for car rental purposes?

Before applying for a credit card that has car rental coverage, consider these points:

• It might not cover everything. A CDW or LDW won’t include liability insurance, so you’ll need to acquire this type of coverage from a personal auto insurance policy or through the rental car agency.

• Know what’s in the fine print. Check whether the insurance reimburses for administrative fees, loss-of-use charges, or towing charges. Also ask the card issuer what its coverage excludes and includes, so you can be prepared before you drive.

• Consider the credit card’s costs. Before you apply for a credit card, make sure you have the budget for the annual fee. And if you tend to carry a balance on your card, choose one with a low APR so you save on interest costs.

• Think about the card’s rewards program. Points, miles, and cash back are great, but the card is only a good choice if its benefits align with your spending habits. Otherwise, the rewards you earn and the benefits you use won’t outweigh the annual fee.

Credit card rental insurance FAQs