“Are you sure?” asks the perky salesperson with the plastic smile at the car rental counter. Another question—she already asked you about GPS, prepaid gas, tolls, and now insurance. What should you do?

Make the wrong choice, and you’re paying up to $45 per day for something you don’t need. Or worse, if the car is stolen or damaged, you could be on the hook for thousands of dollars.

Don’t worry. You can skip the hassle and headache by knowing how your credit card rental coverage works. And when you learn about the best cards, you’ll be one step closer to the right protection and saving a truckload of cash. And while you’re saving, try Insurify to find the cheap car insurance that will protect your everyday vehicle and your rental.

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How Does Credit Card Rental Car Insurance Work?

Rental car companies offer four types of protection, which you must accept or decline to rent a vehicle. They sell a collision damage waiver (CDW) (if you damage the rental), liability coverage (if you hurt someone else), personal accident coverage (if you or your passengers are injured), and personal effects coverage (if your stuff is stolen).

Credit cards only deal with collision damage waivers. Your personal auto insurance policy, medical insurance, and homeowners or renters would cover the other three, respectively. Because most people have these coverages already, State Farm is right when it says the rental car agencies’ coverages are a waste of money for most people.

Collision Damage Waiver

The car rental collision damage waiver, sometimes called the loss damage waiver (LDW), reimburses you for damage to the rental car or theft of the vehicle while it’s in your possession. It also covers “loss of use” of the rental vehicle, which car rental company may charge if it is damaged or stolen. (They pass the lost revenue on to you since they can’t rent out the car anymore.)

Primary vs. Secondary Rental Car Coverage

What’s the difference between primary and secondary CDW coverage from your credit card

Primary coverage protects you without the need to file a claim with your auto insurance. Secondary coverage, while still helpful, only kicks in after your own insurance. It typically picks up any costs not covered by your insurance, such as the deductible. Because secondary coverage requires you first to file a claim with your personal auto insurance, this option can lead to higher insurance rates for years to come after a covered claim.

Many credit cards offer (including Visa, Mastercard, American Express, and Discover) secondary CDW coverage for no extra cost. When you have this coverage, you can skip the costly car rental agency option. Both primary and secondary coverage usually have a maximum amount they will cover that either meets or exceeds the entire rental’s total cash value

It’s helpful to know that there are two scenarios where secondary coverage becomes primary. First is if you don’t own a vehicle (and therefore don’t have car insurance). Second is if you travel outside the U.S., where your personal auto policy doesn’t apply.

What’s Not Covered by Credit Card Rental Car Insurance

Your credit card rental car insurance typically won’t cover:

  • Liability (bodily injury to others or damage to other cars or property), your physical injuries, or theft of your stuff
  • Long-term rentals—15 to 31 days is the norm, and anything above that will need a different policy.
  • Specific countries (exceptions from coverage include Australia, Israel, Italy, Ireland, Jamaica, and New Zealand)
  • Certain vehicle types:
    • Antique cars. Any car over 20 years old and ones manufactured over 10 years ago.
    • Expensive cars. Luxury vehicle makes are not covered, and some cards restrict coverage to a manufacturer suggested retail price, such as $50,000.
    • Motorcycles/mopeds: Vehicles with fewer than four wheels
    • Vans/trucks/SUVs. Many will not cover a vehicle designed to transport over eight or nine people. Some cards restrict pickup trucks or full-sized SUVs (includes limos and RVs)
  • Car-sharing and peer-to-peer services, such as Zipcar

Before your trip, it’s always a good idea to contact the card issuer or credit card company and check your benefits guide to find out exactly what’s covered.

Steps to Get Coverage with Your Credit Card

To qualify for your credit cards for primary or secondary CDW coverage, you’ll need to:

  • Pay for your rental car with the protecting credit card.
  • Decline the rental car agency’s CDW/LDW coverage.
  • List all drivers on the rental car agreement.

Be the card’s account owner, although some cards pass the coverage to authorized users too.

5 Best Credit Cards for Rental Car Insurance

Here are the five best credit cards for rental car insurance. Chase offers the first four cards on the list and has the following details:

  • Gives primary CDW coverage.
  • Covers up to 31 consecutive days.
  • Protects up to the cash value of the car.
  • Gives you worldwide coverage.
  • Covers related towing.
  • Excludes:
    • antique vehicles 
    • luxury makes
    • Vehicles that seat over nine

The details on the fifth card are provided in that section.

1. Chase Sapphire Preferred Card: Best Overall

Chase leads the pack among competing travel cards with similar annual fees because it gives primary car rental coverage. Couple this with a bonus the credit card offers that matches or exceeds other cards in the category, and it’s no wonder why many people love this card and its cashback program.

Recommended Credit Score  670–850 (Good–Exceptional)
APR 15.99%–22.99% variable
Annual Fee $95
Rewards Rate Earn 2x points on travel and dining at restaurants, including airfare, hotels, fine dining, and cafes, and 1 point per dollar spent on all other purchases.
Foreign Transaction Fee (%) 0

Offer

Earn 60,000 bonus points after you spend $4,000 on purchases in the first three months from account opening. That’s $750 toward travel when redeemed through Chase Ultimate Rewards®.

Pros

  • 1-to-1 Point Transfer
  • Premium Travel Insurance and Purchase Protection
  • Extra 25 percent more value when points redeemed for travel

Cons

  • No incidental airline fee credit
  • No extra points for purchases that are not traveling or dining related

Perks

  • Get 25 percent more value when you redeem for airfare, hotels, car rentals, and cruises through Chase Ultimate Rewards.
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash’s subscription service. Offer must be activated by December 31, 2021.
  • Earn 5x points on Lyft rides through March 2022. That’s 3x points in addition to the 2x points you already earn on travel.

2. Chase Sapphire Reserve: Best for Car Rental Rewards

No, that’s not a typo. It’s 3x the points per $1 spent on travel and dining. The card gives primary car rental coverage and the travel protection and perks that are nothing short of premium. Yes, it has a hefty annual fee, but smart travelers make back the investment and cashback.

Recommended Credit Score  800–850 (Exceptional)
APR 16.99%–23.99% variable
Annual Fee $550 and $75 more for each authorized user
Rewards Rate Earn 3x points on travel and dining, immediately after earning your $300 annual travel credit, and 1 point per dollar spent on all other purchases.
Foreign Transaction Fee (%) 0

Offer

Earn 50,000 bonus points after you spend $4,000 on purchases in the first three months from account opening. That’s $750 toward travel when redeemed through Chase Ultimate Rewards®.

Pros

  • 3x Points on travel and dining
  • $300 Annual Travel Credit and Global Entry or TSA Pre-Check Fee Credit
  • Premium Travel and Purchase Protection
  • Extra 50 percent more value when points redeemed for travel
  • Complimentary Airport Lounge Access in over 1,000 airport lounges

Cons

  • High APR
  • Expensive Annual Fee

Perks

  • Get 50 percent more value when you redeem for airfare, hotels, car rentals, and cruises through Chase Ultimate Rewards.
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash’s subscription service. Also, earn up to $120 statement credits. Offer must be activated by December 31, 2021.
  • Earn 10x points on Lyft rides through March 2022. That’s 7x points in addition to the 3x points you already earn on travel.
  • Get one year complimentary Lyft Pink, a $199 minimum value. Offer must be activated by March 31, 2022.

3. United Explorer: Best Airline Credit Card

Double your points on travel and dining while flying while you earn miles to redeem in the United MileagePlus program. The card adds the primary rental car insurance coverage, a free checked back, and even discounts for in-flight purchases. Whether you fly domestic or international, you’ll land huge savings.

Recommended Credit Score  670–850 (Good–Exceptional)
APR 16.49%–23.49% variable
Annual Fee $0 intro offer, then $95
Rewards Rate Earn 2x miles on United Airlines purchases, hotels, dining, and delivery services, including Grubhub, Caviar, Seamless, and DoorDash. You’ll earn 1 mile per dollar spent on all other purchases.
Foreign Transaction Fee (%) 0

Offer

Earn 60,000 bonus points after you spend $4,000 on purchases in the first three months from account opening. That’s $750 toward travel when redeemed through Chase Ultimate Rewards®.

Pros

  • United Travel luxury benefits 
  • Miles may be worth more than competing cards
  • Extra Miles for hotels, restaurants, and delivery services

Cons

  • Only the first year has no annual fee.

Perks

  • Get 25 percent back as a statement credit on food, beverages, and Wi-Fi aboard United flights.
  • Save up to $140 per round trip with a free first checked bag.
  • Get two complimentary United Club one-time passes per year.

4. Ink Business Preferred: Best Business Card

The Ink Business Preferred Visa card has one of the most generous sign-up bonuses among business credit cards in the industry. And, if you travel for business, your auto rental will have primary rental car protection. You’ll also earn 3x points on travel and select business categories, and that’s why many savvy business professionals say the Ink Business cashback rocks.

Recommended Credit Score  670–850 (Good–Exceptional)
APR 15.99%–20.99% variable
Annual Fee $95
Rewards Rate Earn 3 points per $1 on the first $150,000 spent in combined purchases each year for travel, shipping, social media and search advertising, and internet, cable, and phone services. And earn an unlimited 1 point per $1 on all other purchases.
Foreign Transaction Fee (%) 0

Offer

  • Earn 100,000 bonus miles after you spend $15,000 on purchases in the first three months from account opening. That’s $1,250 toward travel rewards when you redeem through Chase Ultimate Rewards.

Pros

  • Lucrative bonus for new members
  • Many categories to earn extra points
  • Lots of ways to redeem rewards
  • Flexibility to transfer points to airline points programs

Cons

  • High spending requirement for the bonus
  • No extra points for dining or gas

Perks

  • Get 25 percent more value when you redeem for airfare, hotels, car rentals, and cruises through Chase Ultimate Rewards.
  • Enroll in the Avis Corporate Rewards program to earn rental reward days 2x as fast.
  • Get employee cards at no added cost.

5. American Express Cards with Premium Car Rental Protection: Best for Longer Rentals

This isn’t a specific card, but a service offered to American Express cardholders. The Premium Car Rental Protection gives you primary protection and is a good fit for drivers planning for rental periods from 32 to 42 days long. If you find yourself in this sweet spot often, it might serve you better to opt into this protection rather than applying for one of the other four cards. 

It’s also a great value if you already have an American Express card and want to upgrade from secondary to primary car rental protection when you travel. Other drivers who do not have personal auto insurance might couple this with the rental car company‘s bodily personal injury and physical damage liability insurance. This way, you get all four rental car company categories of protection at a lower price.

Summary:

  • There are two credit card coverage options, but we’d recommend the $24.95 option that gives you 33 percent more protection for just $5. You enroll ahead of time, and Amex automatically bills you when you rent the car. Please note it’s per period, not per day, so it’s way cheaper than the $11–$45 the rental company would charge per day.
  • Worldwide coverage except for Australia, Ireland, Israel, Italy, Jamaica, and New Zealand
  • Coverage:
    • Up to $100,000 of primary coverage for damage or theft of a rental vehicle
    • Up to $100,000 of accidental death or dismemberment coverage ($250,000 for California residents) (for you and your passengers)
    • Up to $15,000 for secondary medical expenses per person (for you and your passengers)
    • Up to $5,000 for secondary personal property coverage ($15,000 for Florida residents) (for your stuff)

Credit Cards for Rental Car Insurance: FAQ

Which credit card is best for rental car insurance?

Credit cards that offer a primary insurance collision damage waiver (CDW), such as some cards Chase offers, are among the best for rental car insurance. These cards pay for damage to your auto rental or theft of the vehicle up to the actual cash value, offer worldwide coverage, and help you avoid the rate hike a claim would cause on your auto insurance. Others have suggested the Capital One Spark Cash and Capital One Spark Miles business cards outside of Chase because they also have primary coverage. But we found the Chase cards better. If you're looking for auto rentals between 32 and 42 days, then an American Express card with Premium Car Rental Protection is a smart buy. It covers you for pennies on the dollar compared to the cost per day of coverage from the rental car company.

How do you use credit card car rental insurance?

To qualify for your credit cards primary or secondary CDW coverage, you must: Pay for your rental car with the protecting credit card. Decline the rental car agency's CDW/LDW coverage. List all drivers on the rental agreement. Be the card's account owner, although some credit card issuers pass the coverage to authorized users too. Primary coverage protects you without the need to file a claim with your auto insurance. Secondary coverage, while still helpful, only kicks in after your auto insurance. It typically picks up any costs not covered by your insurance, such as the deductible.

Where can I compare cheap car insurance quotes online? 

While you're thinking of getting the best car rental insurance benefits, why not do the same for your regular car insurance? You should check a website that collects quotes from the auto insurance companies available in your area. Use a car insurance comparison tool like Insurify to compare up to 10+ real quotes for your combined driver profile and unlock savings and car insurance discounts. Rates can vary based on your driving history and personal profile, but you should be able to find a competitive price. Insurify provides the cheapest car insurance quotes from local companies in just a few minutes.

Conclusion: How to get the best and cheapest car insurance

“Yep, I’m sure,” you say as you smile back at the car rental salesperson, knowing your credit card and other insurance have you covered. It’s no worries about policies, no worries about hefty per-day costs—in fact, no worries at all. You relax as you make your way to the car and cruise to your destination.

While you’re picking the right card, you might as well pick the right car insurance, too. You can use Insurify to compare the best car insurance rates, coverage options, and companies, personalized for your price point. Get free car insurance quotes today on America’s best-rated auto insurance comparison site.

Score savings on car insurance with Insurify

Compare Quotes

 

Updated September 11, 2020

Courtney Roy is a financial and technology copywriter. He creates content that makes an actionable difference in the life of his readers. In addition to years of experience across multiple industries, Courtney has insurance licenses, a real estate license, and a degree in electrical engineering. He and his wife chase their five kids in the Phoenix, Arizona sun. You can learn more at thecopyprophet.com.