Car rental insurance can be a stressful topic of discussion at the rental service counter. The customer service rep at the counter is talking at you about fees, deductibles, waivers and potential accidents, while all you want to do is get out the door and drive!
Did you know that your credit card could potentially make all that drama go away … for FREE?
There is a crop of credit cards that offer car rental insurance as a benefit for cardholders who pay for their rental with the card.
But those cards are getting harder to find. Many credit cards have taken away this perk in recent years.
“Credit cards have been dumping auto rental coverage, money expert Clark Howard says.
“They have found it to be a royal pain and expensive, so they are dumping it everywhere.”
In this article, I’m going to help you find cards that still offer rental car insurance coverage. I’ll also dive into the pros and cons of using your credit card to earn that insurance and detail some of the differences in coverage from one card to the next.
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Primary vs. Secondary Car Rental Insurance: What’s the Difference?
When checking to see if your credit card offers car rental insurance, you want to find out as much information as you can about the policy. You can usually find the details in your card’s guide to benefits.
If you’re lucky enough to have coverage, one of the first things you should determine is whether it’s to want to find out is if it is primary or secondary coverage.
Let’s talk about the differences between the two.
Primary Car Rental Insurance Explained
When you file a claim on a rental car incident, the primary policy is the one that is going to be used first.
If you get primary coverage from a credit card, that means it would be used before your personal auto insurance or any other coverage you have.
Having primary rental insurance through your credit card is especially handy because it could prevent you from having to pay your personal auto insurance deductible. And it could potentially prevent your personal insurance rates from rising because you made a claim.
However, since offering primary coverage is a much riskier proposition for the card issuer, it’s a rare benefit to find. As a result, you usually see this perk only on premium credit cards that charge an annual fee.
Secondary Car Rental Insurance Explained
Most credit cards that offer car rental insurance benefits offer secondary rental insurance.
This means that you are going to be required to have a primary policy in place for the rental, and those benefits will need to be exhausted before the card’s policy will kick in to help.
So, for most drivers, that means you’ll have to file a claim with your personal auto insurance first and then use the secondary coverage for additional help.
What Rental Companies Are Trying To Sell You
When we’re talking about the insurance coverage available at the rental car counter, it usually means a collision damage waiver and a loss damage waiver.
These are the two products that rental companies try to sell you as a way to insure against any damages to the car. Essentially, they’re asking you to pay a daily fee for them to agree to not hold you responsible for damages to the vehicle.
It’s worth noting that these do not cover physical injury to you, your passengers or people in other vehicles if you’re involved in an accident.
That’s why it’s important to make sure you’re adequate covered by your primary auto insurer before you rent a car.
Best Credit Cards for Primary Car Rental Insurance
Finding a credit card that offers this is increasingly difficult. However, there are still a few cards on the market that will grant you primary rental insurance if you use the card to pay for the rental.
Here’s a list and information on other perks the cards offer.
Best Credit Cards for Secondary Car Rental Insurance
This is easier coverage to find on a credit card. That’s because you have to file a claim with your personal auto insurance carrier first. And, of course, that means your credit card issuer is not responsible for as much of the damages.
But even this benefit is dwindling. In recent years, we’ve seen popular cards such as the Costco Anywhere Visa and Fidelity Rewards Visa drop this benefit. All Discover cards ditched rental car coverage in 2018.
But a large list of American Express cards still offer it. Clark now gets his car rentla insurance coverage from an Amex card after years of using his Costco card for it.
Here’s a look at some of the best cards that are still offering the secondary rental insurance benefit.
5 Things To Know Before You Use a Credit Card for Car Rental Insurance
Before you head to the rental counter, make sure you know what to expect when you use your credit card’s car rental insurance:
1. Decline, Decline, Decline
In addition to using your qualified credit card as payment for your rental, you usually have to decline the rental company’s secondary insurance offer in order for your credit card’s coverage to be valid.
This is a requirement — but also a blessing.
Think of it as your guilt-free pass to rebuff the rental clerk’s persistent requests that you pay them more money.
2. Your Coverage Window Will Be Limited
Each card has a limit to the amount of days that your rental will be eligible for coverage.
Generally, you’re looking at up to a month of coverage from Amex cards and Chase cards, but you’ll want to check your limits before you rent.
If you’re planning a three-month-long excursion with your rental car, you may want to explore some alternative options for insuring yourself.
American Express offers a program that allows you to pay extra with your qualified credit card to receive primary insurance on a rental for up to 42 consecutive days. This is still probably cheaper than the daily insurance rate at the rental counter, so give it a close look before you rent.
3. It May Not Work Everywhere
When it comes to renting a car, all countries are not created equal.
If you’re renting in the United States, you should be fine.
But international rentals definitely will require a check of your card’s benefits guide to make sure your destination country is not excluded.
For example, Capital One excludes Jamaica and Israel.
Things like traffic laws, road conditions and accident rates are likely among the deciding factors for credit card benefit issuers when it comes to these exclusions.
4. Not Every Type of Vehicle Is Covered
When you read your card’s guide to benefits, you may be surprised to see there are stipulations on the type of vehicles that are eligible for rental coverage.
Large passenger vans, motorcycles and RVs are likely to be excluded.
And if you’re renting a really expensive Lamborghini for a spin on the town, it’s unlikely that your card is going to cover that either.
5. Bad Behavior May Nullify Coverage
Card issuers often add disclaimers for “negligent” behavior as grounds for nullification of your rental coverage benefits.
This can include things like leaving your rental car running and unattended, allowing an unlicensed person to drive or driving your rental under the influence of drugs or alcohol.
Again, a tour of the card’s guide of benefits is likely to highlight which of these exclusions are part of your coverage.
If you’re the type of person who travels often, renting cars sometimes is an unavoidable event. And if you’re going to do that often enough, you’ll need to make sure you’ve mitigated the risks involved by being properly insured.
In that context, you’re a strong candidate for one of these cards. Having a credit card that offers you primary or secondary car rental insurance free of charge can take a huge weight off your shoulders at the rental counter.
But remember: Money expert Clark Howard says that a credit card’s temporary benefit should never come before the long-term merits of having the card in your wallet.
So before you sign up for a card simply for this benefit, make sure you’re already carrying a card in your wallet that gives you good spending rewards, a low APR and preferably has no annual fee.
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