Credit Card Car Rental Insurance

A reader send the following question about credit card rental insurance coverage:

I also noticed you had a section on car rental insurance and using a credit card for that.  I was under the impression that you have to have a primary insurance first in order to take advantage of the card car insurance.  We spent over $800 in car insurance last November.  I’d sure like not to have to repeat that if possible.  We have a Capital One Visa and MasterCard, plus the American Express that I’m thinking of canceling.

Credit Card Car Rental Insurance

Car rental auto insurance rates are outrageous.  In fact, they must generate a great deal of revenue, because there have been occasions when the customer service representative has almost insulted me for not getting the insurance. 

I grabbed a Visa credit card agreement and this is what it has to say about the auto rental collision damage waiver:

Who is eligible?  You are eligible only if you are a valid cardholder whose name is embossed on an eligible U.S- issued Visa Business [this is a business card] card.  Only you, as the renter of the vehicle, and any additional drivers permitted by the auto rental agreement are covered.

So, there is nothing here about needing your own primary insurance first. 

As far as auto rental insurance, here are a few other things you should know:

  1. It is possible that your auto insurance policy covers you as a driver in a rented vehicle.  The only way to know is to call them.  Some companies insure the person (any vehicle they drive) and others the car (anyone who drives the car).  If your insurance company covers you when you drive any vehicle, then you do not need additional car rental insurance.
  2. The auto rental collision damage waiver does have some specific exclusions – i.e. rentals over 31 days.  Be sure to read your credit card policy closely for details.
  3. Certain countries are excluded from the credit card coverage.  Commonly countries like Australia and New Zealand are excluded.  When traveling overseas, confirm that you are still covered in your country. 
  4. You must rent the car with the credit card that offers the auto insurance.  On some occasions, I’ve put down a credit card at the time of rental because it has the insurance.  Then when I return the car, I charge it on another card that has a better rewards program.  Most car rental companies will let you hold and make the reservation on one card and pay for it with another card.
  5. You must decline the CDW/LDW in order for your credit card insurance to take effect.

Generally speaking, you should be fine – even if you don’t have your own personal insurance, to rely on the credit card auto coverage.  Just do your homework and confirm your terms and conditions with the credit card.

I’ve always wondered if credit card rental insurance was legit, but my dad did have some damage done to a rental car.  In his case, there were no issues, no hassles.  The credit card company quickly and professionally took care of all the charges.

Anyone else had good or bad experiences when making a claim with your credit card when you rented a car?

Comments

  1. WYRGUY says

    WHAT AMOUNT OF COLLISION INSURANCE WOULD BE PROVIDED BY THE INSURANCE CO. THAT A PERSON HAS ON THEIR AUTO , WHEN USING THE AUTO POLICY FOR A CAR RENTAL IN THE US?? MY VAN IS WORTH $5,000.00 WHAT AMOUNT OF COLLISION COVEREAGE WOULD MY POLICY PROVIDE ON A CAR RENTAL??

    • Craig says

      You’ll need to contact your credit card and find out if the insurance is primary or secondary. You’ll also need to contact your auto insurance company for specific answers to this questions.

      Sorry I couldn’t be more helpful.

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