Rental car insurance is a valuable benefit that often goes overlooked by consumers when it comes to credit card perks. While flashy rewards points may steal the spotlight, understanding the ins and outs of rental car insurance coverage can save you time, money, and stress in the long run.
When it comes to rental car insurance, it’s essential to know the basics. To be eligible for coverage, you must pay for the rental car with the credit card that offers the protection. The primary renter must also be the cardholder, although other drivers listed on the rental contract will also be covered. Additionally, you typically need to decline the car rental agency’s collision damage waiver (CDW) to utilize your credit card’s insurance.
The CDW provided by rental companies covers damage to the rental car in case of an accident or theft, as well as towing charges related to covered damage. However, these policies can cost anywhere from $25 to $35 per day. By using your credit card’s insurance instead, you can decline the CDW and have peace of mind knowing you’re covered.
It’s important to note that credit card rental car insurance usually does not include liability coverage. This means that if you cause an accident that damages another vehicle or injures its passengers, you would be personally liable. To have full liability protection, you may need to purchase the rental company’s insurance at the counter, have coverage through your car insurance at home (which typically only covers domestic rentals), or purchase a separate policy.
When it comes to credit card rental car insurance, there are two main types of coverage: primary and secondary. Primary coverage applies first, regardless of any other insurance the renter may have, while secondary coverage pays only the amount not covered by another policy. Primary coverage is generally preferred as it eliminates the need to file a claim with your personal car insurance, which can lead to deductible payments and premium increases.
Premium credit cards are more likely to offer primary rental car insurance coverage. Cards from issuers like Chase, U.S. Bank, UBS, Capital One, and American Express provide primary coverage, with American Express offering the option to purchase primary coverage for an additional fee. While primary coverage may come at a cost, the terms are often more generous than those for secondary coverage.
In addition to credit card insurance, you can also purchase primary car rental insurance through companies like Allianz and Bonzah. It’s essential to understand the coverage limitations of your credit card insurance, as some policies may exclude certain types of vehicles, countries, or rental durations.
Overall, primary rental car insurance offered by credit cards can provide valuable peace of mind and savings when renting a car. Before applying for a card or heading to the rental counter, be sure to investigate the benefits and terms of the insurance provided by your credit card to make the most of this valuable perk.