If your next trip includes renting a car, you might worry about what could happen if you’re in an accident—or even just scratch the paint. Using the right credit card to pay for your rental, could give you some financial protection and peace of mind.
Featured Partner Offers
What Is Rental Car Insurance?
There are four main types of rental car insurance, each covering a person or property who might be involved in an accident:
- Collision damage waiver covers damage, theft or vandalism related only to your rental car.
- Personal accident insurance covers medical expenses for a driver and their passengers.
- Liability insurance covers damages caused if you’re found at fault for an accident. This could include medical expenses for your or another vehicle’s passengers, damages to another vehicle or property damage.
- Personal effects coverage deals with any property stolen from your rental car.
The collision damage waiver is most commonly offered as a credit card benefit of these four.
What Is a Collision Damage Waiver?
A collision damage waiver (CDW) is a form of insurance that covers damage to the rental car while it’s in your possession. This can include a scratch on the bumper, damage caused during a break-in or a more serious accident, regardless of who’s at fault. Many credit cards offer a replacement for the rental company’s CDW, and it’s the most common type of rental benefit provided by credit cards.
This credit card benefit typically provides coverage for damage to a rental car up to a certain amount. It will usually exclude certain types of vehicles, and coverage may vary by country. The details are worth checking before relying on your card for insurance.
It’s important to understand that the CDW only covers physical damage to the rental car. It doesn’t cover medical or liability coverage.
Medical Expenses
If you find yourself in the hospital after a severe accident, you could require coverage for your medical expenses or risk having to pay out of pocket.
This type of benefit is less common, and will likely be found in midrange and premium cards. For example, the Chase Sapphire Reserve®’s emergency medical and dental benefit offers up to $2,500 in coverage, though this could prove inadequate if you don’t have other insurance. This coverage only applies as excess above other insurance you may have (e.g. through a separate travel insurance policy).
Even if you have the Chase Sapphire Reserve®, you may still want to purchase private travel insurance that covers medical expenses. These policies are typically much more robust than anything available through your credit card, with higher limits on the costs the insurance will pay and a broader range of conditions covered.
What Is Liability Coverage?
If you’re judged to be at fault for an accident, you could be responsible for medical expenses for your own passengers, passengers in another vehicle, damage to other vehicles and property damage. We are unaware of any credit cards offering liability coverage for rental cars. You may have access to liability coverage through the rental car company or through your home auto insurance policy.
Most rental car companies offer the ability to purchase add-on liability coverage, charged at a daily rate. This can be an expensive proposition, as coverage can cost on average $8 to $20 per day. It’s worth considering carefully whether you need this coverage.
In most of Europe, liability coverage is required by law to be included in the rental price. This coverage is typically adequate to cover the damage caused in an accident.
In Mexico, liability coverage is also required to be included in the price of the rental, but with a maximum limit of $50,000 pesos (around $2,700 USD) in property coverage and $100,000 pesos (around $5,300 USD) in personal injury protection. This coverage could prove inadequate, so it’s worth considering upgrading.
If you have your own auto insurance, it may also extend to liability when driving a rental car in the United States. Typically, this coverage doesn’t extend internationally. It’s worth checking with your insurance agent before you leave for your trip, as your credit card won’t provide protection against liability charges.
What Is Personal Effects Coverage?
Personal effects coverage provides insurance if your laptop, luggage, phone or anything else of value is stolen from your car. Some credit cards offer protection for specific items, such as cellphone protection, but personal effects coverage will encapsulate everything in your rental car, which may include items not normally insured. It’s worth checking your homeowner’s or renter’s insurance policies first, as they often protect against theft of belongings, even outside your home.
Primary vs Secondary Coverage: What’s the Difference?
Rental car coverage can be either primary or secondary. Secondary coverage requires you to exhaust all other insurance options before making a claim. This could include your personal auto policy, any travel insurance you may have or the insurance you purchased from the rental car company. Primary coverage doesn’t have this requirement.
Most rental car insurance offered through credit cards is secondary, though some premium credit cards offer primary coverage in certain situations. This is more valuable, allowing you to file a claim through your card immediately without involving your personal insurance.
Does My Credit Card Cover Rental Car Insurance?
Premium and travel-focused credit cards typically offer some rental car coverage.
Requirements
Using your credit card’s CDW typically has several requirements:
- Paying for your reservation in full with the card.
- Renting an eligible vehicle. Most credit cards exclude vehicles designed for commercial purposes, motorcycles, and luxury and exotic vehicles. Notably, Teslas may also be excluded.
- Declining the rental car company’s CDW at the counter. Accepting coverage through the rental company will typically nullify any coverage you might have available through your card.
- Specific countries may be excluded.
Because the CDW is a profitable add-on for the rental car company, they often aggressively pitch this product to you. At the counter, you should understand your card’s coverage and stand firm to avoid getting ripped off.
How To Check if Your Card Offers Rental Car Insurance
Your card’s benefit guide is the best place to check the details of what rental car coverage is offered. This guide was likely mailed to you when you first got the card, but should also be available online if you’ve misplaced the original copy.
How To Apply for Credit Cards With Rental Insurance
Many credit cards with travel insurance coverage provide collision damage waiver protection. Consider our best options for your next rental below.
Chase Sapphire Reserve
The Chase Sapphire Reserve® provides some of the strongest travel insurance benefits of any credit card. Its collision damage waiver is primary coverage, meaning you can file a claim directly without first exhausting other courage options.
When you pay for your rental car with your Sapphire Reserve and decline the rental company’s collision damage waiver, you’re covered for any damage to the rental car up to $75,000, worldwide.
Certain types of vehicles are not covered, including large trucks (pick-ups are covered), cargo vans, and vehicles that seat more than nine people including the driver. These exclusions will apply to relatively few people. With the Sapphire Reserve, you can be comfortable that most rental cars will be fully covered in the event of an accident.
Chase Sapphire Preferred
The Chase Sapphire Preferred® Card generally offers the same coverage as the Sapphire Reserve, with some additional exclusions and restrictions. Like its big brother, it provides valuable primary coverage.
With the Sapphire Preferred, the maximum benefit is limited to the actual cash value of the rental car, and certain brands of electric, exotic or luxury cards aren’t covered. This is still more than adequate coverage for your vacation car rental.
With a low annual fee of $95, it’s one of the least expensive consumer cards to provide primary coverage for rental cars.
If you don’t currently have a card that provides coverage for rental cars, the Chase Sapphire Preferred® Card could be your best choice for coverage. Depending on the rental agency, it could pay for its annual fee with just a week-long rental.
Capital One Venture X
Like the Chase cards, the Capital One Venture X Rewards Credit Card provides primary coverage¹ for your next car rental. Like the Sapphire Reserve, it is a Visa Infinite card and provides similar coverage. The maximum limit is $75,000 and exotic cars, motorcycles and commercial vehicles are not covered. It specifically lists Jamaica, Northern Ireland, The Republic of Ireland and Israel as the destinations where coverage doesn’t apply.
Bilt Rewards Card
For a no annual fee option, consider the Bilt World Elite Mastercard®. This card offers primary insurance and above-average rewards on travel, making it a potentially viable option for those looking to travel on a budget.
Find The Best Credit Cards For Car Rental Insurance Of 2024
Bottom Line
Premium cards offer some of the best insurance coverage when renting a car. The Chase Sapphire Preferred® Card is one of the most cost-effective options with an annual fee of only $95, while the Chase Sapphire Reserve® and Capital One Venture X Rewards Credit Card provide some of the strongest coverage available through a credit card. If you damage your rental car, your card could provide thousands of dollars in benefits.
¹For Capital One products listed on this page, some of the above benefits are provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply.
