Primary Vs. Secondary Car Rental Insurance Coverage

Some flashy credit card travel benefits, like rewards points, are eagerly sought after by consumers of all stripes. Other perks go ignored until they are absolutely necessary. Not surprisingly, rental car insurance is at the top of this second list.

While it is increasingly common for travel rewards credit cards to offer a policy of some kind, customers may not always be certain what the coverage is good for. To further muddy the waters, card reviews and advertising generally label the insurance primary or secondary.

Before applying for a card, it’s worth knowing the differences between these, as they can be significant.

How Rental Car Insurance Works

Before diving into the differences between primary and secondary coverage, let’s take a brief look at rental car insurance in general. First—and perhaps most importantly—the renter must pay for the car with the credit card that offers the protection. The cardholder also must be the primary renter, though other drivers will also be covered provided they are on the rental contract. Finally, the terms usually require the renter to decline the car rental agency’s Collision Damage Waiver (CDW).

The CDW provides coverage for damage done to the car if there is an accident or theft during the rental and may also cover towing charges related to any covered damage. Using a clever tactic, rental companies frequently offer cheap sticker prices for their cars, since they can often make a pretty penny selling CDWs. These policies can cost anywhere from less than $10 to over $60 per day, depending on the agency and level of coverage. With robust insurance from your credit card, however, you can decline the CDW and feel confident that you are covered.

Liability Coverage

While insurance through a credit card might be able to replace the CDW, it does not provide any type of liability insurance. The CDW covers the driver’s car, not other cars or people—unless it specifically comes with third-party liability coverage. Thus, if you were to cause an accident that damaged another vehicle or injured its passengers, you would be personally liable, even with credit card coverage.

To have full liability protection, you’d need to purchase the rental company’s insurance at the counter (typically $8 to $20 per day), have coverage through your car insurance at home (usually only covers domestic rentals) or purchase a separate policy.

Some countries (e.g. Mexico and most of Europe) require liability insurance to be included in the rental price, so you don’t need to purchase it yourself. When booking, you may see this reflected in the base rate as “third party insurance.” Note that the maximum coverage offered by this included liability insurance can be low in some countries. For instance, in Mexico it may only cover around $17,000 in injuries and damages, but you can purchase supplemental liability insurance.

Read more: When Should You Buy a Collision Damage Waiver

The Difference Between Primary and Secondary Coverage

For starters, it’s worth mentioning that most credit cards offer secondary insurance for rental cars. This means that the card’s insurance will pay only the amount not covered by another policy the driver has. Therefore, you would have to file a claim with your other insurance first. As anyone who has dealt with insurance companies will know, this can be a time-consuming process.

On the other hand, with primary coverage from a credit card, personal car insurance is immaterial. As the name suggests, the primary insurance applies first, no matter what other coverage the renter has. Conveniently, this means you can start the process of submitting a claim by calling the number on the back of your card.

Why Primary Insurance Is Better

A card with primary coverage eliminates the need to file a claim with your personal car insurance, a process that would typically subject you to a deductible payment and monthly premium increase. Primary coverage is also more likely to have generous terms and cover the full cost of the car. In contrast, secondary policies sometimes have lower limits for total coverage, lower duration of rental allowed and fewer countries in which rentals are covered.

Cards That Provide Primary Coverage

Having established the value of primary car rental insurance, which credit cards offer it? As the list indicates, premium cards are your best bet.

Chase

Chase provides primary rental car coverage on the following cards:

• Chase Sapphire Reserve®*
• Chase Sapphire Preferred® Card*
• United℠ Explorer Card
• United Club℠ Infinite Card

The Chase small business cards below also provide primary coverage, but only when the rental is for business purposes:

• Ink Business Preferred® Credit Card
• Ink Business Unlimited® Credit Card
• Ink Business Cash® Credit Card
• United℠ Business Card

U.S. Bank

• U.S. Bank Altitude® Reserve Visa Infinite® Card*

UBS

• UBS Visa Infinite Credit Card*

Capital One

• Capital One Venture X Rewards Credit Card

American Express

American Express cards don’t include complimentary primary coverage, but cardholders have the option to purchase it for an additional fee of $12.25 to $24.95 per rental. This can be done on the American Express website. Many American Express cards do offer secondary car rental coverage.¹

As you may suspect, because the policy comes at a cost, the terms are even more generous than those for the insurance offered by the cards from other issuers listed above. For example, the American Express program includes coverage for $15,000 of medical expenses for you and your passengers on a secondary basis (after any other medical or travel insurance) and offers coverage on rentals of up to 42 days, which is longer than most other cards. Even though this may be better than the terms for some other cards, note that liability coverage is still not included.

Other Options for Primary Insurance

While we’re big proponents of utilizing the insurance you can get for no additional cost through your credit card, you can also purchase primary car rental insurance through companies such as Allianz, Bonzah and others.

Where You Rent Might Matter

Some cards provide secondary coverage in the driver’s country of residence (where you might be covered by your regular auto policy) and primary coverage abroad. As a general rule, secondary coverage abroad will effectively act as primary coverage, since most personal car insurance policies will not be applicable outside the U.S. Similarly, if you don’t own a car and therefore don’t have car insurance, even secondary coverage will essentially act as primary coverage in the U.S.

While renting a normal sedan in most countries will be covered by a credit card insurance policy, there are notable exclusions—typically expensive or exotic cars, vans with a capacity of over eight people and antique cars. Your policy may also not be valid in certain countries (Jamaica, Ireland, Italy, Australia and New Zealand to name a few), although Chase cards now offer worldwide coverage. Rental duration may be a factor as well; rentals longer than two to four weeks may not be covered. As always, check your card’s terms and conditions for the precise stipulations.

Bottom Line

Primary rental car insurance is a valuable benefit offered mostly by top-tier cards. It can provide peace of mind when declining the rental company’s coverage and save quite a bit of money. It will make life easier by eliminating the need to file claims elsewhere if you do ever need to file a claim. This is especially beneficial in the event of an accident that damages the car, since it won’t cause a rate increase on your normal auto policy. However, as mentioned above, it is not a substitute for liability coverage.

If you enjoy the freedom of having a car when traveling, the insurance provided by your credit card can provide fantastic value. Be sure to investigate these benefits before applying for a card or heading to the rental counter.

For 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.
¹Eligibility and Benefit level varies by Card. Terms, Conditions and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company. Car Rental Loss or Damage Coverage is offered through American Express Travel Related Services Company, Inc.