Renting a vehicle comes with the inherent risk of an accident. Car rental insurance, available at the rental counter, can help offset these fears by providing coverage in the event of an accident, vehicle theft, or another incident.
But there is another option: credit card rental insurance. Car rental companies offer four types of vehicle insurance: liability insurance, collision damage waiver, personal accident insurance, and personal effects insurance. Credit cards typically provide collision damage waivers when the cardholder uses their associated credit card to pay the costs of renting a car and waive the additional coverage at the rental counter.
BestCards outlines everything you need to know about credit card rental car insurance – and if it's worth it when you travel.
Credit card car rental insurance is one of the most underrated benefits of a travel credit card. As mentioned, the rental car insurance from your credit card typically covers collision damage. The Auto Rental Collision Damage Waiver (CDW) frequently seen with credit cards is the same thing as collision protection. This charge is usually the most expensive item when you can opt for additional coverage at the rental counter, so getting it with your credit card is a great feature.
Some of the other items covered through CDW with your credit card include:
Keep in mind that not all credit cards offer the same services with their CDW protection programs. Always consult your cardmember agreement and the guide to benefits, which is usually attached.
Car rental insurance through credit card networks doesn't cover all types of rental vehicles.
It's worth noting that some types of vans qualify for auto rental collision damage waiver. Vans are designed as small-group vehicles, seating up to nine (9) people, including the driver, and are covered by Visa.
Rentals in specific international locations might also be excluded. Both Mastercard and Visa, for example, do not cover vehicle rentals made in Ireland, Israel, or Jamaica. Similarly, American Express will not cover vehicle rentals in Australia, Italy, or New Zealand.
Car rental insurance through your credit card only covers collision damage and should not be considered a substitute for your primary coverage. Instead, Auto Rental Collision Damage Waiver should be considered secondary coverage, as it will not help with the following incidents, accidents, or costs:
Personal automobile insurance or other insurance that covers theft or damage, the collision damage waiver reimburses for:
So, how can you file a claim for an incident with your rental card? Typically, the process is as follows:
Filing a claim for rental damage varies based on the card issuer. Typically, you will need to provide specific information, which will include:
The time frame for filing a claim also varies based on the card type. Visa, for example, requires a claim to be submitted by either 15 days or 31 days after the incident (depending on the Visa product), and claim documentation must be submitted within 90 days. Visa also sets a claim limit of $50,000 on their credit cards.
Mastercard requires eligible cardholders to claim within 15 days of an accident and requires documentation within 180 days of the claim. American Express offers a 30-day window to make a claim and requires the same 180 days to submit claim documentation as Mastercard. Amex also offers extended rental car insurance for up to $24.95 per rental period, which is a great option for those planning on renting a car for a week or more.
Discover does not currently offer car rental insurance on its U.S. consumer or business credit cards.
Conclusion
The Auto Rental Collision Damage Waiver coverage offered by credit card issuers provides a convenient and potentially cost-saving option for individuals renting vehicles, as it can protect expenses related to collision damage and theft during the rental period. However, it is crucial for cardholders to thoroughly understand the specific terms, limitations, and exclusions associated with this benefit. While the coverage can mitigate the financial burden of repairing or replacing a rental car, it typically does not extend to personal injury or damage to other vehicles or property. Individuals should carefully review their credit card policy details and consider supplemental insurance options to ensure comprehensive protection while renting a vehicle.