Credit Card Rental Car Insurance: What You Need to Know

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Let’s say you’re picking up a rental car at the airport. As the clerk hands back your driver's license, they ask if you’d like to purchase supplemental insurance for $39.99 per day. 

You hesitate. Your credit card includes rental car insurance, doesn’t it? Isn’t it also kind of covered by your personal auto policy? You forgot to look it up before your trip. 

The clerk presses on, saying you could owe the entire value of the car ($35,000) without proper damage insurance. 

Luckily, you follow Erika — so you aren’t fooled by scare-based sales tactics! 

…

In truth, many credit cards offer free rental car insurance that could cover the entire value of the car, even if your personal auto insurance doesn’t.

But how does it all work? How do you know if your credit card will cover your rental car, and how does your personal insurance fit into all this? 

How Does Credit Card Rental Car Insurance Work? 

Credit card rental car insurance typically comes in the form of a “damage waiver.” 

To use Chase benefits as an example, a damage waiver covers things like: 

• Theft
• Damage
• Towing charges
• Loss of use (which covers the rental agency’s loss of income while their car is in the shop)
• Administrative fees imposed by the rental agency

To activate the benefit, all you have to do is book the rental car using the credit card that has the benefit attached and decline the rental agency’s damage waiver. 

Then, if you get into an accident, you’ll let the agency know, file a claim with your primary auto insurance first, and then another with your credit card company. Unless your credit card provides primary coverage, then you'll go straight to the credit card company. 

Primary vs. Secondary Car Rental Insurance

Credit card rental car insurance typically provides secondary coverage. This means that you must file a claim with your primary insurance first (in this case, your own auto insurance) and then file a claim with your secondary insurance to help cover whatever’s left. 

Here’s an example. 

Let’s say you rent a Toyota Camry and accidentally back into a wall, doing $3,000 in damage to the car. You let the car rental company know and they issue a demand letter for $3,000, so you file a claim with your personal auto insurer. 

Your collision coverage from Progressive has a $1,000 deductible, so Progressive pays just $2,000. Luckily you have a damage waiver from your credit card, so you file a claim with the credit card issuer and it pays the remaining $1,000. 

However, some credit cards actually offer primary rental car coverage. So you don't have to get your personal auto insurance policy involved at all. For example, both the Chase Sapphire Preferred® Card and the Chase Sapphire Reserve® offer primary rental car coverage.

What Does Rental Car Insurance From Your Credit Card Cover?

As mentioned, credit card rental car insurance (aka damage waiver) typically covers the following: 

• Theft
• Damage of any kind (weather-related, collisions, etc.)
• Towing
• Loss of use and administrative fees imposed by the rental agency

The length of time these benefits apply can vary between credit card providers. Capital One, for example, covers rental periods of up to 15 days within your own country of residence and 31 days outside of it. Chase covers up to 31 days for both. 

Lastly, keep in mind that your personal auto insurance covers most rental cars and will always kick in first. As a secondary form of insurance, your credit card rental car insurance will help to cover whatever’s left. 

What Rental Car Insurance From Your Credit Card Doesn’t Cover

Credit card rental car insurance only covers costs associated with repairing or replacing the rental car itself. 

That means it doesn’t cover: 

• Personal liability, such as damages or injuries you cause while driving a rental vehicle
• Any injuries to you or your passengers
• Loss or theft of personal belongings
• Expenses covered by personal insurance
• Regular wear and tear
• Mechanical breakdowns
• Damage due to racing/off-roading
• Leases or mini-leases
• Vehicles that are not rented from a rental agency (e.g. Turo vehicles)
• RVs, buses, or vehicles with more than nine seats

In addition, credit card providers limit their total liability so they’re not paying to replace a McLaren every other day. 

Capital One will not cover vehicles with a retail price above $75,000 or “antique cars” more than 20 years old. 

American Express will cover most cars, but will only pay out up to $75,000.* 

Chase will not cover vehicles from Alfa Romeo, Aston Martin, Bentley, Corvette, Ferrari, Jaguar, Lamborghini, Lotus, Maserati, Maybach, McLaren, Porsche, Rolls Royce and Tesla. It says it will cover “select” models from Audi, BMW, Mercedes-Benz, Cadillac, Infiniti, Land Rover, Lexus, Lincoln and Range Rover. 

Best Credit Cards With Rental Car Insurance

Complimentary rental car insurance is one of many insurance benefits offered by travel rewards cards like the Chase Sapphire Preferred and the Capital One Venture X. 

However, unlike trip interruption insurance, you can find rental car insurance on many no-fee rewards cards as well, like the Chase Freedom Flex and the Blue Cash Everyday Card by American Express.* 

Here are some of the top cards that offer complimentary rental car insurance: 

• Chase Sapphire Reserve®
• Chase Sapphire Preferred® Card
• Chase Freedom Flex® (no annual fee)
• Capital One Venture X Rewards Credit Card
• Capital One Venture Rewards Credit Card
• Capital One VentureOne Rewards Credit Card(no annual fee)
• The Platinum Card® from American Express
• American Express® Gold Card
• Blue Cash Everyday® Card from American Express (no annual fee)

Keep in mind that even if your credit card offers rental car insurance, it may not always apply. As shown above, there’s a long list of exclusions, so it’s worth checking your guide to benefits — or even calling up your Benefits Administrator — to double-check whether your future rental will be covered. 

If it isn’t, your regular auto insurance may still cover most scenarios if you have both collision and comprehensive coverage on your policy. If you only have one — or your deductibles are really high — having backup rental car insurance could well be worth it. 

Related: Flight Delay Compensation

Does Credit Card Rental Car Insurance Cover Turo? 

Short answer? No. 

For the unfamiliar, Turo is like the AirBnB for cars. It allows you to rent other people’s personal vehicles, which are often cheaper and/or much more interesting than what you’d find at the airport rental center. I’ve personally rented a Porsche just for fun and a Mustang convertible in Hawaii for less than half of what Enterprise wanted. 

Still, one of the biggest hidden drawbacks of Turo is that your credit card rental insurance typically doesn’t apply. As Turo explains, “It’s very unlikely that your credit card company provides coverage for damage to a car booked through Turo.”

That’s because Turo is a peer-to-peer platform and not a rental agency. In a broad sense, both your credit card provider and your insurance view it as borrowing a car from a friend. Your personal insurance might cover a Turo rental, but your credit card benefits won’t. 

Thankfully, the app does let you purchase supplemental insurance if you need it. 

How To Activate Your Credit Card Rental Car Insurance

Activating your credit card rental car insurance is easy, although some folks miss Step 2: 

1. Pay for the rental in full using a credit card with an auto rental damage waiver listed as a benefit. 
2. DECLINE any optional damage liability protection offered by your rental car agency. 

Declining the agency coverage is key. Most credit card companies will cancel your damage waiver if you purchase one somewhere else. 

Now, sometimes a rental car agency will insist that your credit card benefits are no good and that you need to purchase their damage waiver instead. This isn’t always just a cheap sales tactic — they could actually be telling the truth (such as if you’re renting an Alfa Romeo with a Chase card). 

For help in this awkward scenario, it’s best to just call your credit card company and have them sort it out. 

Chase advises customers, “If the rental company insists that you purchase their insurance or collision damage waiver, call the Benefit Administrator for assistance.” 

Related: Baggage Delay Insurance: How It Works

How To Make a Claim With Your Credit Card Rental Car Insurance

Your credit card’s guide to benefits (often searchable online) will spell out exactly how to file a claim. But here’s a broad overview of the typical steps involved: 

1. Take lots of photos of the damage and obtain a police report (if possible).
2. File accident reports with the rental car agency, your personal insurance, and your credit card Benefits Administrator (usually via a phone number listed in your guide to benefits). 
3. Get a copy of the demand letter from the rental car agency. 
4. File a claim with your personal insurance. 
5. If your personal insurance doesn’t cover 100% of the cost of the theft/damage, file a claim with your credit card benefits administrator. 

FAQs

How do I know if my credit card offers rental car coverage?

The quickest way is to look up the card online and review the sales page. The card benefits, including car insurance coverage, are typically made pretty clear. If you are having trouble finding it, look for a section called “travel benefits”, it's usually in there.

If you can't find it, try calling the credit card issuer and asking customer service.

How do I make sure that my rental car is covered?

If your credit card has rental car coverage all you need to do is use your credit card to pay for entire rental cost and decline the rental company's insurance.

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* Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by Amex Assurance Company.

Disclosure: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.