Exploring the Benefits of Credit Card Rental Car Insurance
6 Min Read | Last updated: January 19, 2024
This article contains general information and is not intended to provide information that is specific to American Express products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.
Credit card rental car insurance can help you cover costs in the event your rental car is damaged or stolen. Learn about coverage benefits and how they can protect you during your travels.
At-A-Glance
- Credit card rental car insurance is a popular credit card perk, so accepting a rental car agency’s insurance coverage may be an unnecessary expense for many people.
- Before you rent a car, it’s important to understand how your credit card rental insurance works and what it covers. This can help you decide whether you need to buy the coverage offered by the rental agency.
You’re standing at the rental car counter, credit card in hand, ready to pick up your ride and go. But before they hand you the keys, you might find yourself facing a question you’re not sure how to answer: Should you opt in for the insurance coverage for an added fee?
Insurance is important because you never know what might happen. For many people, though, accepting the rental car agency’s coverage may not be worth the extra cost – especially if you already have car insurance that may extend to cover rental vehicles. But that’s not all: Your credit card might include rental car insurance, which can come in handy regardless of whether you have a primary insurance policy.1,2
What Is Credit Card Car Rental Insurance?
Many credit cards come with car rental insurance, also known as car rental loss and damage insurance.1,2 Credit card car rental insurance is a perk that provides insurance coverage for the card member – and typically passengers and other drivers authorized by the rental contract – if they use that credit card to pay for the rental car.1
Credit card car rental coverage can be valuable and could help provide coverage for many of life’s unexpected events. That’s why it’s important to know how your credit card car rental insurance works, what it covers, and how to use it so you can be sure you’re covered if an incident occurs.
How Does Credit Card Car Rental Insurance Work?
If your credit card offers car rental insurance, it usually kicks in automatically when you pay for your rental car with that credit card – so you’ll probably have to pay with that card to get the insurance.1 You’ll also have to decline the rental car agency’s offered coverage for the credit card’s insurance to take effect.1,3 Beyond that, exactly how your credit card car rental insurance works can depend on whether your card offers primary or secondary coverage:2,4,5
- Primary coverage: This type of coverage pays for claims before your personal car insurance kicks in. This means you can avoid paying your deductible and possibly prevent any premium increase due to accidents or damages.
- Secondary coverage: This coverage won’t go into effect until your personal auto insurance first pays for the damages.2 Then, your credit card rental car coverage will reimburse your deductible and possibly other costs not covered by your personal policy.2 It’s more common for credit cards to offer secondary coverage than primary.4
But what if you don’t own a car and therefore don’t have a personal car insurance policy? You might actually benefit from your credit card rental car coverage even more because it may cover more than the coverage offered by the rental agency if the credit card offers primary insurance coverage.2,5 This will depend on your card issuer and the type of rental car insurance that they offer, so you’ll want to review the terms and conditions carefully before you set out, so you’re clear on what type of coverage you have.2
What Does Credit Card Car Rental Insurance Cover?
Credit card rental insurance may cover damage and theft.3 Otherwise, coverage will depend on the credit card and card issuer.2 For example, some cards might offer coverage for damaged or stolen personal items. Others may not. In addition, your credit card insurance might not cover loss-of-use fees – the costs a rental agency might charge you to cover lost business while the car is being repaired.
Other factors that can affect your credit card rental car insurance include:
- Type of vehicle: Exotic cars, antique cars, cargo vans, or limos might not have the same coverage as an economy car or a standard SUV.5
- Location: Depending on the card issuer, coverage might be excluded in some countries.3
- Rental duration: Coverage may only last for a certain amount of time, usually anywhere between two weeks and a month, depending on the card.3
Check with your card issuer to learn what is and isn’t covered by your credit card. The details are likely listed in the benefits paperwork you received in the mail with your card, but you can also check your account information online or call your card issuer.
How to File a Claim
If damage to the car does occur, you’ll have to file a claim. It’s a good idea to first contact your card issuer to find out what you’ll need to do. Examples of documentation you may need to provide your card issuer include the following:
- A copy of the damage report from the rental company.
- Photographs taken by the rental agency.
- The repair estimate.
- A copy of the rental agreement.
If the damage is due to another car or person’s property, or if the car was stolen, you’ll likely need to include a copy of the police report, too.
Your card issuer will be able to inform you of what documentation they require when making a claim.
Do I Need to Buy Additional Insurance When Renting a Car?
It depends. If you don’t have a personal auto insurance policy that covers rental vehicles and your credit card doesn’t offer rental car insurance, it may be a good idea to buy the insurance offered by the rental agency.1 Accidents can happen, and it’s always good to be prepared for whatever can come your way – whether it’s a dinged door in a parking lot or a collision.
Check with your insurance company and credit card issuer to find out whether you’ll have full coverage if damage or theft occurs.
Frequently Asked Questions
To find out if your credit card offers car rental insurance, review the terms of the card.2 Read through the benefits paperwork that you received from the card issuer. You could also check your online account or contact your credit card issuer online or over the phone.
If you don’t have personal auto insurance, but you do have rental car insurance coverage from your credit card, it’s likely that it would kick in, in the event of an incident. You’ll want to check with your credit card issuer first to see if you have coverage and, if so, what terms and conditions apply.2 If you do have car insurance through your credit card issuer, it’s likely that it will only apply if you pay for the rental car using that credit card.1
What’s covered and what’s not covered under your credit card rental car insurance will depend on your credit card issuer.2 Examples of incidents that are unlikely to be covered include personal injury and property damage that you cause in an accident, loss or theft of personal belongings, mechanical breakdowns, and wear and tear.3 Other limitations may apply as well.
As the name implies, a primary insurance policy is the one that kicks in first. If your credit card rental car insurance offers primary coverage, you’ll file a claim directly with the card issuer before filing a claim through any other insurance policies. This could help you avoid paying your standard out-of-pocket deductible. Secondary coverage will only begin to provide coverage if the primary policy has been depleted and may still have limitations.2,6
The Takeaway
For some people, it’s not worth buying the damage and theft coverage offered by rental car agencies. Since your personal auto insurance policy might cover rental cars, and the credit card you used to pay for the rental might have coverage, too, additional coverage could be redundant. If you don’t have either – or if you expect to incur out-of-pocket costs in the event an incident occurs – paying for the coverage provided by the rental car agency may be worth the added peace of mind.
1 “Renting a Car,” Federal Trade Commission
2 “Rental car insurance,” Insurance Information Institute
3 “How Does Credit Card Rental Car Insurance Work?,” Experian
4 “Things to Know About Car Insurance and Rental Cars Before Starting Your Road Trip,” District of Columbia Department of Insurance, Securities & Banking
5 “Do you need proof of insurance to rent a car?,” AutoInsurance.org
6 “Do I Need Car Insurance to Rent a Car?,” Experian
Megan Doyle is a business technology writer and researcher whose work focuses on financial services and cross-cultural diversity and inclusion.
All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
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