Rental Car Insurance: Making Use of Credit Card Benefits

credit card rental car insurance

You may not know this, but your credit card provides a lot of additional services in addition to letting you postpone payment on purchases and earn cash back or frequent flyer miles. One of these services is rental car collision insurance. Car rental companies will always try to sell you insurance options that can add an extra $30 a day or more to the cost of your rental, but most people don’t need to buy this coverage. If you’re worried about the liability you take on when you’re driving a rental car, read on to learn the important details of the rental car insurance you are eligible for when you pay for a rental car with your credit card.

Discover’s travel protection program includes $25,000 in car rental insurance. According to their terms and conditions, if you rent a car for 31 consecutive days or less with your card, pay for the entire rental with your card, and decline the rental car company’s loss/damage waiver, you are eligible for the $25,000 in car rental insurance. This insurance applies to collisions only. You must first use your own insurance to cover the accident, and then this secondary coverage kicks in. You probably won’t be surprised to learn that Discover’s insurance does not cover personal injury (which can very quickly exceed $25,000) or personal liability (which is why it’s great to have an umbrella policy), but you may be unpleasantly surprised to learn that this insurance does not cover damage to other vehicles or property — it only covers damage to the car you have rented. You also must have rented the vehicle in the United States or Canada (and driven within the area allowed by the rental agreement) and it must be a basic vehicle — no trucks, no antiques, and no high value vehicles are eligible for coverage. If the accident is a result of your being drunk or high, don’t expect any coverage, and if you’re the only person listed on the rental agreement but your friend drives the car, once again, you’re not covered. Impressively, the policy covers your deductible from your primary insurance — so if you have a $1000 deductible through your policy with State Farm and you get into an accident, you won’t be responsible for the first $1,000 worth of damage, Discover will. Discover’s policy does not explain whether they will cover you if you do not have your own primary auto insurance, and I was unable to get a response from them on this matter. Discover’s insurance coverage is provided by a company called Chubb.

Mastercard’s MasterRental program only covers your car if you rent it for 15 consecutive days or less, which is still sufficient to cover most people’s vacation rentals, but may not be adequate if you’re renting for other reasons (say, because your own car was totaled in an accident). Again, you’ll need to pay for the entire rental with your Mastercard and decline the coverage offered by the rental car company. The vehicle must have an MSRP of less than $50,000 and must not be a truck, pickup, sport utility truck, full size van on a truck chassis, camper, antique, offroad vehicle, or other recreational vehicle. MasterRental will cover physical damage to or theft of the vehicle, towing if your vehicle is in a collision, and reasonable loss of use. Again, they expect your primary insurance to pay first, but they will cover your deductible. If you have no other insurance (for example, because you don’t own a car), MasterRental will act as your primary form of insurance. So even if you don’t have your own insurance, you don’t need to buy the rental car company’s collision insurance if you’re paying with your Mastercard. Keep in mind that Mastercard’s insurance does not cover personal injury, personal liability, personal property, medical payments to others, or damage to other vehicles. Unlike Discover, Mastercard’s coverage extends to most of the world, with a few exceptions. Overall, it seems to be a more comprehensive policy.

American Express explains their policy fairly clearly on their website, but the kind of coverage you get depends on which American Express card you have (i.e. Green, Platinum, Blue, etc.).
You can read about Visa’s coverage here. Since most policies are fairly similar overall, I won’t get into an analysis of each major companies policies.

It’s important to note that all of these policies have more fine print than I’ve been able to outline here, and the policies vary slightly from company to company. You can use for further explanations, policy comparison and some handy quick facts of the coverages. The overall gist is similar, though: if you’re renting an ordinary vehicle for an ordinary purpose and pay for it with your credit card, you’ll probably get collision coverage automatically, which means that you can save a good chunk of change by not buying the rental car company’s collision damage waiver insurance. Whether you will need the other types of insurance offered (which may include personal accident insurance and supplemental liability insurance) depends on what kind of coverage you already have through your regular car insurance policy or lack thereof. If you have any concerns or unusual circumstances regarding your car rental, read the fine print or call the credit card company with your questions before you rent (and take notes, including the name of the customer service rep). It can be a challenge to track down these policies online, but if you contact your credit card company, they should be able to mail you a copy of the policy.

Car accidents can be very expensive, so it’s important to know what you’re getting into and make sure you’re protected before you rent.

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33 Responses to Rental Car Insurance: Making Use of Credit Card Benefits

  1. Debbie says:

    Thanks! That’s very interesting.

    Has anyone reading this ever collected on this kind of insurance before?

  2. Virdi says:

    How hard is it to claim it?

  3. Sandra Houston says:

    I need to know if this applies for Visa and MAster Cards in the UK as well.
    Thank you.

  4. pfadvice says:

    I need to know if this applies for Visa and MAster Cards in the UK as well.

    You need to contact the company to find out the exact benefits they provide.

  5. Paul says:

    I ended up with a cracked windshield once when a rock hit my rental car. I had American Express’s insurance (I don’t own a car), and once I had given them all the info by phone, they dealt with it entirely, and I didn’t owe a thing, or have to spend hours on the phone sorting it out.
    The only downside was that Dollar Rent a Car charged Amex’s insurance for a bunch of nonexistent damage to other parts of the car (why are all rental car companies so notoriously devious?), probably to boost their claim amount. But since Amex paid it, it wasn’t really my problem.

  6. Ade Pater says:

    I always buy the Diner’s Club card. It does cost $90 a year, but offers primary cdw and I collected 3600 dollars worth of damage. I never heard from my insurance company, and they never found out.

  7. John says:

    I submitted a claim for vandalism of my rental car and have not heard a peep from the Master Card Assistance Center to date; it has been three months since my submittal of the required documentation. I am still getting the run around from the Master Card Assistance Center. They make it very difficult to collect on a claim even thought it is limited to the first five hundred dollars of your primary insurer’s deductible. I don’t think it is a good idea to depend on Master Card for the supplemental insurance. I have heard good things about the AMEX program.

  8. martin says:

    Does MasterRental cover when you have applied a coupong with your reservation? some credit cards do not, that’s what I have heard.

  9. Harry says:

    Just to give you som 411, just because your credit card company claim they will protect a car rental you need to know to what extent. Most credit card companies do not cover florida anymore and are verging to it since florida change their NO FAULT LAW again. Alot of Credit Cards wont cover up to a certain vehicle and on top of that chances are they will no cover you from loss of use (Thats what rental company charges when the car is in the Body shop, since the rental company cannot rent it while in the shop the customer who damage the car will pay for the down time per day. ohh an also they will no pay the depreciation value. so use your credit card or insurance company all you want but no matter how it goes if you crash the car the requires it to go to the body shop or you hit some one else chances are you will still have to take money out of your pocket. this a car/suv not a toy so these rental company will find away to get their money. thats some saving advice for you

  10. jojo says:

    Can MasterRental verify whether a driver has primary personal car insurance?

  11. pfadvice says:

    I’m not sure, but I would contact your insurer even if they say they can. You want to get the infor from the horses mouth, not through a third barty.

  12. jojo says:

    What if you are unsure if your insurance will apply and to avoid being wrong you report that you have no primary so that this becomes primary?

  13. Sam says:

    Extremely helpful information. Our cars are older and we no longer carry collision/coprehensive coverage. I always feel uncertain about declining the rental company’s waiver and was hoping to learn the ins and outs of this type of “insurance.”

    Your research is much appreciated.

  14. Joseph says:

    I recently was awarded a claim using MasterCard for a rental in the UK. My personal insurance does not apply outside the US, so MasterCard was primary. Everything is finished now two months after the accident. MC covered all the charges except tax on the repair and administrative fees.

    My rental company in the UK was very cooperative, and the MC assistance folks were equally helpful.

  15. Brad says:

    I have an Amex Platinum Card. Their website is a joke because it doesn’t address real questions like: I know it is in excess of your own coverage, but, what if I don’t have collision coverage or better than that: I don’t own a car. Does Amex’s rental car program kick in primary? How about “loss of use” charges? How about towing? Amex refused to put in writing answers so I could stick it in rental car company faces. I found an old website of theirs I copied with the line about being covered: “in excess of your own coverage OR IF NOT COVERED”.

  16. Jumaa Al Muahiri says:

    Hello all, I have read this article today and I believe the only American Express does the Insurance.

    My Q. is this eligible to all credit cards (visa & master) and regardless of the issuers.

    Because my credit cards I have issued from oversea. And I am going to use them in USA for car rental.

    Please help me with good answer


    Jumaa Al Muhairi

  17. pfadvice says:

    You need to call your credit card company and ask.

  18. Brad says:

    AMEX stinks. Their sites don’t address down time, if you don’t even own a car: does that mean the card becomes primary. I had the lady at Amex on the phone just scream “what’s your deductible?” 10 times. “I don’t have one” was my answer 10 times. They stink. $450 a year Platinum Card and I get nothing.

  19. Ben Havumaki says:

    Very comprehensive coverage of credit card coverage. Helped me on my way.

  20. Mark says:

    I don’t own a car and have no car insurance. Is there a credit card that will cover personal injury, personal liability, personal property, medical payments to others, or damage to other vehicles, when I’m on a business trip? I own a small business.

  21. pfadvice says:

    You would need to contact the credit card company directly and see if they offer this – it’s not something you want to assume is ok unless you have it in writing in front of you.

  22. Marty says:

    Very useful info. Thank you.

    I spent the last hour researching all companies (Amex, Visa, MC, Discover) and all exclude Israel (usually Australia and other countries in the same sentence).

  23. John Weaver says:

    I had damages charged to my AMEX card- had their rental car insurance. I paid the $1,600 charged to my card and am still waiting 18 months later to be reimbursed. Would like to hear from others with same problem.

  24. Richard says:

    What about “loss of use” or “additional administration fees” the rental companies will add on due to loss of use of their vehicles?
    Is this fee covered by any of the credit card companies?

  25. Alphie Guess says:

    These responses are from 2007 so I will add to this gentleman’s response because he is spot on. I have worked for the industry for 10+ years and I will speak only for Texas. As he said earlier, it is a no-fault state so any and all damage is the responsibility of the driver of the vehicle. Amex and some of the other CC companies require a Police Report. In Dallas and surrounding areas, if you do not cause $1,000.00 worth of damage, the Police will not come. This is one way to get your claim denied and have to pay the full amount for the accident. Also, the rental cars are normally pre-sold so the depreciation amount could add up to the thousands. Most people are driving the vehicles that are not covered by these master agreements when they are on vacation. Always remember, the things that happen to a rental car must be repaired to gain the most dollars when they are sold. Small repairs like rock chips, scrapes on your car are things you would ignore. This will not be the case with the rental car companies.

  26. Alphie Guess says:

    Amex is a tricky one. They offer two different types of protection, the one that is included with the card and Premium Protection which is $24.99 per rental. I have been a member since 1998 and carry a Blue Card and Platinum Card. Their vagueness is due to the fact that they promote the inclusive coverage as the “Premium Protection” but it is not. If it were, then there would be no need to offer a secondary protection. The fine print is that they decline 66% of there claims. They are not an insurance company so they have a third party to render decisions. They do not cover Loss of Use, Diminish Value of the vehicle or administrative fees and the process is reimbursable. It can take up to 6 months to get your money back. Definitely, if you have insurance, check with your agents and weigh the pros and cons before you assume full resposiblity for an asset you do not own. Understand that by declining LDW or CDW you are assuming full responsibility for any and all damage to the rental car regardless to who did it.

  27. Alphie Guess says:

    That is frustrating but true. Again, Amex is not an Insurance Company, however, they, too, look to “reduce severity” just like one. What I mean is that they look for ways not to pay. If you read the fine print, there are several things you must have in order to get your claim accepted. Miss one and you are denied. Just imagine you have an accident, but it is less than $1000 in damage, you file with confidence to Amex and they decline you because you are missing the police report. Ultimate frustration and unnecessary loss of money, but most importantly loss of your time. It is invaluable and it may not even be your fault. We have over 700,000 people without insurance in Texas or they are underinsured which is just as bad. I have a saying, I only have two types of customers, those that wished they had and those that are glad they did.

  28. Alphie Guess says:

    Chubb is the only one because it is a umbrella policy.

  29. Alphie Guess says:

    The very first question is who did you rent from? The purpose for the LDW or CDW is NOT to have charges applied to your card unless somehow you voided out the coverages based on the rental policy. I would definitely take this to their corporate offices. As I said before, since the charges are reimbursable, this could tie up your money for a long time and mess up your credit balances. 18 months is the longest I have ever heard of a transaction like this not being resolved. Definitely don’t rent from them in the future.

  30. Alphie Guess says:

    Not unless you have Chubb. The cards fain complete protection because it could be in the thousands for repairs. They would not be profitable if they paid all the claims to the ccard company so they limit it to damage only, not Loss of Use, Administrative Costs or Diminished Value of the Vehicle. Again, these cars are typically sold and rental car companies make the bulk of their money from “flipping” the cars at the end of their fiscal year. No damage means a premium to their overall purchase of the auto from the automakers plus the rentals themselves so this is huge business. When you cause damage, it limits the amount of money they can earn on their return plus this info must be fully disclosed when it is sold even at the auction. Hope this helps.

  31. Gus says:

    Hello all,
    Looking for your best advices here. I just had a very bad collision accident to a rental car last month. I do have mastercard, however I didn’t use it to pay for the rent. Used a different card. My question is does anyone here know or think that I still can get collision coverage from my credit card. I do not have other car insurances and did refuse the collision waive damage by the time of the rent.


  32. Jeffrey Strain says:

    You need to see if the card you did use has the coverage. A card you didn’t use will not cover the damages.

  33. Gus says:

    Thanks Jeffrey. Very appreciated it 🙂
    The other card has not coverage I think, was a TCF debit/credit card.
    Anyone else has different opinion?

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