Best Credit Cards For Rental Car Insurance Coverage in 2023
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Every time that you visit a rental car counter, you can be sure that the representative will ask you if you’d like to purchase the optional rental car insurance. And if you don’t agree, you’ll often receive a hard sell to get you to agree to pay for optional loss and damage coverage that can add up to as much as $30 per day. This is the equivalent of paying as much as $10,950 per year, for car insurance, and the employee that you’re speaking with will likely receive a commission for each sale made.
But if you have the right credit card, then you can confidently decline many or all of these policies, knowing that you’ll be protected if your car is damaged or stolen. That’s because several credit cards, including the popular Chase Sapphire Reserve® and Chase Sapphire Preferred® Card, include coverage against theft or damage when you use the card to pay for your rental. This coverage is commonly called a Loss Damage Waiver policy.
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What is a Loss Damage Waiver offered by credit cards?
A Loss Damage Waiver is a policy offered by some credit cards that will cover any liability you’ve incurred related to the value of the vehicle that you rented. If the vehicle is stolen or has been in an accident, then this benefit can be paid to the rental car company, so that you won’t have to pay for the loss or damage out of your pocket.
However, when you’ve been in an accident, there are several kinds of losses that you could be responsible for. If you’re at fault, you could be found liable for damage to another person’s property or vehicle. You could also be liable for any injuries you’ve caused. A credit card’s Loss Damage Waiver will only cover the value of any damage to the vehicle you rented. It will not cover damage to other vehicles or any injuries suffered by yourself, other occupants of your vehicle, occupants of other vehicles, or any pedestrians injured in a car accident. However, your personal automobile insurance policy may cover these losses.
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What’s the difference between a primary and a secondary Loss Damage Waiver?
Once you understand how a credit card’s loss damage waiver works, it’s important to know the difference between primary and secondary coverage. Most credit cards that offer rental car Loss Damage Waiver policies offer secondary coverage. In the event of theft or damage to your rental car, secondary coverage will only apply to any remaining losses not covered by the renter’s personal automobile insurance, if any.
For example, if your rental car is stolen, you would have to file a claim with your personal automobile insurance company, but your credit card’s secondary Loss Damage Waiver would cover the deductible or any other part of the loss not covered by your primary insurance. But if you used a credit card with primary rental car Loss Damage Waiver coverage, then you could immediately file a claim with the card’s policy, without even notifying your personal automobile insurance provider. Therefore, primary rental car Loss Damage Waiver coverage is better than secondary coverage.
If you don’t have a personal automobile insurance policy, or you have one that doesn’t offer rental car coverage, then all credit card’s Loss Damage Waiver policies will effectively become primary for your purposes. This will also be true if you were to rent a car outside of the United States, and your personal automobile insurance policy doesn’t offer coverage to cars rented in foreign countries.
How to activate your credit card’s rental car Loss Damage Waiver coverage
When your credit card includes Loss Damage Waiver coverage, there are several things that you need to do to activate it. First, you must pay for your rental with your eligible credit card. And while you can use coupons or other discounts to reduce the cost of your rental, the coverage typically won’t apply if you redeem reward points or miles for a free rental, even if you use your credit card to pay the taxes and fees on the rental. However, there are some credit card reward programs that will continue to offer you Loss Damage Waiver coverage when you redeem its points for car rentals.
You also have to decline the optional coverage offered by the car rental company. You may find that the easiest way to avoid their hard selling techniques is simply to use the word “decline,” rather than any other response such as “I don’t need it” or “no thank you.”
You must also rent the car from an eligible location. Several credit card Loss Damage Waiver policies don’t apply to rentals in some countries. For example, Visa’s coverage does not apply to rentals from such as Israel, Jamaica, and Ireland. There are also restrictions on the types of vehicles covered. Typically excluded are exotic and expensive cars, antiques, large trucks and vans, and cars rented from car-sharing services.
Keep in mind that coverage is not available for those who are using their vehicle for commercial purposes, violating a law, or breaking the terms of their rental car contract in any way. For example, nearly all rental car contracts prohibit the use of the vehicle on unpaved roads, so you wouldn’t be covered for any losses incurred while traveling on dirt or gravel roads, like those often found in national parks.
How to file a claim with your credit card’s Loss Damage Waiver coverage
If you’ve been in an accident, or your rental car has been stolen, then it’s important that you collect and retain as much documentation as possible. This includes your rental car agreement, a police report, photographs, and any repair estimates.
You then need to contact your credit card issuers’ benefits administrator. This information will be in your card’s Guide to Benefits or can be obtained from your card issuer’s customer service. Your rental car policy will specify how to file a claim and what documentation will need to be provided. You must also provide the documentation, and any follow-up information, within a time limit specified by the policy.
Credit cards that offer primary Loss Damage Waiver coverage
Currently, Chase and Capital One are the only issuers that offers primary Loss Damage Waiver coverage as a standard feature on some of its travel rewards cards.
|Capital One Venture X Rewards Credit Card||$395|
|Chase Sapphire Reserve®||$550|
|Chase Sapphire Preferred® Card||$95|
|United℠ Explorer Card||$0 for 12 months, then $95|
|United Club℠ Infinite Card||$525|
|Ink Business Unlimited® Credit Card||$0|
|Ink Business Cash® Credit Card||$0|
|Ink Business Preferred℠ Credit Card||$95|
|United℠ Business Card||$0 For 12 months, then $99|
American Express Primary Rental Car Insurance Information
Another card issuer that offers Primary Rental Car insurance is American Express. Its Premium Car Rental Protection policy is an optional add-on that offers primary coverage for $19.95 per $24.95 per rental period, not per day, and it goes far beyond any other card’s Loss Damage Waiver coverage.
This policy offers up to $100,000 of coverage to the rental vehicle, as well as up to $100,000 of accidental death or dismemberment coverage ($250,000 for California Residents). You also receive up to $15,000 for secondary medical expenses per person and up to $5,000 for secondary personal property coverage ($15,000 for Florida Residents). There is no deductible when you file a claim, and coverage is worldwide, except for vehicles rented in Australia, Ireland, Israel, Italy, Jamaica, and New Zealand.
To use this coverage, you can enroll in this plan using any American Express business or personal credit or charge card. Then, you are automatically billed for the coverage with each rental. Here are a few popular American Express cards that offer secondary coverage with the option to upgrade to primary coverage.
- The Platinum Card® from American Express – ($695 annual fee; see Rates & Fees)
- American Express® Gold Card – ($250 annual fee; see Rates & Fees)
Car Rental Loss and Damage Insurance can provide coverage up to $50,000 (for Amex Gold) and $75,000 (for Amex Platinum) for theft of or damage to most rental vehicles when you use your eligible Card to reserve and pay for the entire eligible vehicle rental and decline the collision damage waiver or similar option offered by the Commercial Car Rental Company. This product provides secondary coverage and does not include liability coverage. Not all vehicle types or rentals are covered. Geographic restrictions apply. 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. Car Rental Loss or Damage Coverage is offered through American Express Travel Related Services Company, Inc.
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For many travelers, this optional coverage represents a fantastic deal. And since the fee is charged just once per rental, the daily cost of the coverage declines when you have a longer rental. In fact, you can apply this coverage to rentals as long as 42 consecutive days (up to 30 consecutive days for Washington State residents).
Credit cards that provide secondary Loss Damage Waiver coverage
American Express. Most American Express credit cards come standard with secondary Loss Damage Waiver policies.
Bank of America. Its Premium Rewards card offers a secondary Loss Damage Waiver policy.
Capital One. The Capital One Venture Rewards Credit Card and the Capital One VentureOne Rewards Credit Cards both come with secondary Loss Damage Waiver coverage, so long as you’re approved for the Visa Signature version.
Chase. Some Chase cards include secondary Loss Damage Waiver coverage, other than the ones mentioned above that include primary coverage. Examples include the Chase Freedom Flex℠ and the Chase Freedom Unlimited®.
How to tell if your credit card offers rental car coverage
If your credit card isn’t listed above, it may still offer you rental car coverage. There are hundreds of credit card issuers nationwide, including regional banks and credit unions. While rental car Loss Damage Waiver coverage may be provided by the Visa Signature program or by the World Mastercard or World Elite Mastercard programs, having a card that participates in one of these programs is no guarantee of having coverage.
The best way to know if you have Loss Damage Waiver coverage, and what its limitations are, is to consult your card’s most recent Guide to Benefits. This is a small booklet that’s mailed with your credit card. If, like most people, you no longer have a copy of it, one may be available online. And you can always call your card issuer, ask about your benefits and request a new copy of this guide. The card issuer may even be able to provide you with a link to an electronic copy of this document online.
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Major destinations can also offer independent rental agencies unaffiliated with a national brand. It can be worth exploring these options if you’re on a shoestring budget or want to exhaust every opportunity.
The Vacationer’s Final Thoughts
From lounge access to concierge services, travel rewards credit cards can provide lots of benefits that are nice to have. But for travelers, a credit card’s Loss Damage Waiver policy may be one of the most valuable benefits offered. Once you understand exactly what this benefit is, and how it works, you can avoid paying for overpriced insurance from the car rental company, while limiting your risk of loss when renting a car. For further reading, see our guide on the best travel insurance for company recommendations and other tips on protecting your trip. Our best credit cards for travel insurance guide provides picks on the top cards offering the most comprehensive coverage. You should also see our guide detailing the best credit cards for rental cars to earn top points and elite status.
Editorial 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.
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