Credit card rental car insurance: what's actually covered?
If you have a credit card, it may offer cover for rental vehicles. Understanding how this cover intersects with other rental insurance is important, so you get the right cover when hiring a car.
In our complete guide, we'll explore credit cards and their rental car insurance, including how it operates for when you travel.
How does credit card rental car insurance work?
Credit card rental car insurance usually functions as secondary insurance. That means before it kicks in, you generally need to file a claim with a primary insurer. In the case of credit card cover, your primary insurer is often your regular auto insurer.
Here's how using credit card insurance in the event of an accident may work:
- After an incident occurs, your rental car company charges you for the associated costs.
- Your primary cover, such as that offered by your auto insurer, kicks in. You can file a claim with them to cover the out-of-pocket costs you've incurred.
- You then file a claim with your credit card provider for further cover of costs that your primary insurer doesn't cover. This could include your remaining excess, charges that exceed your policy limit, or specific costs that your primary policy excludes, like "loss of use" fees.
This cover can be valuable, giving extra peace of mind when using a rental car. But as you can see from this breakdown, there's a lot of back-and-forth involved. Dealing with your rental car company, primary insurer, and then your credit card provider can be time-consuming, and it can leave you out-of-pocket for a long time. This can make actually using credit card rental car insurance a frustrating experience.
What's covered and what's not covered
Credit card rental car insurance typically covers a narrower range of situations than a dedicated rental car policy. Here's how the two compare:
| Credit card rental car insurance | RentalCover | |
|---|---|---|
| Car rental excess costs | ✓ | ✓ |
| Damage or theft | ✓ | ✓ |
| Administrative fees | Some cards | ✓ |
| Single vehicle accidents | Often excluded | ✓ |
| Multiple vehicle accidents | Often excluded | ✓ |
| Fire and theft | Often excluded | ✓ |
| Vandalism | Often excluded | ✓ |
| Towing | Often excluded | ✓ |
| Lockouts | Often excluded | ✓ |
| Keys | Often excluded | ✓ |
| Windscreens | Often excluded | ✓ |
| Headlights | Often excluded | ✓ |
Credit card exclusions vary by card network and issuing bank, so check your specific terms. Many of the gaps above can be filled with optional add-ons from your card issuer, at an extra cost.
How do I find out more about my credit card's insurance options?
Credit card rental car insurance varies significantly depending on factors like the card network and the issuing bank. Don't rely on credit card rental car insurance without first being fully aware of how it covers you.
The best way to do this is to contact your card issuer directly and ask about their cover. You might also be able to rely on resources like online guides.
Make sure to get the following key questions answered:
In the majority of cases, credit card rental car coverage is secondary. Some credit card networks, such as American Express, do offer primary coverage.
Don't assume your credit card rental cover is completely comprehensive. There are likely to be some significant exclusions you need to know about before you make any purchasing decisions.
Your credit card issuer should advise you on whether you should still buy insurance from your rental company. Outside of Canada and the United States, a basic level of coverage known as a Collision Damage Waiver (CDW) is usually built-in to the price of your rental vehicle.
Car rental companies often also offer policies known as Super Collision Damage Waivers (SCDWs). These policies are more comprehensive than CDWs from the same companies.
They can reduce your excess to zero and have a reduced number of exclusions. If you’re using credit card rental car insurance, your primary and secondary coverage might mean this cover isn't worth it for you.
You can also turn down this cover if you have purchased a RentalCover policy. Our policies are 50% cheaper than the rental companies while also offering more comprehensive cover†. Plus, there’s nothing for you to pay in the event of a claim.
Certain rental vehicles might not be covered by your credit card. You might also find that specific car rental companies are excluded from your credit card coverage.
Make sure you understand any limits on cover for car rental durations.
Credit card cover may exclude certain destinations, meaning you'll need to consider different options for cover. The type of cover you receive may also vary significantly depending on your destination of travel.
It’s important to understand what you need when it comes time to make a credit card rental car insurance claim. This will help you know what information you need to keep a record of in the event of an incident.
In the event of a claim, your card issuer might require:
- A copy of the rental company accident report.
- Your rental agreement.
- Your repair estimate.
- A police report if applicable, such as in cases of theft.
- Photographs of damage.
What are the alternatives to credit card rental car insurance?
If you don't have a credit card, or don't want to rely on yours for rental car insurance, here are the main alternatives. For more detail, see our complete insurance comparison.
Rental company insurance. Rental car companies generally include Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW) cover in the base price of a rental vehicle. This isn't an alternative to credit card insurance; it functions side-by-side with it. Rental companies also offer Super Collision Damage Waivers (SCDWs) or Super Loss Damage Waivers (SLDWs) for greater levels of cover. Credit card insurance often lets you decline this additional cover from your rental company, though in some cases the alternative from your card is worth considering against what's on offer.
Travel insurers. Your travel insurance policy might include a level of car insurance cover, for example covering your rental excess. These policies can have their own exclusions though, and are often capped at lower amounts than rental companies charge. They can also involve long waiting periods where you're out-of-pocket while a claim is processed.
RentalCover. For a more comprehensive approach, consider RentalCover. Our policies cover the common exclusions and optional add-ons you'll find with rental company and credit card cover, including single and multiple vehicle accidents, fire and theft, vandalism, towing, lockouts, keys, windscreens, and headlights.
Our cover is 50% cheaper than rental companies†, with no excess for you to pay when things go wrong. We also cover additional fees like towing or loss of use. We work directly with your rental car company to settle claims, so 98% of our claims are paid out within 3 days, in any currency, through an easy online process.
Frequently asked questions
Secondary rental car insurance refers to coverage that comes into effect after your "primary coverage". It provides additional cover on top of this primary coverage.
In the case of credit card rental car insurance, your primary insurance is generally your personal auto insurance. So, your credit card rental car insurance will come into effect after your primary insurance.
Yes, rental car insurance is often available from travel insurers. However, this cover can have many exclusions. Cover from travel insurers is also often capped at a much lower level than car rental companies charge for incidents.
Yes, credit card rental car insurance often covers additional drivers if they are listed as an authorised driver on your rental agreement.
The key difference between a Collision Damage Waiver (CDW) and a Loss Damage Waiver (LDW) is that a loss damage waiver will cover theft as well as damage to a vehicle. However, it's important to note that policies sold as CDWs often do include this theft insurance as well.
The process for filing a claim for credit card rental car insurance varies significantly from one card issuer to another. It will also be impacted by your primary insurance. Find out directly from your credit card company what process you need to follow, and how it involves your rental car company and primary insurer.
Often, you’ll be able to submit claims online. Keep in mind that you will often need to follow a specified timeline within which you must submit your claim with all relevant documentation.