Credit card car rental insurance: How does it work

What are credit cards with rental car insurance for?

Credit card rental car insurance helps pay for damage to or theft of the rental vehicle due to a covered incident. It is mainly designed to protect the rental car itself, not to replace your full auto insurance policy. Many cards provide secondary coverage, while some premiumThe payment required for an insurance policy to remain in force. Auto insurance premiums are quoted for either 6-month or annual policy periods. cards offer primary protection.

But your credit card coverage may help pay for things such as towing fees and the cost of your deductible.

So if you get in an accident, and your auto insurance policy has collision coverage with a deductible of $1,000, your credit card might cover the deductible, while your auto insurer would foot the rest of the bill.

In some cases, credit cards may provide primary coverage. Diners Club offers primary coverage. American Express cardholders can upgrade to premium insurance protection. For a flat fee per rental, cardholders receive primary auto insurance coverage so they don't have to file a claimAn insurance claim is a request you make to your insurance company for coverage after your car is damaged or you have an accident. You can file a claim online, by phone, or in writing. with their insurer or pay deductibles.

What does credit card car rental insurance cover?

Credit card rental car insurance often covers collision damage, theft, towing, and certain rental company fees, such as loss-of-use charges. It generally does not cover liability, injuries or damage you cause to another person’s property. Coverage depends on the card, issuer, rental location, and vehicle type.

In most cases, credit card car insurance coverage does not provide liability protection. So, if you injure someone in an accident and they sue, your credit card auto insurance will not cover any damages you may be required to pay.

However, coverage varies from one card company to another, and even among different types of cards provided by a particular company. Some credit card companies spell out the specifics of their rental car coverage on their websites, while others provide only general information. So, it's crucial to call your credit card provider for details.

For example, the American Express premium plan provides:

$100,000 of primary damage and theft coverage
Up to $100,000 of accidental death and dismemberment coverage
Up to $15,000 per person in excess coverage for medical expenses
A maximum of $10,000 for personal property coverage

Some Visa cards cover damage, theft, and loss of use, and kick in as primary insurance if someone doesn't have auto insurance. But they exclude coverage for injuries, personal liability, and diminished value.

Coverage often depends on which bank issued the card and which specific card you have. Whether you plan to use your personal auto insurance policy or credit card insurance to cover a rental car, you should contact both your auto insurer and your credit card company, says Lynne McChristian, Florida representative for the Insurance Information Institute.

"You don't want to be at a rental car counter trying to figure out what coverage you have," she says.

What credit card rental car insurance does not cover

Credit card rental car insurance generally does not cover injuries, liability claims, personal belongings, or excluded vehicles or rentals that violate the card’s rules.

Credit card rental coverage generally does not pay for:

Injuries to you or your passengers
Injuries you cause to another driver, passenger, or pedestrian
Damage you cause to another person’s vehicle or property
Personal belongings stolen from the rental car
Certain luxury, exotic, or specialty vehicles
Some international rentals
Rentals longer than the card’s allowed time limit
Business use, rideshare use, or off-road use
Diminished value charges, depending on the card

If you injure someone in an accident and they sue, your credit card rental car coverage will not pay the damages. You need liability coverage from your personal auto policy, the rental company, or another source.

Auto insurance exclusions and limits

Credit card rental car coverage has limits that can affect your claim. Rental duration, excluded countries, vehicle type, and how you use the car all matter. Some cards exclude luxury cars, motorcycles, trucks, long rentals, off-road use, and rentals in certain countries.

There may be limits on the number of days credit card insurance will cover a rental. It's generally about two weeks within the United States and a month overseas, although some cards cover longer periods.

Also, credit card coverage may not apply in particular countries. There also may be exemptions for certain types of vehicles, such as pickup trucks, motorcycles, or high-end autos.

In addition, there may be limits that apply to both your own personal policy and credit card policies. Both personal auto insurance and credit card insurance also may fail to cover extra fees that some car rental companies now charge when a car is damaged. Such charges include a loss-of-use fee for the time the car is out of commission while it is being repaired, Diggs says.

Another charge – for "diminished value" – compensates the rental company for any decline in the vehicle's value resulting from the fact that the car has been repaired. This, too, typically falls outside the scope of your insurance coverage.

FAQ: Credit card rental car insurance

Does credit card rental car insurance cover liability?

No. Your credit card won’t cover injuries or damage you cause to other people. For that, you’ll need liability coverage from your own auto insurance policy, the rental company or another source.

Is credit card rental car insurance primary or secondary?

Most credit card rental car insurance is secondary coverage, meaning your personal auto insurance pays first. Some premium cards offer primary coverage, which applies before your auto insurance policy. Check your card’s benefits before you rent.

Do I need to decline the rental company’s insurance?

Yes. To use your credit card’s coverage, you’ll need to decline the rental company’s collision or loss damage waiver. If you accept it, your card’s protection may not apply.

Does credit card rental insurance cover international rentals?

Many cards include international rentals, but there may be country restrictions. Also, your personal auto policy may not cover you abroad, so it’s a good idea to double-check both before your trip.