Travel credit cards offer a broad range of perks that can make travel more convenient, more comfortable and even more affordable. One such benefit is rental car insurance, although the type of rental car coverage your credit card comes with will determine its utility and value.
But, how does car rental coverage work? The process is actually rather simple. Once you sign up for a rewards credit card that offers this benefit, you’ll use your credit card to pay for the full rental agreement when you rent a car. At that point, the coverage you have with your credit card will apply to your car rental agreement. However, since there are different levels of car rental coverage offered by a credit card, however, it’s crucial to know your card’s offering inside and out.
How to use credit cards for rental car insurance
Some rewards credit cards offer primary rental car coverage, which you can use in place of your own insurance. When your credit card offers primary rental car coverage, you can decline the paid coverage at the rental counter and rest assured you’re covered up to the limits of your policy.
You should also note that car rental insurance, which is often called a Collision Damage Waiver, can be primary or secondary. While primary coverage kicks in before other coverage you have, secondary coverage can only be used after you file a claim and exhaust benefits from any other insurance you have, including your own auto insurance policy.
To get the most out of car rental coverage offered by a credit card, you need to know what kind of coverage you have, understand any limitations and use your credit card to pay. You also have to be clear that you’re declining the paid coverage offered by the rental car company and that you list everyone who might drive the car on the rental agreement.
While any credit card that offers car rental insurance can be useful, some cards offer a better rental car benefit than others. The following cards offer the best primary coverage among travel credit cards on the market today.
Best budget card with primary coverage
Chase Sapphire Preferred® Card
The Chase Sapphire Preferred® Card is an excellent deal when you consider all the perks you’ll receive for its $95 annual fee. This card lets you earn 5X points on travel purchased through Chase Ultimate Rewards®, 3X points on dining and 2X points on all other travel purchases; 1x points on all other purchases, but you can also earn 100,000 points worth $1,250 in travel through Chase Ultimate Rewards when you spend $4,000 on your card within three months of account opening. When you go to redeem your rewards, you can cash them in for gift cards, statement credits, travel through the Chase portal (with 25 percent more value) or 1:1 transfers to airline and hotel partners.
Travel benefits include a primary collision damage waiver coverage for rental cars that’s worth up to the actual cash value of the rental car. Coverage is also good for rental periods of up to 31 days, and for damage, theft, towing charges and loss of use charged by the rental car company.
Other important travel-related perks you’ll receive include trip cancellation/interruption insurance, baggage delay insurance, trip delay coverage, lost luggage reimbursement, travel accident insurance and roadside dispatch.
Best luxury card with primary coverage
Chase Sapphire Reserve®
The Chase Sapphire Reserve® is the more luxurious cousin of the Preferred card, albeit with a much higher annual fee of $550. This card lets you earn 5X total points on air travel and 10X total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards® immediately after the first $300 is spent on travel purchases annually. Earn 3X points on other travel and dining & 1 point per $1 spent on all other purchases. You’ll also earn 60,000 points after you spend $4,000 on your card within three months of account opening.
Since these points also fall within the same Chase Ultimate Rewards program, you have the same redemption options available to you. The only difference is, you’ll get 50 percent more travel when you redeem points in the Chase portal, whereas the Preferred card gives you a 25 percent boost in value. This means the Chase Sapphire Reserve’s 60,000 bonus sign up points are worth $900 in travel through the portal.
Cardholder benefits include a $300 annual travel credit, up to a $100 application fee credit for Global Entry or TSA Precheck, complimentary DashPass subscription from DoorDash (after activating by Dec. 31, 2021), one year Lyft Pink membership and Priority Pass Select airport lounge membership.
Auto rental coverage is also primary and worth up to $75,000 in damage from collision or theft. Other travel perks you could benefit from include trip cancellation/interruption insurance, lost baggage insurance, trip delay coverage, roadside assistance, travel accident insurance and emergency evacuation and transportation coverage.
Best business card with primary coverage
Ink Business Preferred Credit Card
If you travel for business often, you should also consider the Ink Business Preferred Credit Card. This card offers primary rental car coverage when you use your credit card to pay for a rental agreement and you are renting the car for business purposes.
You can earn 100,000 bonus points after you spend $15,000 on purchases in the first three months from account opening. That’s $1,000 cash back or $1,250 toward travel when redeemed through Chase Ultimate Rewards. In addition, you’ll earn 3x points on the first $150,000 spent on travel and select business categories, along with 1x points on all other purchases.
Other important cardholder benefits include cell phone protection, free employee cards, trip cancellation and interruption insurance, extended warranties and purchase protection.
Best airline card with primary coverage
UnitedSM Explorer Card
If you fly with United Airlines often and want to earn miles in the United MileagePlus program, you can also check out the United Explorer card. This airline credit card starts you off with 40,000 bonus miles when you spend $2,000 on your card within three months of account opening. You’ll also earn 2x miles at restaurants, hotels booked direct and purchases made with United Airlines, along with 1x miles on everything else you buy.
Cardholder benefits include primary auto rental coverage that’s the same coverage you get with the Chase Sapphire Preferred card. You’ll also receive trip delay reimbursement, baggage delay insurance, purchase protection, lost luggage reimbursement, trip interruption or cancellation coverage and a first checked bag free when you fly United, among other perks.
Things to know before using a credit card for rental car insurance
Plenty of other travel credit cards offer auto rental coverage
We highlighted the best credit cards for auto rental coverage above, but we only included cards with the best primary coverage. Keep in mind that plenty of other travel credit cards offer secondary auto rental coverage that can help cover losses after any other insurance policies you have are exhausted.
Some cards ask you to pay a premium for primary coverage
Also be aware that some cards, including premier American Express travel credit cards, offer secondary coverage with the option of paying for premium primary auto rental coverage. For example, you could sign up for The Platinum Card® from American Express to take advantage of its secondary coverage, or you could pay a flat rate per vehicle for up to 42 consecutive days of premium car rental protection.
Some limitations apply, so make sure to read the fine print
Most credit cards that offer rental car coverage list some fine print you should be aware of, including wording that limits the type of automobiles they’ll cover. With Chase rental car coverage, for example, antique and exotic cars may not qualify. This coverage is also only good for rental periods up to 31 days.
Most policies offered by a credit card let you file a claim online
Different credit cards may have different policies when it comes to filing a claim. However, most offer an online claims portal that lets you submit your claim paperwork and proof of your claim via the web. Make sure to gather evidence of your claim including photos of damage, police reports and any other evidence related to your specific problem, whether it’s damage, theft or some other mishap.
The information about the United Explorer Card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.