Primary Vs Secondary Insurance
Secondary rental car insurance, which is the far more common variety, only kicks in to pay for damages after you’ve exhausted the limits of your personal auto insurance policy. So if your own car insurance covered up to $50,000 in property damage, and you totaled a rental car worth $40,000, the credit card company wouldn’t have to pay a cent. You’d have to coordinate with your own auto insurance company, where you’d be on the hook for your full deductible, as well as the inevitable hikes to your premiums.
Primary insurance, as you’ve likely guessed, covers damages before your personal policy. And if your credit card insurance is sufficient to cover any damages, you won’t have to notify your insurer at all. Obviously, nobody wants to get into a wreck in their rental car, but if you do, it can’t be overstated how big a difference this will make in the aftermath.
Decline Rental Companys Collision Damage Waiver
A CDW is a type of insurance that is available on rental cars.
When you purchase a CDW, youre purchasing a waiver from the rental company, making them agree to cover the cost of damages to the car youre renting.
If you waive the CDW, the rental company can pursue you for the cost of damages.
To make use of your cards insurance benefit, you should not purchase the CDW.
Ink Business Unlimited Credit Card
If you rent a car for business often, this is the card to consider. Ink is the only business credit card suite that offers primary rental car coverage in the U.S. for the value of the car, and this particular one carries no annual fee.
Also, if you like cash back but dont want to have to remember how many points you get for which purchase category, this is your set it and forget it cash back card because youll get 1.5% cash back on every purchase with no limit on the amount. The intro bonus is also decent, at $750 cash back after spending $7,500 on purchases within the first three months.
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Is There A Benefit To Purchasing The Rental Companys Insurance Instead
The benefit of using your credit cards insurance coverage over the rental companys is that its cheaper.
You can save money by declining to purchase the insurance offered by the rental company.
Thanks to your cards coverage, youll still know that youre covered should something happen.
There is, however, a benefit to using the insurance offered by a car rental company. Most cards offer only secondary coverage. The insurance offered by car rental companies is primary coverage.
If you get into an accident and only have secondary coverage, you have to ask your personal car insurance company to cover the accident. As a result, your insurance rates are very likely to go up.
When you purchase the insurance offered by the rental company, that insurance will be the primary coverage for your rental car.
If you get into an accident, you dont have to involve your personal insurance company. All you have to do is notify them of the accident. In most cases, this wont cause any change to your personal insurance premiums.
Purchasing insurance from the rental company might cost more in the short-term.
However, it can save you from increased premiums if you get into an accident.
Whether you want to take the risk and rely on your credit cards insurance coverage is up to you.
Not Every Type Of Vehicle Is Covered
When you read your cards guide to benefits, you may be surprised to see there are stipulations on the type of vehicles that are eligible for rental coverage.
Large passenger vans, motorcycles and RVs are likely to be excluded.
And if youre renting a really expensive Lamborghini for a spin on the town, its unlikely that your card is going to cover that either.
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What Rental Companies Are Trying To Sell You
When were talking about the insurance coverage available at the rental car counter, it usually means a collision damage waiver and a loss damage waiver.
These are the two products that rental companies try to sell you as a way to insure against any damages to the car. Essentially, theyre asking you to pay a daily fee for them to agree to not hold you responsible for damages to the vehicle.
Its worth noting that these do not cover physical injury to you, your passengers or people in other vehicles if youre involved in an accident.
Thats why its important to make sure youre adequate covered by your primary auto insurer before you rent a car.
What Happens If You Damage A Rental Car Without Insurance
As we mentioned in the last section, in many cases you can rent a car without any insurance. But its generally a risk that most people are not willing to take.
If your personal auto insurance does not cover car rentals , then the car rental company will charge you for any damage to the rental car, according to your rental agreement.
So if you dont have your own insurance or a credit card with car rental insurance, consider purchasing car rental insurance coverage from the car rental agency.
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What Does Primary And Secondary Coverage Mean
Knowing whether a credit card has primary or secondary car rental insurance is an important distinction. Primary coverage means that you dont have to file a claim with your car insurance company if you damage your rental car. Secondary coverage means that you are covered for whatever amount your personal car insurance doesnt cover. That said, remember that rental coverage covers only the rental car, not any other property or more importantly any medical expenses resulting from an accident, so additional liability insurance may be needed.
What Do I Need To Do To Use Discover Card Car Rental Insurance The Next Time I Rent
In order to put your Discover card car rental insurance to use, you are required to decline any other CDW coverages offered for your rental, pay for your rental in full with your valid Discover credit card, and rent the car under the same name printed on said card. Your car rental insurance with Discover will cover additional drivers, but only so long as they are officially authorized with the car rental company at the desk when you pick up your vehicle.
Always have Discover provide you with official documentation to bring with you when you pick up your rental stating that you are properly covered and can decline the rental company’s own CDW coverage.
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How Do You Choose The Right Credit Card For Car Rental Insurance
Because every credit cards auto insurance policy is so different, we strongly encourage you to check your cards Guide to Benefits or contact your cards customer service department before renting a car.
Get a copy of your cards policy in print or online , and be sure to ask these questions:
- Which types of vehicles are covered? Most of the time, trucks and exotic, specialty, and luxury cars arent covered by credit card car rental insurance. Neither are peer car rental services like Zipcar. Notable exceptions include Citi and Amex cards, which often cover expensive cars. Chases rental coverage may also exclude vehicles with open beds, including pickups, and motorcycles.
- Which countries are covered? Many credit card insurance policies exclude certain foreign countries like Ireland, Jamaica, Israel, Italy, Australia, and New Zealand. Citi and Chase cards often dont have these restrictions.
- Is loss of use covered? If a rental vehicle gets damaged or lost, the agency will usually charge for towing and loss of use while its getting repaired or replaced. Visa cards usually cover these fees Mastercards vary.
- How long am I covered? Most credit cards offer coverage for a rental period of 1530 days.
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These Credit Cards Offer Primary Rental Insurance
Noticeably absent from this list: Citi products. After they revamped their perks and benefits back in September, they axed this benefit from everything but the Costco card. Barclays, Bank of America, and Discover also dont offer primary coverage.
Chase Credit Cards
Coverage is primary with these Chase cards and provides reimbursement up to $75,000 for theft and collision damage for rental cars in the U.S. and abroad. That includes using your card to pay or your points through the Chase portal with Ultimate Rewards earning cards.
One thing to remember on the business cards. The primary coverage only works when the rental is being used for business purposes.
Costco Anywhere Visa® Card by Citi
Primary coverage is available from the Costco Anywhere Visa Card by Citi. It provides coverage up to $50,000 worldwide. You and authorized drivers are covered, as long as you pay for the full rental with this card and decline the rental agencys coverage. Benefits are described here.
Note that this benefit is secondary within the U.S. If you have another policy, that will take preference.
Capital One Cards
Coverage is primary with these Capital One cards and provides reimbursement up to $75,000 for theft and collision damage for rental cars in the U.S. and abroad. That includes using your card to pay and points-based payments through Capital One Travel
American Express Cards
USAA Credit Cards
U.S. Bank Visa Credit Cards
How Do I Claim Rental Car Insurance On My Credit Card
If youve paid for your rental car with a credit card that offers car rental insurance, then you may be wondering how to make an insurance claim in case of an accident. The way you file a claim will depend on the card issuer and the particular credit card that you have.
The easiest thing to do is to on the back of your credit card. The customer service agents can let you know how to proceed when filing an insurance claim.
Usually, there will be an online portal of some sort, and you will be asked to upload a series of forms and other documentation. This will include your rental agreement, any pictures you may have, or other information that is relevant to the insurance claim.
Remember too that, if your card only provides secondary insurance, then you will have to first contact your primary insurance carrier. In this case, the car rental coverage that comes with your credit card will only kick in for anything that is not covered by your primary insurance coverage.
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Make Sure To Use One Of These Cards When Youre Renting A Vehicle
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When we were choosing the best cards for car rentals, we put primary rental car insurance coverage as a top feature to have because it means you don’t have to tap your own car insurance first if you have it. All but one card on our list offer primary coverage, and the one that doesnt saves you an annual fee. We also looked at affordability, rewards, and other perks that may be of interest when renting a car. Here are our top picks.
What Type Of Car Rental Coverage Does Discover Offer
The protections offered by Discover rental car insurance will cover damage/loss caused by collision or theft of the vehicle you are renting . This is not “all-inclusive” insurance and so personal injury and property loss coverage are not included. Loss of use fees and towing charges are also excluded for all Discover cards except the Escape card, which will cover for these expenses so long as a receipt and fleet utilization log from the rental company is provided.
…See our page on car rental insurance types
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Capital One Credit Cards
Capital One provides a Rental Collision Damage Waiver on all eligible vehicles as a benefit of having a Capital One credit card. Just be sure to reserve and pay for your rental car with your credit card, and decline the rental companys CDW. Unfortunately, coverage on Capital One cards is secondary for cars rented within the U.S. However, outside the U.S., Capital One rental car coverage is primary.
The Rental Collision Damage Waiver provides reimbursement for collision damage and theft, up to the full value of the vehicle, as well as some towing expenses. Coverage is available worldwide except Israel, Jamaica, the Republic of Ireland and Northern Ireland.
The following popular Capital One credit cards offer primary rental car insurance outside the U.S. :
|Capital One Spark Cash for Business||$0 intro for first year $95 after that|
|Capital One® Spark® Classic for Business||$0|
How Rental Car Insurance On Credit Cards Works
To take advantage of rental car insurance from your credit card, decline the collision damage waiver from your rental car company. If you damage your rental car, you need to submit a claim to your credit card company if you have primary coverage, or submit a claim to your auto insurance, then a claim for any left over expenses to your credit card company.
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Does Discover Card Cover Rental Car Insurance
Nobody wants to pay more for a rental than they have to, especially when add-ons like insurances may already be available through your Discover card car rental insurance policy! You can potentially save big without sacrificing coverage by taking advantage of benefits provided through Discover. The only question is does your Discover card cover rental car insurance? Use the information below to get an idea of whether or not you qualify so you can get the best rate possible on your next rental.
|Discover Card Rental Car Insurance|
|Off-road vehicles, pickup trucks, mini-buses, antique/exotic vehicles and any coverage > $50,000||Yes||Italy, Ireland, Northern Ireland|
IMPORTANT:Terms vary by issuing bank and there are some restrictions that may apply depending on the specifics of your rental that could violate the policy under your Discover car rental insurance coverage. See the tips below to get a better idea of whether or not you’ll qualify for coverage and always call your card provider directly for the most accurate information.
Primary Vs Secondary Car Rental Insurance: Whats The Difference
When checking to see if your credit card offers car rental insurance, you want to find out as much information as you can about the policy. You can usually find the details in your cards guide to benefits.
If youre lucky enough to have coverage, one of the first things you should determine is whether its to want to find out is if it is primary or secondary coverage.
Lets talk about the differences between the two.
Which Credit Cards Offer Primary Rental Insurance Coverage
Rental car agencies will offer extra insurance options when you pick up the car, but knowing which credit cards offer primary rental insurance coverage can help you decide how much you want to pay for. Not all policies are created equal, and the cards are not uniform by any means in how their policies work.
Will I Have To Pay Any Extra Charges With My Visa Rental Car Insurance
Although you can get car rental insurance through Visa for no additional fees, the amount of your deductible/excess will vary greatly depending on your rental specifics, among other factors. The Visa insurance will cover for damage/loss due to collision or theft, towing services, and loss of use fees, but you must make sure your rental qualifies according to the terms and conditions of your specific credit card’s policy.
In the event of an accident you will have to pay any deductibles or charges from the rental company up-front, to be later re-imbursed by your credit card pending your adherence to their requirements for coverage.
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Should You Still Get Car Rental Insurance If Your Card Offers Coverage
If your card offers primary coverage and youve followed the steps to ensure that youre covered you shouldnt need to pay extra for car rental insurance. That said, remember that cards that offer primary rental car insurance only pay for damage to your rental car, not damage to the other cars, property or personal injuries. So you shouldnt rely on your credit cards rental car insurance if youre not comfortable with the risks.
Heres a detailed guide to help you determine when you need to pay for car rental insurance.
American Express Gold Rewards Card
- Rental Car Insurance: Covers up to the vehicleâs actual cash value plus any valid loss of use charges resulting from damage or theft
- Coverage amount: A rental car with an MSRP of up to $85,000
- Coverage period: Up to 48 consecutive days
- Conditions: You must use your card to pay the full cost of the rental vehicle and decline the rental agencyâs damage waiver
The American Express Gold Rewards card offers similar coverage as the Scotiabank Gold American Express card in that they both offer full coverage up to the vehicleâs actual cash value plus any valid loss of use charges resulting from damage or theft. This card covers vehicles with a manufacturerâs suggested retail price of under $85,000 in its model year. This includes cars, sport utility vehicles, and minivans, provided they have a maximum gross vehicle weight of 2,680 kg , seat no more than eight occupants, and are for private use only.
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