Before leaning on your credit card for rental car protection, find out whether it offers primary or secondary coverage. To do this, ask your issuer.
“The coverage on credit cards typically isn’t primary insurance,” says Neil Abrams, president of Abrams Consulting Group, a global consulting and research firm specializing in ground transportation and car rentals. “It’s secondary insurance, which means your own [auto] insurance stands in front of your credit card insurance.”
Even so, this coverage can be valuable. If your card offers secondary coverage through an auto rental collision damage waiver, or CDW, it may pick up the bill for certain costs that aren’t covered, such as your auto insurance deductible. And if you don’t have auto insurance, or are driving in a country where your auto insurance doesn’t cover you, your card’s policy may become primary. For many, that’s reason enough to skip the expensive coverage sold at the counter.
Even if you want more protection, buying primary coverage separately at the rental car agency or through a third party company — such as Allianz Travel or Bonzah — isn’t your only option. You could also use a credit card that comes with primary protection. Chase, for example, offers primary coverage on many of its credit cards. With American Express cards, you can generally pay extra for primary coverage that’s much cheaper than the policies you can buy at a rental car agency. Terms apply.
2. Certain vehicles, including RVs and luxury cars
Wrecking a Ferrari could prove much more expensive than wrecking a Nissan Altima, and your credit card auto rental CDW takes that into account. Generally, luxury vehicles and other high-value cars are excluded from your card’s coverage. In some cases, you might have to provide more paperwork to the rental car agency when renting cars like these, too.
“For specialty vehicles, luxury vehicles and high-value vehicles, many rental car companies may require you to provide your own insurance,” Abrams says.
Likewise, your credit card might not cover you when you’re renting recreational vehicles, motorcycles, trucks and trailers. In that case, find out whether your personal auto insurance or homeowners insurance policies cover you. If they don’t, purchasing separate coverage — say, through a rental car agency or a third party company — could be a smart call.
3. Rental cars in certain countries