Credit Card Rental Car Insurance: Primary vs Secondary Coverage & Benefits

Dayton Uttinger
Woman holds head in front of car accident

No one wants to be held liable for damage done to a rental car. You typically rent cars when you’re traveling, and you don’t need to add more stress to that situation. So when the rental representative asks if you want to add some insurance, you stop to calculate the risk. Should you?

You might be surprised to learn that your credit card may already have you covered. Find out if you can rely on it when the time comes.

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What is Credit Card Rental Car Insurance?

The rental agency will try to sell you on Collision Damage Waivers (CDWs) or Loss Damage Waivers (LDWs). These are basically just agreements that, for an initial fee, the rental company will not come after you for damage to the car. The rental company already has insurance on the car, but if you have a CDW or a LDW, then they won’t look to your insurance first.

CDWs and LDWs are also what credit cards offer as a perk. However, if you’re planning on using your card’s insurance, understand how the pecking order works first.

Credit Cards and Primary Rental Car Insurance

If you’re at fault in an accident with a rental car, your primary insurance will pay for the bulk of it. In most cases, your credit card will only offer secondary coverage— your personal car insurance will be the primary. That means that the accident will have to be reported to your personal car insurance providers first, and that can raise your insurance premiums, unfortunately.

Your credit card will usually offer secondary insurance, which means that they might reimburse you for your deductible, or pay off costs not covered by your personal insurance.

Rarely, credit cards will offer primary insurance. If this is the case for you, make sure to take advantage of it. If your credit card offers primary insurance, then your personal insurance premiums likely won’t raise, which could save you money in the long run.

What Does Credit Card Rental Car Insurance Cover?

Exactly how far your credit card rental car insurance extends will depend upon the type of card, the bank that issued it, and the creditor’s policies. However, most credit cards will cover towing expenses or fees. If they offer primary coverage, then they will cover the whole scope of CDWs and LDWs, including collision damage and theft.

If you don’t have personal car insurance, then even your secondary credit card coverage could be forced to be your primary in the event of an accident, but that doesn’t mean that they will pay for everything. If you’ve severely damaged the car, or it has been stolen, they won’t be eager to pay off that bill.

Common Exclusions From Coverage

In fact, credit cards insurance typically has a long list of exclusions. Some of the more popular ones include:

  • International accidents
  • Liability coverage
  • Medical expenses
  • Lengthy rentals— most credit cards won’t cover you for several months
  • Exotic sports cars or motorcycles

Does My Credit Card Provide Rental Car Insurance?

Most travel rewards credit cards do offer some sort of rental insurance. It is always a good idea to check in, though, if you’re not sure.

If you don’t have rental car insurance through your credit card, you might be able to add it for an additional fee. Having this extra buffer can do a lot for your peace of mind, so look into the cost of adding it to your current package. You might even be able to get primary coverage!

In general, make sure you know the answers to the following questions before relying on credit card rental car insurance:

  • Is it primary or secondary coverage?
  • Will they cover the make and model that I am renting?
  • Will they cover me for the entire rental period?
  • Will they cover me where I am renting the car?
  • Are there any exclusions that I should be aware of?

Additionally, make sure that you pay for the entire rental with the credit card and that you are the only driver. If you want to claim your card insurance for an accident in which you were not the driver, you’re going to get a lot of pushback.

Most credit cards will require that you refuse the rental company’s CDW or LDW if you want to take advantage of the card’s insurance.

Hopefully, you’ll never find yourself in a situation where you have to rely on credit card rental car insurance, but if you do, you’ll be happy that you got your ducks in a row beforehand. Any accident is stressful, so it pays off to be prepared.

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