Stop paying extra – Here’s when you actually need to pay for car rental insurance

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Has this been you? You’ve booked your rental car with one of the best credit cards for car rentals, confident that you won’t have to pay any extra insurance for your vehicle. While checking out, the agent runs you through your pricey insurance options with the car rental company, and when you decline, a high-pressure sales pitch ensues.

They try to scare you with worst-case scenarios: What if you injure someone and get sued for millions of dollars? What if you crash the car onto someone else’s property? Do you know that a minor mishap could be financially devastating? Are you sure you don’t need extra coverage?

I’ve been through this many times, and admittedly, when I wasn’t as seasoned a traveler, I second-guessed declining the rental company’s insurance on multiple occasions. It’s no fun pulling out of the rental garage with anxiety over whether or not you made the right choice. That’s why being prepared and knowing exactly what you are (and aren’t) covered for can help you decide if you need to pay for car rental insurance.

Car rental agents will try to upsell you, but in a lot of cases you may not need to pay extra for car rental insurance. (Photo by Piyawat Nandeenopparit/Shutterstock)

Do you need to pay for car rental insurance?

Before you give in to a pushy rental agent and pay for car rental insurance, it’s important to know what you’re already covered for. There’s no sense in duplicating coverage if your own insurance or credit card benefits are adequate.

Typically, car rental agencies offer four types of car rental insurance:

  • Collision Damage Waiver or Loss Damage Waiver (CDW or LDW): This covers the car for damages due to collision or theft. So if you dent the side of your vehicle or get into a bigger accident, you won’t have to pay for repairs (and sometimes towing or loss-of-use charges).
  • Liability insurance: This covers claims from other people due to injury or damages to their vehicle or property. Overseas, this may already be included in the cost of the rental car.
  • Personal accident insurance: This covers medical costs and death benefits to you and your passengers in the event of an accident.
  • Personal effects coverage: This covers theft of your personal belongings from the rental car.

These protections aren’t cheap. You can expect to pay anywhere from a few dollars to $30 or more per day for additional insurance, depending on the coverage you choose. Often, rental companies will bundle several types of coverage together at a discount, but even then the costs involved can sometimes exceed the daily rental car rate.

Here’s an example of coverage options on a one-day rental with Hertz:

And this is an example of insurance on an Avis rental with the same destination and travel dates:

Rental agents will try to persuade you into signing up for the maximum amount of coverage they provide — they’re in this to make money, after all. They may even argue with you when you say you’ve got your own coverage through your personal policy and travel credit card benefits. I had a car rental agent once in Washington, D.C., who pestered me for a good 10 minutes with frightening accident possibilities and statistics that bordered on bullying – it was tempting to just give up and pay the additional cost to make him stop.

Being prepared ahead of time is key. You’ll want to do some research into exactly what you’re covered for (and what you’re not) before you sign on the dotted line.

Know what your personal insurance policies cover

If you have a personal car insurance policy, you may already have sufficient coverage for a lot of scenarios. Give your insurance agent a call and ask these questions:

  • Does your policy include rental cars and if so, how much are you covered for in event of damage to the vehicle?
  • Are there restrictions? For example, you may not be covered for rentals overseas, certain types of vehicles, longer rentals or if your rental is for business purposes.
  • Are loss-of-use and towing charges included?
  • Does your policy include liability, and if so, is it adequate in case you get sued for damages or injuries?
  • What else is covered in the event of a mishap with a rental car?

You’ll also want to check in with your insurance agent if you carry homeowners or renters insurance. You may already have coverage if personal items are stolen from your rental vehicle. You might also consider printing out the relevant portions of your policies or having electronic copies handy while you’re on a trip.

And if you and your passengers have medical insurance or purchased travel medical insurance, it may not be necessary to carry additional personal accident insurance through the rental company. However, it’s especially important to find out if your medical insurance covers accidents or injuries when you’re abroad.

If you find you have gaps in your coverage – for example, if your liability insurance is minimal – you may want to consider purchasing additional insurance through the rental agency.

Know what rental car insurance your credit card covers

Aside from earning a big travel rewards bonus, one of the best reasons to have a rewards credit card for the primary rental car insurance some of them offer. If your card comes with primary coverage you don’t have to file a claim with any other insurance (like your personal policy). Some cards provide secondary rental car insurance, where they’ll only pay out for amounts left over after you’ve filed a claim with other insurance policies you have.

In most cases, this type of insurance only covers damage to the rental car (due to collision or theft) and for it to kick in you must pay for the entire rental with the card and decline the car rental company’s collision damage waiver or loss damage waiver (CDW or LDW). Depending on the credit card, there are always restrictions, including:

  • The maximum they’ll pay out for damages (for example, the Chase Sapphire Reserve® offers primary rental insurance for damage due to collision or theft on most rental vehicles up to $75,000).
  • Types of vehicles covered (for example, the primary insurance offered with the Chase Sapphire Preferred® Card won’t cover expensive, exotic, and antique automobiles; certain vans; vehicles that have an open cargo bed; trucks; motorcycles, mopeds, and motorbikes; limousines; and recreational vehicles).
  • Geographic restrictions (for example, rentals in Australia, Italy, New Zealand and Office of Foreign Assets Control (“OFAC”) sanctioned countries aren’t eligible for the secondary insurance provided by The Platinum Card® from American Express)
  • Length of rental restrictions (for example, Chase credit cards don’t cover rentals that exceed 31 consecutive days)
  • Type of rental covered (for example, the Ink Business Preferred Credit Card offers primary insurance when renting primarily for business purposes in your country of residence, otherwise it’s secondary. However, if you don’t have your own personal insurance or you’re renting outside of your country of residence, coverage is primary regardless of whether it’s for personal or business reasons).

The information for the Ink Business Preferred Credit Card has been collected independently by Million Mile Secrets. The card details on this page have not been reviewed or provided by the card issuer.

Some cards won’t cover rentals in certain countries, like Ireland. (Photo by AlbertoLoyo/iStock by Getty Images)

Team member Joseph scraped his rental car against a cement pillar with damages to the tune of $2,300, but he was covered by his Chase Sapphire Preferred.

If you’re unsure, call the benefits administrator for your card and ask exactly what you’re covered for on a specific rental. Keep in mind the insurance provided by credit cards is for damage to the car due to collision or theft only, in most cases. Liability, medical and personal effects coverage is not included.

You can also read our post on things you must know before relying on credit card rental car insurance for additional guidance.

A note about American Express cards. When you enroll your card in the Amex Premium Car Rental Protection program, then use the card to pay for your rental, you’ll get primary rental insurance. They’ll charge a flat fee of $12.25-$24.95 per rental (not per day) for rentals up to 42 consecutive days. The fee depends on where you live and the coverage level you choose. Be aware that there are restrictions; for example, rentals in Australia, Ireland, Israel, Italy, Jamaica and New Zealand are not eligible.

Here’s another thing to keep in mind: If you’re relying on secondary insurance to top-up the coverage provided by your personal auto insurance policy, remember you’ll need to file a claim with your personal policy first, which could result in a big increase in your premiums down the road. That’s why it’s always better to use a card with primary insurance – my go-to card is the Chase Sapphire Reserve, which has the best coverage of any Chase credit card.

You also might have rental insurance depending on the payment network and card designation you have. For example, the best Visa credit cards have the Visa Infinite designation, which include primary rental coverage for 15 days (varies by card). On the other hand, the top Mastercard credit cards, with the World Elite Mastercard designation, don’t come with rental coverage as a standard perk.

Err on the side of caution

If there’s any doubt in your mind about your coverage (perhaps you didn’t check in with your insurance agent before the trip or you’re unsure if it’s enough), it’s always better to pay for additional insurance through the rental agency. Yes, you’ll get stung with additional charges, but the peace of mind that comes with knowing you’re protected is worth it.

Besides which, you may have already saved a ton on your car rental by using sites like Autoslash to monitor for lower rates.

Bottom Line

Before you cave in to a heavy-handed insurance sales pitch at the car rental counter, it’s important to know if you’re already covered by your personal policies or credit card with rental insurance for damages or costs in the event of an accident:

  • Collision Damage Waiver or Loss Damage Waiver (CDW or LDW): Damages due to collision or theft
  • Liability Insurance: Claims from other people due to injury or damages to their vehicle or property
  • Personal Accident Insurance: Medical costs and death benefits to you and your passengers in the event of an accident
  • Personal Effects Coverage: Theft of your personal belongings from the rental car

You may already have decent coverage through your personal auto insurance policy and credit card, but rental company agents might try to convince you otherwise. Your best bet is to call your insurance agent and credit card benefits administrator to find out exactly what you’re covered for on a specific rental. This may vary depending on the type of vehicle, country, reason for rental and more.

That way, when you’re paying for your car, you can confidently decline the insurance you don’t need from the rental agency and save big bucks in the process.

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Jasmin Baron is a contributor to Million Mile Secrets, he covers topics on points and miles, credit cards, airlines, hotels, and general travel.

Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)

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1 year ago

After I read your article, I called the Chase Administrator Benefits line to verify that I would be covered when I rent a pickup truck in Bonaire in November, and to get a coverage letter. The recording I listened to describing benefits clearly stated that passenger vehicles and pickup trucks were covered.

The representative I spoke with was polite and verified that I would have primary insurance through the credit card and he sent a coverage letter, which I forwarded to my travel agent to book the rental. She quickly responded, highlighting the wording in the letter stating that trucks were excluded. I let her know that the representative expressed that the pickup truck would be covered, but I would contact them again to get a corrected letter.

Called back to Chase Benefits Administrator. The representative I spoke to indicated that indeed pickup trucks were covered, but it is a relatively new change. She told me she couldn’t alter the letter in any way since it comes from Chase, and that I would need to take up the issue with Chase. Then she sent the benefits “brochure” to me. We both reviewed it, and it not only excludes “trucks” but any vehicle with an open cargo bed. (I googled that phrase, and the first results relate to pickup trucks.) She again verified that a pickup truck rental would be covered but that Chase needs to update the materials. When I asked if she could escalate this issue to someone, she insisted that they could not do anything (and refused to transfer me up to a supervisor) and that it was a Chase issue. She did say she’d write an email to the lead team explaining the issue, but she told me to call Chase.

Next, I called Chase customer service. A very nice representative spent more than half hour with me and told me it was really a “credit card” issue and she kept me on hold while she tried to get a resolution through them. She was surprised though, when they told her it was not a “Chase” issue, but a “Visa” issue. However, she didn’t know how I could get in touch with “Visa”. She suggested I try to speak with an Account Supervisor at Chase Credit Card department–and transferred me.

The Account Supervisor told me that they have nothing to do with the card benefits and I’d need to contact the Benefits Administrator. I expressed everything that happened before and she got testy with me, but then said she’d send an email to “MA” who does their “background research”. She then proceeded to read what she was typing, which had several errors–such as “truck” instead of “pickup truck” and my correct contact info. Each time I corrected her she was snippy, acting as if helping a customer was a huge burden. She didn’t commit to any type of response.

So I then went to Chase facebook page and sent a private message. Their response was that I need to contact the Benefits Administrator. (Even though I clearly outlined that I had done that.) When I wrote back pointing that out, they said they would open a complaint for me.

I sent a secure message through my private account. The response was that they can’t help via email, I should call their Credit Card Department.

Everyone is pointing fingers/shrugging shoulders. No one is disputing that a pickup truck rental is covered by the policy. However, the written materials exclude “trucks” (and a pickup truck is a truck) and my travel agent is stating that I’ll be required to get the rental agency’s insurance unless I can show that a pickup truck is specifically covered.

Good news is I have a bit of time–trip isn’t for a few months. Bad news is that I’m at a loss in the loop of poor customer service. No one at Chase has stepped up to “own the issue” and commit to work to get it resolved. I’m not sure where to escalate from here–every person I’ve spoken with has got me to a dead end has been unable/unwilling to kick it up any further. I’m not even sure where to escalate it to. Somewhere at Chase there must be a God or Goddess who solves interdepartmental problems/issues like this. As I understand it, the issue is that the policy changed recently so that pickup trucks are covered but the written materials they have about the benefits, including the coverage letter and brochure, have not been updated to reflect the change.

Any suggestions?

Thanks again for the article, which prompted me to check and verify that my rental will be covered by the card!

Reply to  Rik
4 months ago

Yes, email the CEO. No one should have to jump through hoops like you did. I also maintain a phone log for each credit card noting the date and I I spoke with to document any issues. The company can then pull the recording.

Reply to  Rik
1 year ago

If the rental is in the US or Canada, you are under no obligation to purchase insurance at the rental counter. It is *always* optional. Just decline it. That may not be the case though if you are renting in another country. It’s important to read the terms and conditions when booking. If your travel agent booked the rental for you, bring up the confirmation on the rental company’s website and review the T&Cs there. That is the final word.

1 year ago

I have the Chase Sapphire Preferred card that I will be using for a car rental in Costa Rica shortly (to cover CDW). I will be listing my husband on as a second driver as he will most likely be doing the bulk of the driving there. Do you know if he’s covered without being the card member? Or am I the only one covered?

Reply to  Yvonne
1 year ago

Your husband would be covered as long as he’s named on the rental contract as an authorized driver of the rental.

Keep in mind that the rental company may charge you extra to add him. Some companies like Avis, Budget, and Enterprise allow spouses to drive for free in the U.S., but their policies may be different in Costa Rica since most often, the local offices of the major rental firm in CR are franchises and thus may have different policies than Avis corporate.

Joe Rush
1 year ago

I was once took my uncle who was visiting from overseas to Enterprise, the scummy rental agent figured we were easy prey and told us if we don’t take the insurance and get into an accident, its a crime and we would go to jail for “theft of services” since Enterprise wouldn’t have use of the car while under repair.

Andrew Wan
Reply to  Joe Rush
1 year ago

So sorry to hear about that 🙁 The silver lining is that I’m sure it’s an unforgettable experience and you’ll make sure it won’t happen to you again.

1 year ago

hertz issues…
…..I was told that if my husband did not have a hertz reward #, I would have to pay extra for him to b a driver
please confirm
….if I use a hertz reward for more than 50% of my rental charge, my cred card rental coverage is void….Per online reseach

Reply to  liz
1 year ago

Hertz is correct about adding your husband as an additional driver. Unlike Avis, Enterprise, and Budget, Hertz only allows spouses to drive for free if the primary renter is a Hertz Gold member, but it’s a free program to join, so really no downside.

As for the credit card coverage, generally as long as you pay for the entire amount that is due with the card, you would be covered. You would not be covered on a free rental where you just put the deposit (a.k.a. authorization hold) on the card. That said, policies vary by credit card company, so if you have any doubts, call the number on the back of your credit card and have them email you a copy of the insurance policy. It will be clearly spelled out there.

Reply to  AutoSlash
1 year ago

correction…..I was the primary renter, a hertz gold member and they were still going to charge my husband because he was not a hertz gold member….he has since become a hertz member.

I later sent an email to hertz about the way the entire transaction was handled and they sent me a 50.00 hertz credit.

Reply to  liz
1 year ago

Glad Hertz took care of you on this as the policy does not state that the additional driver must be a Gold member as well. The employee who tried to charge you was either misinformed or just trying to be difficult. 🙁

Reply to  AutoSlash
1 year ago

I had always understood the policy the same as u but it was hertz customer svc line that confirmed that my husband had to be a gold member so as not to b charged. After the trip I phoned hertz to verify the agents info

Reply to  AutoSlash
1 year ago

I had always understood the policy the same as u but it was hertz customer svc line that confirmed that my husband had to be a gold member so as not to b charged. After the trip I phoned hertz to verify the agents info

1 year ago

Amex offers a primary insurance product for collision and damage that can be applied to all your cards. It’s $19 to $25 for the entire rental period, up to a certain amount of days (if you need longer you can always just re rent).

Reply to  Dee
1 year ago

Dee, is that any Amex card or only certain versions? Thank you!

Steven M
1 year ago

In what world is someone going to pay a base rate of $74/day for a Chevy Spark?

Reply to  Steven M
1 year ago

Been there, done that. Business trip, car reserved the evening before.

1 year ago

I just rented from Enterprise for the fist time. I told the rep I have primary coverage through my Chase Sapphire Preferred card. Then he said if I have an accident they’ll try to screw me over and only payout $100-$200. My brother once declined coverage and was told if he has an accident he’ll be taken straight to jail!!