Car rental collision/loss damage insurance protects you in the event that your rental car is damaged or stolen. It's a very useful benefit that can save you tons in the case of such an accident. In order to receive this insurance, you'll need to typically do two things:
- Decline the collision damage waiver offered by the car rental company
- Pay for the rental using the credit card that is offering the insurance
Declining The Coverage
Car rental companies will offer you their collision damage wavier when renting a vehicle. This is usually a per-day costs that piles on top of the cost of the rental itself which can seriously up the cost of renting cars. The average is around $20 per day, but it can be as high as $30+ with some rental companies. When you purchase this coverage from the car rental company, it waives their right to hold you responsible for any accidental damage done to the rental car.
If you have a credit card that offers car rental collision/loss damage insurance, this can save you a significant amount of money in the long run since you'll be able to avoid that per-day rate the company charges. The credit card's coverage will only cover you if you decline the car rental companies coverage. If you don't have a credit card that offers this coverage, you'll want to go with the coverage being offered by the car rental company. Having no coverage at all will allow the car rental company to hold you accountable for any costs associated with repairing or replacing the vehicle which is way worse than the costs of their coverage.
Use The Credit Card To Pay
The second step to being eligible is that you will need to use the credit card offering the insurance to pay for full rental. There's some exceptions out there with cards that will cover you if you pay most or half, but it's best to just pay the entire costs to avoid any problems in the case there is an accident. When it comes to paying for car rentals, I side with having collision/loss damage coverage over how much I get back in rewards. The couple of extra points, miles or cash back you earned from using a card without coverage will not matter if you're dishing out cash for the car rental's per-day rate or you're paying tons of money due to not having coverage.
What Does Collision/Damage Insurance Cover?
Coverage will depend on the card provider, but generally it covers costs that are associated with damage to the vehicle ranging from marks and dents to accidents and costs associated with vandalism. Do note that car rental collision/loss damage insurance does not cover damage to other vehicles, property, or people. Those are covered by liability insurance. Most will also not cover personal effects insurance which is valuables that may have been stolen or damaged.
Best Cards With Coverage
While there's quite a large amount of cards that offer car rental coverage, some cards tend to be better than others. This is either due to better coverage or coverage that lasts for 31 or more days. Listed below are the cards you'll typically find on any top car rental credit card list. You can click on the card to learn about other card benefits and calculate total rewards.
- American Express Cobalt Card
- American Express Gold Rewards Card
- Scotiabank Gold AMEX Card
- Scotiabank Passport Visa Infinite Card
- TD Cash Back Visa Infinite Card
- Tangerine World Mastercard