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
Another thing you'll want to pay close attention to is the type of car rental coverage your card offers. It comes in two flavors: Primary Coverage and Secondary Coverage.
Types of Coverage
When looking for a card that offers CDW/LDW coverage, you'll want to check on what type of coverage it offers. It's either going to be primary coverage or secondary coverage.
Primary CDW Coverage is the best of the two. For this coverage, you will not need to file a claim with any other insurance. The primary insurance will apply if an incident happens.
Secondary CDW Coverage requires you to first file a claim with other insurance. After this is done, the secondary coverage will kick in.
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 mainly due to offering primary coverage over secondary. When it comes to car rental insurance, Chase and AMEX are pretty much at the top of the chart.
Chase offers the best car rental coverage of any bank due to the complimentary primary CDW coverage that covers rentals worldwide. Benefits vary by Chase credit card, but you'll usually receive other great coverage and protection such as:
- Trip Cancellation Insurance
- Trip Interruption Insurance
- Roadside Dispatch
- Cell Phone Protection
- Purchase Protection
- Extended Warranty
On top of that coverage, you'll also earn rewards depending on the Chase card. Chase credit cards earn cash back, Ultimate Rewards Points, United Miles, and more.
Do note that while coverage is worldwide, there are a few exceptions. You will not be covered in Australia, Ireland, Israel, Italy, Jamaica, and New Zealand. You will also not be covered in OFAC sanctioned countries. CDW coverage provided by Chase applies to rentals that are 31 days or less. Below are some of the top recommend cards for primary coverage.
American Express offers secondary CDW coverage on most of their credit cards with the ability upgrade to Primary Premium Car Rental Protection for a cost. CDW coverage is worldwide with the exception of cars rented in Australia, Italy, and New Zealand. Coverage will also not apply to OFAC sanctioned countries.
You will need to enroll your American Express Card before your rental. Once enrolled, the primary coverage will kick in every time you use that enrolled card to pay for the vehicle. You will also be charged between $12 and $25 each time depending on the coverage you select and the state you live in.
Even through it's not complimentary like Chase's coverage, this is still significantly cheaper than purchasing through the car rental company. This is because the price you pay with AMEX for your rental is for the entire rental period (max of 42 days) rather than the per-day cost that rental companies charge. So you can still save a good amount of money paying for AMEX's insurance.
Since most of their cards are capable of obtaining Primary Premium Car Rental Protection, it really doesn't matter which AMEX credit card you use. So I've listed the top American Express credit cards for those that love to travel.
Credit Cards With Car Rental Collision
The list below features all of the cards in the database that offers Car Rental Collision/Loss Damage insurance. You can click on a card to learn more and calculate total rewards and cash value based on spend, benefits, and fees.