Every one of us has been there before. Every time you rent a car, you’re presented with a vast selection of optional coverages, each with its own price. You need to be sure you’re covered, but you don’t want to pay more than you have to for your rental car. Fortunately, another choice is travel insurance, which comes with your credit card.
Suppose you rent a car and pay for it with a specific credit card. In that case, you may be eligible for additional coverage. This little-known bonus has the potential to save you a ton of cash on your next rental car. Further, some credit cards come with other benefits like hotel VIP treatment and reduced rates at car rental agencies.
However, only some credit cards provide insurance, and the level of protection provided varies widely among cards. If you’re planning to rent a car for your next trip or everyday use, you should use only the best credit card to avoid unwanted surprises.
How does car rental insurance through a credit card work?
To begin, while renting a car, you must pay for the rental using a particular type of credit card with its own insurance policy for auto rentals. As an added precaution, only the primary renter on the rental contract may use the card for payment. In addition, you must decline the Collision Damage Waiver (CDW), also known as Loss Damage Waiver (LDW), in your rental agreement for the credit card coverage to kick in in the unfortunate event of a collision.
You should evaluate your documentation to see if the additional insurance and associated payment were already included in your rental agreement, as it may have been by certain car rental agencies.
You won’t have to worry about paying for any of the costs associated with theft or damage to the rental automobile after you’ve returned the vehicle. Thanks to this insurance, you won’t have to worry about coming up with the money to cover the bill. However, the included coverage will not cover the cost of repairs to another vehicle or medical expenses for anyone injured in an accident that you cause. Your auto insurance policy, or one you purchase through the rental agency, should have your back in these scenarios.
You’ll also see that two distinct options are primary and secondary coverage for automobile rentals made with a credit card. This credit card provides primary coverage, which means that in the event of an accident, you will not need to include your own motor insurance policy to file a claim, saving you time and hassle. You won’t just save time this way, but you’ll also save money on your own insurance policy.
If applicable, you must file a claim with your primary insurance provider before claiming your credit card’s car rental insurance. After your primary insurance claim is resolved, you can use your credit card to pay for any remaining expenses, such as your deductible, that weren’t covered by your primary policy. Note that several credit cards that provide secondary coverage automatically become primary coverage if you don’t have auto insurance or rent a vehicle outside the United States and your own policy doesn’t apply.
In addition, several of the available forms of insurance have subtle distinctions from one another. A policy’s maximum limit may be lower or higher than the rental car’s market price. Many insurances have a limited duration of coverage, with 31 days being particularly typical. Therefore, you may find that your credit card coverage only applies if you rent a car for an extended period.
More specifically, expensive automobiles and pickup trucks are not included. You may also discover that some locations are not accepted; this list varies from card issuer to card issuer, but popular examples include Australia, New Zealand, Italy, and Jamaica.
Let’s examine the seven credit cards we think are ideal for automobile rentals. Some credit cards are preferable to others because they offer better insurance coverage or perks.
Top pick: Capital One Venture X Credit Card
You won’t find a better card than the new Capital One Venture X regarding rental vehicle perks since it provides access to elite status, more comprehensive coverage, and a wealth of reward chances with every rental. Suppose you use your Capital One Venture X Card to reserve a car. In that case, you’ll be covered by primary rental insurance for up to $75,000 in damages.
Capital One Venture X cardholders also receive complimentary President’s Circle elite status with Hertz Gold Plus Rewards. Compared to the status or discounts offered by some cards with Avis and National, or even a lower level with Hertz, this one is difficult to match.
You can bypass the counter and go to your rental vehicle if you have this status. In addition, when you reserve an intermediate car or above at some airports, you’ll get your pick of any available vehicle in the President’s Circle row. Your car will be upgraded to the next class at no cost to you in most other places.
In addition, you can get 10 miles for every dollar spent on car rentals through the Capital One Travel Portal. The potential earnings from each rental are enormous, amounting to 10% back toward future trips.
If you trust up to four other people with your credit card information, you can give them their free Venture X Card so they can enjoy the same perks you do.
Spend $4,000 on purchases during the first three months of opening your Capital One Venture X Card account and receive 75,000 bonus miles. There is a $395 annual fee for the card.
Best benefits: American Express Platinum Card
Car rental discounts at National, Avis, and Hertz are all yours for the taking with a single card, but enrollment is necessary.
If you opt for National, you will be promoted to the Executive Level in the company’s prestigious National Emerald Club. Select cities in the U.S. and Canada provide a “pay for a midsize, pick from a full-size or above” deal, whereby you reserve a midsize car but get to pick from any full-size or above vehicle in the Executive section. As a bonus, you’ll accrue free rental days more quickly, save paying for a second driver, and gain access to exclusive member-only offers and discounts.
Your Avis account will be upgraded to the Preferred Plus level. You can skip the counter and get right to your booked car at most rental car agencies to save time. You’ll also get free upgrades, extra points for every rental you pay for, and special access to sales and promotions.
Instead of an elite tier, Hertz provides a corporate discount code that could help you save money on your next rental.
However, unlike the other cards on this list, this one does not instantly upgrade your car rental status to primary. Instead, the card’s insurance is secondary, so you’ll still need to contact your primary insurer first. (Except in the states of Utah and Vermont, where it takes precedence.)
If you plan on paying for your next car rental with your American Express Platinum card and would want primary coverage, you can do so by purchasing “Premium Car Rental Protection.” You’ll have one price for your whole rental period, including up to 42 days of protection (Washington is an exception, where you are covered for up to 30 consecutive days). There are two levels of protection, and you can choose between them anywhere you go (except while driving a rental car in Australia, Ireland, Israel, Italy, Jamaica, or New Zealand).
Currently, new cardholders of the American Express Platinum can get 100,000 Membership Rewards points after spending $6,000. There is a $695 annual charge, but the card offers a plethora of enticing perks in exchange (check the rates and fees here).
Lowest fee: Chase Sapphire Preferred
The Chase Sapphire Preferred Card offers similar perks as the Sapphire Reserve, including primary car rental insurance and the ability to collect travel rewards, but at a far more reasonable annual cost. The Chase Sapphire Preferred Card’s $95 annual fee is quite affordable compared to other options on our list.
The payment amount is the primary differentiator between the two types of coverage. Unlike the Chase Sapphire Reserve, which offers $75,000 in coverage, the lower-cost Sapphire Preferred only reimburses you for the vehicle’s actual cash worth in the event of an accident.
Although the card does not offer any elite status advantages with vehicle rental agencies, it does provide a free 12-month subscription to DoorDash (activation required by December 31, 2024) and a $50 statement credit for hotel stays booked via Chase Ultimate Rewards for each account anniversary year.
With the Chase Sapphire Preferred, you may earn 5 points for every dollar spent on travel, including car rentals, booked with Chase Ultimate Rewards. You’ll still be making a respectable number of points each time you rent a car because you’ll earn 2 points per dollar on all other travel expenditures.
The Chase Sapphire Preferred now gives a sign-up bonus of 60,000 bonus points after splurging $4,000 on the card within the first three months of ownership.
Best rental card for small businesses: Ink Business Cash Credit Card
The Ink Business Cash Credit Card is an excellent choice if you frequently travel for business and need a credit card with travel protection. The primary rental car insurance coverage that comes with the Ink Business Cash card is a great perk, especially considering there is no annual cost.
The card’s primary coverage includes personal rentals made in other countries, a huge perk.
When renting a car, this is one of the only business credit cards that won’t cost you an arm and a leg every year, making it a must-have for every entrepreneur.
Best earning potential: Chase Sapphire Reserve
Rental car coverage of up to $75,000 is included with the Chase Sapphire Reserve as primary insurance. This card, along with the Capital One Venture X, is a terrific choice if you place a premium on having comprehensive insurance coverage on your credit card.
In addition, the Chase Sapphire Reserve card comes with exclusive deals and discounts from several vehicle rental agencies. Get upgraded to Executive Status with National Car Rental’s Emerald Club and enjoy perks like unlimited complimentary upgrades to larger vehicles, faster progress toward free rental days, and the ability to include a second driver to your reservation at no extra cost when traveling in the United States or Canada. In addition, you will be eligible for benefits and discounts.
You will receive complimentary Avis Preferred status, which entitles you to discounts and upgrades, as well as additional advantages when renting a car from Silvercar.
You may earn 10 points for every dollar you spend on a car rental through the Chase Ultimate Rewards travel portal. However, whether you book through the car rental business or a third-party site, you will still receive 3 points for every dollar spent. According to the frequent flyer website The Points Guy, Chase Ultimate Rewards points are worth 2 cents each, so you may earn a 20% bonus on your vehicle rental with just 50,000 points.
The annual charge of $550 is indeed steep, but the money you save on automobile rentals will more than make up the difference. The $300 yearly travel credit with the Sapphire Reserve card can be applied to any trip expense, including vehicle rentals. You can earn the annual $250 statement credit with just a few vehicle rentals during the year, making the card’s annual fee $250. You can get up to $100 in statement credits for Global Entry or TSA PreCheck, free access to airport lounges, purchase protection, travel protection, and more.
If you sign up for the Sapphire Reserve credit card and spend $4,000 in the first three months, you’ll get an 80,000-point sign-up bonus.
King of travel credits: U.S. Bank Altitude Reserve Visa Infinite Card
Regarding elite status perks, the U.S. Bank Altitude Reserve is on par with the American Express Platinum in terms of what it delivers. Both cards include National Emerald Club Executive level, Avis Preferred Plus status, and some Gold Plus Rewards perks with Hertz. Moreover, you’ll get a 30% discount on Silvercar rentals with no limitations.
However, primary car rental insurance is a significant perk of this card that the American Express Platinum lacks.
The card’s high $400 annual charge is more than made up for by the many benefits it provides. You will get up to $325 annually in immediate credits that you can use on qualifying travel and eating expenses. This effectively reduces your annual charge from $365 to $75 due to how simple it is to get your reimbursement.
In addition, there are no foreign transaction fees, a 12-month Priority Pass Select membership that grants you four visits to airport lounges (or participating restaurants), and a statement credit of up to $100 toward the application price for Global Entry or TSA PreCheck every four years.
No annual fee: Chase Freedom Unlimited
It’s lovely to know that you may get car rental benefits with a credit card that doesn’t have an annual fee, given that some credit cards have annual fees that can cost hundreds of dollars. Suppose you rent a car beyond the United States and use your Chase Freedom Unlimited credit card. In that case, you will still be covered by Chase’s primary auto rental insurance.
The catch is that a fee is applied each time the card is used outside the country. When deciding whether or not to decline the car rental company’s insurance alternatives, you should consider the savings against the cost.
Secondary liability coverage is provided for domestic car rentals in the U.S. This implies that your coverage will begin once all other insurance plans, including your own, have been exhausted.
Extra 1.5% cash back on all categories, up to $20,000 in the first year, is offered as a sign-up bonus with the Chase Freedom Unlimited credit card.
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