Rental Car Insurance: Pay With Credit and You're (Probably) Covered

by Michael on Dec 11, 2012 · 4 comments

Photo of Man Handing Over Car Keys

Have you ever been tempted to buy car rental insurance? You know, so you can just turn in the keys and walk away if anything bad happens?

Well… In case you haven’t figured it out by now, there’s a fair chance that such coverage is redundant (not to mention overpriced).

I say this for two reasons. First, your own car insurance likely covers rentals that are using in place of the insured vehicle. Second, if you rent a car with a credit card, then you’re likely covered by the card issuer.

Curious as to what’s covered? Read on.

Visa car rental insurance

Visa covers theft or damage plus any administrative or loss-of-use charges that are imposted by the rental agency. Note that, if your regular car insurance policy provides coverage, then Visa’s coverage only reimburses you for the deductible. This coverage applies to all drivers on the rental agreement.

To qualify, you have to pay for the entire rental with your eligible card and refuse the agency’s coverage. There are, of course, a number of exclusions, so be sure to check out their full policy.

MasterCard car rental insurance

Like Visa, MasterCard covers damage or theft if you pay with an eligible card (but not all cards are eligible, so be careful). The coverage is secondary to any other coverage that you might have, and it extends to all drivers on the rental agreement. MasterCard covers loss-of-use but, unlike Visa, does not cover administrative fees.

Here again, there are a number of exclusions. However, they only provide a brief overview on their website so you’ll have to call them at 1-800-MC-ASSIST for full details related to their coverage.

Discover car rental insurance

Like Visa and MasterCard, paying for your car rental with a (non-student) Discover card means that you’re covered.

Unlike Visa and MasterCard, Discover provides coverage for collisions only, and it’s limited to $25k (and secondary to any other coverage you might have). And, unfortunately, the coverage only applies to the person named on the Discover card. Discover also covers loss-of-use, but not administrative fees.

While most of their exceptions (beyond the above) are similar to those of the other card issuers, it’s worth noting that Discover’s coverage is also limited to the United States and Canada. For additional details, check out their policy.

American Express car rental insurance

And last but not least, American Express…

AmEx covers theft and damage like Visa and MasterCard (plus loss-of-use and administrative fees), but limits the coverage to primary and secondary cardholders. As with the other cards, you have to pay in full with your eligible card.

There are a number of exclusions associated with Amex’s coverage and there are also some differences in coverage for different card types. Thus, you’d be well advised to call 1-800-338-1670 for details.

A few miscellaneous notes…

For starters, things like personal injury or liability are not typically covered by any of the card issuers. Also, this sort of protection is generally limited to credit cards, so be aware if you’re renting with a debit card. And finally, yes, credit card car rental insurance typically applies to rentals through Priceline or Hotwire.

1 Edward Antrobus December 11, 2012 at 10:46 am

And of course, the rental company will try to scare you into getting their insurance anyway. Last time we rented a car, we had to decline their coverage three times.

2 MoneySmartGuides December 11, 2012 at 8:15 pm

Just be careful. There are some countries where you actually have to buy insurance. I traveled to Ireland and my car insurance didn’t cover me. I called American Express and they don’t provide coverage in Ireland either. Through a lot of research, Mastercard used to cover you in Ireland, but no longer.

3 AverageJoe December 13, 2012 at 9:35 am

You’re right on with the “exceptions” discussion above. It’s uncommon, but there are some horror stories about people falling into the exceptions pit and having a horrible experience with the car company after an incident.

Different from Edward above, though, I haven’t had any issues with people trying to force coverage on me. Maybe it’s because I look pretty determined when I say “nope.”

4 UAPhil January 15, 2014 at 2:05 am

Caveat: Business credit cards may not offer the same coverage as personal cards. For example, my personal Starwood Preferred Guest (SPG) Amex provides coverage worldwide (with a few exceptions such as Ireland) but my biz SPG Amex card covers me in the US only (unless I pay extra for international coverage).

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