How does rental car insurance through credit cards work?

Credit card rewards are great, offering cardholders everything from cash back with every purchase to travel perks. Some credit card networks go beyond rewards to offer other types of benefits, like rental car insurance. 

Learn more about credit card rental car insurance, how it works and what it covers.

What you’ll learn:

• Some credit card issuers offer cards with rental car insurance.

• Credit card rental car insurance may cover things like damage to the vehicle and towing. 

• In some cases, credit card rental car insurance can work as a supplement to personal auto insurance. 

• Credit card rental car insurance may offer comparable coverage to the optional collision damage waiver (CDW) your rental company may offer you.

• If you’re interested in a card that offers benefits like credit card rental car insurance, you can compare Capital One cards.

Rental car insurance is offered on some credit cards by the card issuer. It can offer protection to cardholders in certain situations, like when there’s damage to their rental car. But keep in mind that coverage typically differs from card to card. Coverage can also vary based on location.

When you rent an eligible car with a qualifying credit card, you may automatically receive rental car insurance. To take advantage of the insurance, you may need to do things that include:

• Paying the entire rental amount with your qualifying credit card

• Declining the rental company’s optional CDW if you’re offered it

Keep in mind that if your rental vehicle is in an accident and you’re found to be at fault, credit card insurance generally won’t cover medical expenses or damage to other vehicles. There may also be limits on the types of cars that are covered by the insurance, such as antique vehicles.

Credit card rental car insurance is typically either primary or secondary coverage. With primary coverage, credit card insurance is applied before a renter’s personal auto insurance kicks in. With secondary coverage, personal auto insurance is applied first and then the card insurance supplements it if necessary. 

What happens if a person without personal auto insurance rents a car using secondary credit card insurance? In that case, the card coverage typically becomes primary coverage. 

Here are some types of coverage the benefit may provide.

• Collision coverage: for physical damage to your rental car in case of a collision

• Theft coverage: in case your rental vehicle is stolen

• Towing charge coverage: to recover your rental vehicle if it’s towed

• Loss-of-use charge coverage: for when the rental company seeks compensation for lost rental revenue if your vehicle is damaged since it can’t be rented while it’s being repaired

To verify exactly what’s covered by your credit card network, check your card’s benefits guide.

Credit card rental insurance may be limited to situations involving only your rental car. Here are claims that may not be covered by credit card rental car insurance.

• Physical injury to you or others

• Damage to other vehicles

• Property damage to the belongings of others 

• Luggage or other items stolen from the rental vehicle

• Mechanical breakdown of the rental vehicle 

If you aren’t sure exactly what’s covered, check your card’s benefits guide.

If you don’t know whether the coverage through your card is primary or secondary, you may want to check your card’s benefits guide. 

Secondary coverage tends to be more common. But if your coverage is primary, you’ll want to start the claims process by contacting the benefits administrator or by initiating a claim online. Information on how to do this is typically found in your card’s benefits guide. Here’s how the process might  work:

1. Notify your card’s claims administrator about the incident involving your rental car, or initiate a claim online

2. Complete a claim form and provide documentation, which may include things like the vehicle rental agreement, the police report from the incident and an itemized repair estimate.

3. Receive payment for proven losses in the time frame specified by your card’s network.

Here are answers to common questions about credit card rental car insurance and rental car insurance in general:

Credit card issuers sometimes offer credit cards with rental car insurance. This benefit can be used on its own or in combination with personal car insurance to give extra peace of mind. But before you use a credit card’s insurance, you’ll want to know what it covers and whether that coverage meets your needs. 

If you’re interested in a card that offers benefits like credit card rental car insurance, consider Capital One Venture X. With Venture X, you can also earn 10X miles on hotels and rental cars, and 5X miles on flights booked through Capital One Travel.