I was in Louisiana last year visiting family. As I was driving out of New Orleans on Interstate 10, an 18-wheeler kicked up a rock that size of a small football stadium, which then slammed the windshield of my rental car with an explosion that sounded like a small bomb going off.
What I’m trying to say is: Thank you, American Express Platinum Card.
Because I’d booked and paid for the rental car with my Platinum Amex, I didn’t have to worry about the cost of replacing a windshield that, when I returned to the airport, looked like abstract art.
But American Express isn’t the only credit card these days with rental-car protection. Many better credit cards offer that benefit – though some are better than others. Here’s our take on the best cards on the market for rental car protection.
What Is a Rental Car Damage Waiver?
Let’s start with the damage waiver itself, sometimes called a Collision Damage Waiver (CDW) or a Loss Damage Waiver (LDW).
Whether a CDW or LDW, each is a promises the credit card company makes to its cardholder that if you use the card to pay for a rental car, then in the event you are in an accident or the rental car is stolen (or, in my case, damage to the car happens that’s not your fault), the credit card will step in and protect you from having to cover the entire cost. You might have to pay a small deductible, depending on the credit card or the circumstances, though not always.
You also need to be aware of something called primary coverage and secondary coverage. This determines who’s first in line to pay for the damage and the degree to which you will be involved in the process.
Primary coverage means that the credit card company takes responsibility from the moment you notify them of the accident. Once you file the claim, you’re pretty much out of the picture and the credit card company deals directly with the rental-car agency.
Secondary coverage means the credit card company will pick up whatever costs – if any – your personal auto-insurance carry doesn’t cover. This means you’ll be more involved in the process, since you will have to file a claim with your personal insurance company, and then coordinate with the credit card company to cover whatever additional costs are required.
How to Ensure That You’re Insured
Just because you have a credit card that provides rental-car coverage doesn’t mean you’re covered.
If I’d rented the car in Louisiana with, say, a debit card or cash, American Express would not have stepped up to pay for the damage even though I’ve been an Amex cardholder since 1987. To make sure that your credit card will cover any potential rental-car damage, you have to:
- Book and pay for the rental car (and typically the entire rental cost, not just a portion) with a card that offers coverage;
- Decline the LDW/CDW option that the every rental-car company offers when you reserve or pay for the rental;
- Make sure you list every driver who might drive while you’re in control of the rental car. If, for instance, your spouse is driving when an accident occurs, but your spouse wasn’t listed as a driver, then the coverage will not apply.
Also, if you’re traveling outside the US, absolutely be sure to contact the rental car company or your credit card provider in advance to make sure your credit-card coverage is valid for that country or rental-car agency, and obtain a document as proof (even if you keep it stored on your phone as a readily accessible email).
In Ireland, for instance, rental-car companies by law must add third-party coverage to a rental contract. To avoid that charge, you have to show the rental-car agency a particular document (that your credit card company can email to you) proving the card you’re using to pay for the rental does, in fact, provide coverage in the Republic of Ireland.
Trust me on this – you don’t want to get to the airport after a long overseas flight, only to have to spend an hour or more contacting your credit card company back at home (at possibly some ungodly hour in the US) and waiting for someone to email the necessary document to you.
What Are The Best Credit Cards for Rental-Car Coverage?
Let me say first that there are lots of credit cards that offer rental-car coverage, but not all are created equal in terms of what they’ll pay for.
So, here’s our take on the best:
Chase Sapphire Preferred & Chase United MileagePlus Club Card
I’m lumping these two together because their coverage is identical, though their reward structure is a bit different.
In term of coverage, each card offers you:
- Primary CDW coverage worldwide (but, again, with certain countries be sure you know if you need a document to prove coverage to the rental car agency). As primary coverage, Chase will handle everything from the getgo if you have to file a claim;
- Reimbursement for damage or theft of the rental car, up to the car’s cash value;
- Valid loss-of-use charges assessed by the rental car company;
- Reasonable towing charges;
- Rentals are covered for 31 days or less.
- The primary cardholder and any authorized users on your account (and, remember, adding an authorized user to your Sapphire Preferred account is free);
- Additional drivers listed on the car rental agreement.
What’s not covered:
- Certain luxury, antique and exotic car;
- Cargo vans, motorcycles, recreational vehicles;
- Certain countries that might be excluded by law (another to check with your credit card company or rental-car agency before you travel);
- Liability coverage.
Differences Between Sapphire Preferred and United MileagePlus Club Card.
With an annual fee of $95, Sapphire Preferred gives you:
- 2 points for every $1 spent on travel and dining;
- 1 point for every $ spent on everything else;
- 60,000 bonus points after spending $4,000 in the first three months.
With an annual fee of $450, the United MileagePlus Club Card gives you:
- 2 miles for every $1 spent on United Airlines;
- 1.5 miles for every $1 spent on everything else;
- 50,000 bonus miles after spending $3,000 in the first three months;
- Access to United Club and Star Alliance airline clubs at airports around the world when you travel (a $650 annual value)
- First and second checked bags for free for you and a companion traveling on the same reservation.
- Priority check-in, priority security screening, priority boarding;
- Complimentary elite status in Hertz President’s Circle.
Chase Sapphire Reserve
The Sapphire Reserve card offers the same primary-coverage, rental-car benefits as Sapphire Preferred, but with some differences:
The limit maxes out at $75,000. The difference here is that Sapphire Preferred doesn’t state a dollar limit, only noting it will pay, at most, the actual cash value of the rental car, so long as it’s not an exotic/luxury/antique car.
Sapphire Reserve doesn’t limit the type of care you rent, meaning at $75,000 there are quite a few exotic and luxury cars that would fall within the limits.
- 3 points for every $1 spent on travel and dining;
- $300 annual credit to reimburse certain travel expenses, such as ticket change fees or baggage costs;
- Trip delay/cancellation/interruption reimbursement;
- Complimentary Priority Pass airport lounge access globally;
- Statement credit for TSA PreCheck and GlobalEntry application costs;
- Enrollment in elite status programs for National Rental Car, Avis and Silvercar
American Express Platinum
American Express offers car-rental protection that functions differently than Chase.
With American Express Platinum, Hilton Honors Aspire American Express and the Platinum Delta SkyMiles, the car-rental coverage is secondary to your personal insurance coverage. This is not primary coverage, as with the Chase cards above.
But you have the option to enroll in the American Express Primary Premium Car Rental Protection program, which I’ll explain in a moment.
As for the secondary CDW/LDW coverage from American Express, you’re covered for:
- Damage or theft of a rental vehicle up to a maximum of $50,000 (AmEx doesn’t limit the type of vehicle you rent);
- Loss of use, appraisal fees and towing;
- Rentals of 30 days or less.
- Primary cardholders and additional drivers listed on the rental agreement;
- Authorized card users and additional drivers listed on the rental agreement.
American Express Optional Primary Premium Car Rental Protection
This is a plan you enroll in through AmEx that kicks in every time you rent a car using your AmEx card. The plan provides primary coverage, but at a cost that ranges from $12.95 to $24.95, depending on your state of residence and the protection level you select.
Note: This is a per-rental cost, not a per-day cost. Rental-car companies tend to charge you per day. Also, once you enroll, the charge is automatic anytime you rent a vehicle using your enrolled American Express card. Just be sure you decline the optional LDW/CDW the rental-car company offers.
With this protection plan, AmEx becomes your primary insurer in case of damage or theft to the rental car. And coverage will extend to 42 days instead of 30 or less.
The Best Citicards for Car Rental Coverage
Citi has recently revamped the benefits baked into its range of credit cards, and one of the changes is that Citi has essentially dropped car-rental coverage.
If you want solid, primary car-rental coverage when you travel (and you’re not renting Lamborghinis and Ferraris and such), the most affordable option is the Chase Sapphire Preferred card at $95 a year.
If you want added perks, such as airport club access, then your best option depends on the air carriers you regularly use. If you’re a United/Star Alliance fan, then you’ll want the United MileagePlus Club card. If you’re loyal to Delta and the SkyTeam alliance, then stick to the American Express Platinum Delta SkyMiles card.
And if you’re an American Airlines/oneworld traveler … well, you’re out of luck in terms of a card specific to AA’s Aadvantage program. That’s the Citicard universe. Instead, you should probably look to a standard American Express Platinum card. But then You’ll have to jump through hoops by transferring your AmEx rewards points to British Airways or Cathay Pacific (oneworld members) and then book reward flights on American.