How does credit card rental car insurance work?


Often, credit card companies offer the added benefit of "free" rental car insurance when you use the credit card to rent a car. The type of car insurance offered by the credit card will vary from company to company and from card to card.

The credit car rental insurance will pay for the damage the rental car will sustain due to a collision or theft (if this is included in the cover). Usually, this cover works like a secondary insurance, kicking in when your primary insurance exceeds its benefit limit.


Most of the coverage provided by credit cards work on a reimbursement basis, which means you must first shell out the money to get the repairs and then submit the receipts when you make your claim. The insurance will pay you up to the maximum limit for covered events.

No Loss of Use or liability

The car insurance will not pay to rent another car while your damaged rental car is being repaired. Nor is liability included in the cover.

Some Qualifications

Here are some qualifications on credit card rental car insurance:

  • The person named in the credit card should be the primary renter of the car, and at the time of the accident, you must be the one driving. If someone else is driving, it depends on the policies of the insurance carrier if they will cover it or not.
  • The insurance is limited to certain types of cars. It will not cover for cars that exceed a specified dollar amount. It will also not cover for cars such as recreational vehicles, sports cars, limousines or antique cars.
  • Driving limit. The cover is only limited to the driving range specified in the rental agreement. If you drive beyond that limit, the rental car will not be covered.
  • Country where you are renting the car. There are only a number of countries where the credit card car insurance is offered or allowed.

The important thing for you to do before you say yes or no to any car insurance offers from the rental car company is to know exactly what is being covered by the credit card rental car insurance. Be sure to call your credit card company to get the details, even before you go travelling and renting a car.

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