How A Rental Car Is Covered By A Credit Card

Oscar Wong/GettyImages; Illustration by Hunter Newton/Bankrate

Speak to any rental car company employee before renting a car, and you’ll surely be asked if you want to purchase extra insurance. But at $15 to $30 a day (typically), buying this additional coverage is like paying $5,000 to $11,000 a year to insure your car.

Thankfully, you may be able to receive similar coverage through your credit card. In fact, rental car coverage may be one of the most valuable benefits offered by some credit cards. However, it’s important to understand how this coverage works, and what its limitations are.

Key rental car statistics

Key rental car statistics

• • The global car rental market size was valued at $149.87 billion in 2024 and is projected to reach $278.03 billion by 2030. (Grand View Research)
  • In 2023, there were 3,362 car rental companies in the U.S. (Consumer Affairs)
  • Three companies hold 94% of market share in the rental car industry: Enterprise Mobility (which owns National and Alamo), Avis Budget Group (which owns Budget, Payless Car Rental and Zipcar) and Hertz (which owns Dollar and Thrifty). (Consumer Affairs)
  • The car rental market in North America accounted for 36% of the global market revenue in 2024. (Grand View Research)
  • 48 million Americans, or approximately 18% of Americans over the age of 18, used a car rental service in 2023. (Consumer Affairs)
  • The average cost of a rental car has increased by $35/day since 2019, in large part due to the effects of the COVID-19 pandemic. (Hertz)

What is car rental insurance?

Whenever you rent a car, you should always have insurance that covers at least theft or damage. If you own a car, then your personal car insurance might cover you when you rent a car in the U.S. Nevertheless, you might not want to rely on your personal coverage, or you might need coverage when you rent outside of the country.

Many credit cards include a form of coverage called an auto collision damage waiver at no additional cost. When you pay for your rental car with your credit card and decline the optional insurance, this coverage can take the place of the expensive policies sold by rental car companies.

Do credit cards cover rental car insurance?

Rental car insurance is a benefit found on certain credit cards, usually higher-end travel cards. This benefit might be called something like “auto rental collision damage waiver” and typically provides reimbursement for damages caused by theft or collision of a rental car.

The best way to find out if your credit card includes rental car coverage is to call the number on the back of your card or read the most recent version of the card’s benefits guide.

How rental car insurance works

1. Check to make sure that your credit card offers rental car coverage.
2. Review the card’s benefits guide to ensure that the coverage applies to the type of car you’re renting and, if renting outside the U.S., the country you’re renting in.
3. Reserve your car using the credit card that offers you coverage.
4. Decline the optional damage and theft insurance sold by the rental car company.
5. Pay for your entire rental using the credit card that offers you coverage.
6. Abide by the rules of the rental car agreement.
7. If your rental car ends up damaged due to collision, theft, or any other incident covered by your credit card’s insurance, file a claim with your credit card company or the benefit administrator. Check your credit card’s benefits guide for the full list of documentation needed, any deadlines to follow, and detailed instructions on how to file a claim.

Credit cards that provide rental car insurance

Here are some of the best credit cards that provide rental car insurance:

• Chase Sapphire Preferred® Card: Provides reimbursement for damages caused by theft or collision up to the actual cash value of most rental cars. This coverage is primary.
• Chase Sapphire Reserve®: Provides reimbursement for damages caused by theft or collision up to $75,000. This coverage is primary coverage.
• Capital One Venture X Rewards Credit Card: Reimburses you for damages caused by theft or collision up to the actual cash value of rental vehicles with an original manufacturer’s suggested retail price of up to $75,000 when new. This coverage is primary.
• The Platinum Card® from American Express: Provides coverage for damage to or theft of a rental vehicle, up to $75,000, in a covered territory. This coverage is secondary.
• American Express Gold Card: Provides coverage for damage to or theft of a rental vehicle, up to $50,000, in a covered territory. This coverage is secondary.
• Bilt Mastercard®: Reimburses you up to $50,000 if a covered accident or theft occurs to the rental car. In the U.S., this coverage is primary (except for New York residents, for whom this coverage is secondary). Outside the U.S., where this benefit is available, this coverage is primary even if you have another insurance policy.

Types of rental car insurance

It’s important to note that credit cards offer different types of rental car coverage, usually in the form of primary or secondary coverage.

Keep in mind that all of the rental car policies offered by credit cards generally only insure the car you’re renting against theft and damage. If you are responsible for damage to another vehicle, injure a person or cause any other property damage, then any rental car coverage provided by your credit card won’t cover these losses.

Top rental car companies in the U.S.

According to the J.D. Power 2024 North America Rental Car Satisfaction Study, National ranks the highest in overall customer satisfaction. Here’s how J.D. Power ranks the top 10 rental car companies:

Additional ways credit cards cover your travel

Rental car insurance is just one of many types of travel insurance perks that can be offered by your credit card. Other benefits may include trip delay insurance, trip cancellation and interruption coverage, lost luggage coverage and medical coverage.

Many credit cards also offer roadside assistance coverage. With this coverage, you can call to receive help when your car breaks down, but you’ll have to pay for any services received. However, some credit cards provide basic services (like lockout service or changing a flat tire) at no extra cost.

Bottom line

A credit card with rental car insurance can save you money while traveling, as it keeps you from having to buy a separate policy from your rental car provider. Every card has its own coverage policy, but generally covers damages caused by theft or collision of a covered rental vehicle. Be sure to read your card’s guide to benefits to understand the terms and conditions of your coverage, including coverage limits, any limitations to what types of vehicles or what locations are covered, whether the coverage is primary or secondary and how to file a claim.

FAQs

• Should I pay for car rental insurance on a rental car?

  You should always have rental car insurance, but there’s no need to pay extra for it if it’s included as a benefit of your credit card.

• Does my credit card cover third party liability?

  No, the coverage offered by credit cards typically only covers the rental car, not any damage to third parties.

• Does credit card insurance cover another driver?

  Yes, the credit card usually covers all other authorized drivers.

For more travel tips & tricks, check out Bankrate’s travel toolkit.