Extra coverage from the rental agency is an option when picking up a vehicle. That will cost you extra on top of your daily rate, of course. Find out if your credit card or existing auto rental insurance coverage will cover you before shelling out cash at the counter. The auto rental insurance offered by the car rental agency can be skipped if you use a travel rewards credit card. This article explains commercial and American Express auto rental insurance. We also give a deeper insight into what credit cards auto rental insurance is all about. Enjoy the ride!
What Is Auto Rental Insurance?
Driving a rented car in the United States is probably covered by your existing liability and comprehensive auto insurance policies. Because of this, it’s possible that the coverage you already have for driving your own vehicle will be sufficient for covering cars you rent within the country. However, if you find yourself in a situation where you absolutely must have auto rental insurance, you should know that there are other options available.
Types of Auto Rental Insurance
The following are the types of auto rental insurance:
#1. Rental Car Liability Insurance
Rental car agencies typically offer liability coverage for rented vehicles. If you cause an accident and other drivers are injured or their property is damaged, this will pay for those costs. Personal liability insurance (if the vacation is not for business purposes) will cover this. However, if you plan on cruising the streets of Miami in the company of Lamborghinis and Ferraris, you may want to increase your liability coverage limits beyond the minimum of $10,000.
Non-owner automobile insurance provides protection in the event of an accident even if you don’t own a car.
#2. Loss-And-Damage Waiver (LDW)
This is a waiver, not an actual policy, and is sometimes referred to as the collision damage waiver (CDW). If the rental car is damaged or stolen, the rental company will not pursue legal action against you. However, this may already be covered by your collision and comprehensive coverage.
#3. Personal Accident Car Rental Insurance
No matter who caused the accident, this insurance will take care of the medical costs for you and your passengers. It’s very similar to the PIP and MedPay coverage included on most conventional automobile insurance policies. Personal accident insurance is unnecessary if you have health or disability coverage. Furthermore, after meeting your health insurance deductible, your health insurance will take care of any medical expenses not covered by your personal auto insurance. A deductible is not necessary for personal accident coverage.
#4. Personal Effects Coverage
If something is stolen from your rental automobile, you won’t have to worry because this insurance has you covered. In such a circumstance, you might be able to get equivalent protection through your homeowner’s or renter’s insurance.
Things You Should Know About Auto Rental Insurance
The following are things you need to know about auto rental insurance before you dive in:
#1. There Are Four Major Kinds of Rental Car Insurance
You can choose from four different types of insurance: CDW (Collision Damage Waiver), which pays for repairs to the rental car in the event of an accident, SLP (Supplemental Liability Protection), which pays for harm done to other people or their property, PEC (Personal Effects Coverage), which protects your belongings in the event of theft, and PAI (Personal Accident Insurance), which pays for medical care for the renter and any passengers in the event of an accident.
Your requirements may change based on factors such as the rental property and the type of credit card you use. If you rent cars frequently yet always seem to forget something, sign up for the rental agency’s frequent renter program. It’s free, and agents won’t pest you about unneeded extras because your insurance selections will be recorded in a profile.
#2. If You’re Renting within the U.S, Your Existing Coverage May Be Enough
If you already have a policy for your car, your home, your health, or your possessions, you may be able to decline coverage when you go to pay for it. Also, if you have a comprehensive collision plan, your auto insurance may also pay for any damage to or theft of the rental car you incur. In the event of an accident, your own health insurance will take care of you, and if your belongings are stolen while you’re away, your renters or homeowners insurance may reimburse you.
Learn what your travel insurance covers before you leave. If you get into an accident, you’ll have to pay your deductible out of pocket, and your insurance premiums can go up as a result. Another trap to watch out for is the concept of “diminished value,” which suggests that even after repairs, the car is worth less than it did before the accident. In most cases, just the insurance provided by the car rental agency will apply.
#3. Your Credit Card May Cover Your Rental Car Insurance
It has already been established that the automatic insurance coverage offered by a number of major credit cards can save you hundreds of dollars on your next automobile rental. Our go-to travel credit cards, the Chase Sapphire Preferred and Reserve, both provide main CDW for a rental car for up to 31 days. (Liability insurance is still required, but it can be obtained through your own policy or the rental agency.) American Express provides secondary CDW that would pay for your auto insurance deductible; however, an accident would still show up on your insurance report. AmEx also offers Premium Car Rental Protection, which, depending on your demands, can cost anywhere from $12.25 to $24.95 per rental and includes main CDW, PEC, and PAI.
Credit Cards Auto Rental Insurance
However, not all credit cards provide insurance for car rentals. For instance, Discover does not offer insurance for automobile rentals. The majority of Citi credit cards no longer include this perk, too. This benefit is provided by the card network and is available to some Capital One cardholders. Many American Express credit cards come with secondary car rental coverage, and cardholders can upgrade to primary coverage with the purchase of a separate Premium Car Rental Protection policy. This perk is often included with most Chase credit cards.
Here are some of the credit cards auto rental insurance you can pick from:
#1. Chase Sapphire Reserve® and Chase Sapphire Preferred® Card
One of the best credit cards for auto rental insurance is the Chase Sapphire Reserve® or its cheaper annual fee sibling, the Chase Sapphire Preferred® Card, for your next car rental. In most countries, when you hire a car with one of these cards, you won’t need additional insurance. The maximum rental period covered by these cards is 31 continuous days. You won’t have to worry about paying out of pocket for repairs or replacement costs if your rental car is damaged or stolen since the Sapphire coverage will pay for such costs in addition to the rental agency’s valid loss-of-use fees and any necessary towing fees.
#2. PenFed Platinum Rewards Visa Signature® Card
A secondary auto collision damage waiver (CDW) is one of the Visa Signature benefits included with the PenFed Platinum Rewards Visa Signature card. This CDW reimburses cardholders for the covered theft or damage, as well as valid administrative and loss-of-use charges imposed by the auto rental company and reasonable towing charges that occur while you are responsible for the rental vehicle. You are protected for up to 31 consecutive days outside the United States, or 15 days inside your home country.
#3. Blue Cash Preferred® Card from American Express
The Blue Cash Preferred® Card from American Express includes *auto collision damage waiver (CDW) for up to 30 consecutive days, protecting you from liability for theft and/or damage to the car up to the vehicle’s value. Find out if American Express offers rental car insurance. However, terms and conditions are applied.
#4. American Express® Gold Card
Coverage for theft and damage to rental cars, up to the car’s value, is included in your American Express® Gold Card’s *auto collision damage waiver (CDW) for up to 30 consecutive days.
How Much Is Auto Rental Insurance on a Credit Card?
If your credit card offers free auto rental insurance, there’s no need to pay extra for it. However, supplementary protection may be available for purchase. American Express’s Premium Car Rental Protection, for instance, ranges in price from $19.95 per rental period to $24.95 per rental period, depending on the level of coverage chosen.
How Do I Know if My Credit Card Has Auto Rental Insurance?
Examining the card’s benefits booklet will reveal whether or not it provides coverage for automobile rentals. The list of perks may also be viewable on your online card account. If you still have questions after reading this, you may always call the number on the back of your card.
Commercial Auto Rental Insurance
There are numerous variables to consider when selecting the best commercial auto insurance policy for your company, including the number of vehicles you own, the amount of coverage you require, the nature of your business, and whether or not workers will use their own vehicles for company business.
Progressive, for example, is one of the best commercial auto rental insurance companies since it has been ranked as the finest insurer for several years running and because it insures more than 1.9 million commercial vehicles at the present time. Most business owners will be able to modify their Progressive commercial auto policy to meet their specific needs because it provides a wide variety of coverage options and discounts for nearly every type of business and vehicle.
Best Commercial Auto Rental Insurance
The following are the best commercial auto rental insurance:
#1. Nationwide
With a variety of low-cost policy options, useful extras, and deductibles as low as $0, Nationwide commercial auto insurance is our top pick for coverage. This firm has been offering insurance protection to its customers since 1926, and it now serves 48 states plus the District of Columbia.
Nationwide provides commercial vehicle insurance for cars, cargo vans, work vans, box trucks, pickup trucks, and utility trucks, but not for semis or tractor-trailers. An agent is needed to buy insurance after getting a quote online or over the phone.
#2. Progressive
This nationwide provider, recognized as the best commercial truck insurance in the United jurisdictions, ensures a wide range of vehicles, makes quotations available online, and, in many jurisdictions, allows for unlimited mileage. Insurance rates can be reduced by making seasonal policy adjustments.
#3. Farmers
Farmers is a good option for business owners searching for coverage for a single company car. This insurer offers policies to a wide variety of businesses, including protection for employees’ personal vehicles while on the clock. It offers coverage for business vehicles, including liability, uninsured/underinsured motorist, and comprehensive.
Farmers also provide insurance for unique businesses and unique types of disasters. Insurance for a food truck, for instance, can include protection against food deterioration and food poisoning in the event of an accident.
#4. The Hartford
Hartford offers many optional coverages at no extra cost, including protection for leased or borrowed vehicles, downtime loss coverage, deductible waivers for glass repairs, and electronic device coverage. The firm makes it simple to save money on your commercial fleet coverage in a number of different ways, including discounts for having numerous vehicles, paying in full, and maintaining a clean driving record. Options for insurance coverage include liability, comprehensive, collision, uninsured/underinsured motorist, medical costs, and non-owner.
American Express Auto Rental Insurance
American Express auto rental insurance, often known as car rental loss and damage insurance, is included with the majority of Amex cards, including a few business and vacation credit cards. Coverage, however, might vary greatly between different credit card types. For instance, a rewards credit card with a lower annual charge could not offer as much protection as a premium credit card with a higher fee.
If you have an American Express card (with or without an annual fee), you’re limited to no more than $50,000 in coverage. Some of Amex’s higher-end cards come with a $75,000 maximum benefit.
What American Express Auto Rental Insurance Covers
Be sure to study the fine print of your credit card to learn about the protections it offers. In most cases, you can count on having the following covered:
- Coverage for theft and damage up to the policy maximum ($50,000 to $75,000) or the vehicle’s real cash value, whichever is less.
- Towing and evaluation fees that arise outside of the scope of the repair.
The cardholder, their spouse or domestic partner, and any additional drivers named on the rental contract are all covered by American Express auto rental insurance. It’s secondary coverage, meaning it kicks in after you’ve exhausted your first options. When your own policy’s coverage limits are reached, your Amex rental car insurance may kick in.
American Express provides comprehensive car rental insurance for an extra fixed charge per hire. However, it does not apply to vehicles rented in Australia, Ireland, New Zealand, Israel, Italy, or Jamaica and only provides primary coverage of up to $100,000.
How to Get Coverage
You must make your rental car reservations and pay the whole amount with an eligible Amex card in order to activate coverage for your American Express auto rental insurance. You should also decline the rental car company’s optional accident damage waiver. After you’ve done the above and signed the rental agreement, you’ll legally own the car and be able to use your American Express auto rental insurance.
Do I Need Rental Car Insurance?
You generally won’t need to get auto rental insurance if you already have insurance on a personal vehicle. If you don’t have auto insurance on your own vehicle, most car rental agencies will provide you with the minimum coverage required by law. However, you may want to consider purchasing additional rental car insurance if you are driving internationally or for business purposes.
What Happens if You Don’t Have a Credit Card for a Rental?
Major car rental agencies typically accept debit cards, though you may be asked to provide a refundable deposit or undergo a credit check in addition to the usual procedures. However, you must charge the entire rental price to your credit card in order to take advantage of the insurance benefits.
Is Rental Car Insurance Worth It?
Instead of purchasing auto rental insurance for a brief two-week trip, it may be more cost-effective to raise your own coverage limits for an entire year. Keep in mind that the average American pays significantly less than $60 per day (or $1,800 per month) for their own auto insurance, and that includes a comprehensive policy with high limits.
Renting a car without insurance can be a costly mistake, as buying a comprehensive policy might more than quadruple your rental expenses. Also, you can skip buying insurance if you don’t want to because most rental cars come with the minimum coverage required by law. Nonetheless, there are instances where the cost is justified.
Does Your Personal Auto Insurance Cover Rental Cars?
Your own auto policy probably covers rental automobiles as well. The policies and maximums are the same as those for your primary vehicle. Make sure your company has a business auto policy if you’ll be using the car for company business.
What Happens if You Damage a Rental Car without Insurance?
If you damage a rental automobile and don’t have insurance, the bill will be on you. The state-mandated minimum liability coverage that is included with every rental automobile does not extend to paying for any damage to the vehicle that you cause while driving.
Final Thoughts
If your credit card offers auto rental insurance, you may be able to forego paying extra for it at the rental counter, saving you time and money. If you frequently rent cars, find out which of your credit cards offers coverage so you’ll know which one to use when making reservations. However, if none of your credit cards come with this benefit, it may be worthwhile to start looking into them so you can relax when driving your rental car.
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