When renting a vehicle you’re faced with several decisions. Should I get that GPS, prepay for gas, or take that automatic toll-paying sensor? Should I spend a few extra dollars and get the full-size car?

The decisions are many…and the salesperson is a professional at the up sell.

One of the most expensive decisions to make is whether to opt for the rental car company’s collision/loss damage waiver coverage.  This coverage can cost as much as $30 per rental day, and you may have a difficult time opting out of it.  In the worst-case scenario, you might opt out and have something happen to your rental. You could be out thousands of dollars until you resolve the issue between the rental car company and your insurance company.  Even then, you could be left with a high deductible to pay.

However, there is some available relief to this — and you may already have access to the solution! By knowing the extent of any car rental coverage, you have on your credit cards, you can save yourself stress and a lot of money.

While the collision damage waiver (CDW) (or loss damage waiver/LDW, as it is sometimes called) is not technically insurance, it functions similarly. And it can also be just as confusing!

In this article we’ll cover:

  • What is collision damage waiver coverage
  • Which credit cards offer the best protection
  • What you need to know to file a claim

Let us get started with our overview of credit card rental car coverage and look at some of the best credit cards to use when renting a vehicle.

What Is the Car Rental Collision Damage Waiver?

The Car Rental Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW) is coverage that reimburses you for damage to your rental car or theft of the car while the vehicle is in your custody.  It can also cover “loss of use” of the rental car, which car rental agencies can charge you if the vehicle is damaged or stolen. (Since the vehicle would not be available to rent out, the agency could be losing revenue and pass this loss on to you.)

Car rental companies require you to purchase CDW/LDW coverage before you take possession of the rental car unlessyou have the coverage elsewhere.  And sometimes they want to see it, or they make you take their insurance.

Primary vs. Secondary Coverage

While many credit cards offer CDW coverage, there can be a significant difference in how the coverage functions.

  • Secondary CDW Coverage: If your credit card offers secondary CDW coverage, you will need to first file a claim with any other available insurance before the secondary coverage kicks in.  This means your car insurance carrier
  • Primary CDW CoverageProvides coverage without the need to file a claim with other insurance. If an incident happens, the primary coverage applies.

Hot Tip: Note that coverage on the same credit card can be secondary in certain countries and circumstances while primary in others. Check with your card’s benefits administrator for specific questions.

Requirements to Ensure Coverage

For the CDW coverage that is offered on credit cards to be valid, most credit card coverage requires the following:

  • Reserve and pay for your rental car with the qualifying credit card
  • Decline the rental car company’s CDW/LDW coverage
  • List all drivers on the rental agreement

Make sure you know the requirements before you rent a vehicle and call the benefits administrator if you have questions.  You can even ask for a letter showing your CDW coverage to show when renting a vehicle.

Bottom Line: Your credit card guide to benefits will be awfully specific in explaining the definition of the card’s particular CDW coverage. It will also provide clear information on where and when coverage is secondary or primary. 

I use Personal Amex Gold credit card for car rental insurance coverage.   The cost is $250.00 a year and to get the insurance you must call American Express and ask to be put on their rental program.  The fee for Florida is $15.00 per rental up to 40 days. For Texas, the fee is $25.00 per rental for 40 days. (check this if renting for more than 30 days with American Express as it can change.

American Express Car Rental Coverage

American Express is unique in its offering of CDW coverage on its credit cards. The card issuer offers both complimentary secondary CDW that comes with their credit cards, and primary Premium Car Rental Protection that can be purchased.

  • Standard complimentary secondary CDW coverage included with its credit cards
  • The option to enroll your credit card in advance for primary Premium Car Rental Protection that is automatically applied when you use the card to rent a vehicle

American Express Complimentary Secondary CDW Coverage

Complimentary CDW is included on most American Express credit cards. But for the complimentary CDW coverage to be effective, the following must be done:

  • Reserve and pay for the entire car rental with the qualifying American Express card
  • Decline the car rental company’s CDW/LDW coverage

To find out if your American Express credit card has complimentary CDW coverage, review your benefits and find out I do not recommend any complimentary insurance.

What’s Covered

  • Damage or theft of a rental vehicle up to a maximum of $50,000
  • Loss of use, appraisal fees, towing
  • Rentals of 30 days or less

Who’s Covered

Drivers covered for CDW under the complimentary coverage on your credit card include:

  • Primary cardholders and additional drivers listed on the rental agreement
  • Authorized users and additional drivers listed on the rental agreement

For CDW coverage to apply, the car rental must be reserved and paid for with the American Express card.

Exclusions

  • Cars rented in Australia, Italy, New Zealand, or any OFAC listed country (due to economic or trade sanctions)

American Express Optional Primary Premium Car Rental Protection

To purchase Premium Car Rental Protection, you will need to enroll your American Express credit card in advance of your car rental. Once you use your card to reserve and pay for the car rental after enrollment, the coverage is charged to your card and becomes effective for that rental term.

This coverage is primary when purchased, meaning you do not need to submit a claim with another insurance company first. There are 2 levels of Premium Car Rental Protection available, and they range in price from $12.25 to $24.95 depending on the state you reside in and the limits of coverage you select.

The price you pay is for the entire rental period (up to 40 days), not a per day charge!

What’s Covered

  • Damage or theft of your rental car for up to $100,000
  • Secondary medical coverage and accidental death benefit for driver/passengers
  • Personal property coverage

Who’s Covered

  • The primary cardholder and drivers listed on the rental agreement
  • Authorized users and accompanying drivers listed on the rental agreement

What’s Not Covered

To access the terms/conditions of the basic CDW coverage that comes with your American Express credit card, view the guide to benefits for all 58 cards here. To register your American Express card for Premium Car Rental Protection, visit the registration page.

Hot Tip: If you are renting a vehicle for more than 30 days, the Premium Car Rental Protection for purchase with your American Express credit card is a great value. You receive primary CDW coverage for pennies per rental day and are covered for up to 40 days. 

American Express offers both complimentary CDW coverage with their credit cards and premium coverage you can purchase. Image Credit: American Express

Best Personal Chase Credit Cards for Car Rental Insurance Coverage

Chase excels in offering car rental coverage by providing worldwide primary CDW coverage complimentary with its credit cards.

Receive complimentary Hertz elite status with the United MileagePlus® Club Card. Image Credit: Hertz

1. Chase Sapphire Preferred® Card

What’s Covered

The Chase Sapphire Preferred and any Chase credit cards offering CDW coverage come with primary coverage. This means you will not have to worry about filing a claim with your auto insurance company if something should happen to the rental vehicle.

You can expect the following coverage worldwide with your Chase credit card:

  • Reimbursement for damage or theft of the rental car up to the actual cash value of the vehicle
  • Valid loss of use charges assessed by the rental car company
  • Reasonable towing charges
  • Rentals are covered for 31 days or less

Who’s Covered

  • Primary cardholders and authorized users
  • Additional drivers listed on the rental agreement

Hot Tip: There is no charge for adding an authorized user to the Chase Sapphire Preferred, and they receive the same primary CDW coverage when renting a vehicle with their card! Keep in mind that authorized users driving a vehicle rented by the primary cardholder do need to be listed as a driver to be covered. Read more about maximizing car rental insurance benefits with the Chase Sapphire Preferred.

What’s Excluded

  • Certain luxury, antique, and exotic vehicles
  • Cargo vans, motorcycles, recreational vehicles
  • Certain countries may be excluded where prohibited by law
  • Liability coverage

2. Chase Sapphire Reserve®

The Chase Sapphire Reserve comes with the same worldwide primary CDW coverage as the Chase Sapphire Preferred, but with a maximum of $75,000 coverage for the rental vehicle.

The most compelling reason to use the Chase Sapphire Reserve for your rental car is that you can pay for the rental with Ultimate Rewards Points and receive 50% more value for your points!

With this card, you also receive elite status with National Car Rental and Avis, plus a 30% discount on Silvercar rentals.

Bottom Line: Chase credit cards are a great choice to use when renting a car because they offer complimentary worldwide primary CDW rental car coverage for rentals of 31 days or less. 

General Tips for Filing a CDW Coverage Claim

The first step when your rental car is in an accident or stolen is to call the benefits administrator.

You’ll be asked some questions and sent a claim form to complete.

Be aware that when submitting a CDW claim, you will have deadlines to meet, documentation to gather, and a responsibility to follow up.

Hot Tip: Since most claims will be processed on a reimbursement basis, you will likely have plenty of incentive to get your claim processed quickly!

Know the Deadlines

There will be specific deadlines at each step of the process, which you should familiarize yourself with. Here are a few to look out for:

  • Reporting the claim
  • Submitting the completed claim form
  • Submitting all required documents

Gather All Relevant Information

Don’t forget to gather information when the accident/theft happens — some items may be difficult to obtain later. Here’s what you might need:

  • Copy of the entire rental agreement
  • Copy of the accident report from the car rental company showing the amount you owe
  • Police report
  • Photos of the damage

Follow up With Additional Needed Documents

If the claim administrator asks for anything else, make sure to provide it right away. For example, they might request:

  • Copy of your credit card statement showing that the rental was paid for with your qualifying credit card
  • Repair estimates

Ask for Assistance

If you have trouble getting the required documents, ask the claim administrator for help.

Final Follow Up

It is your responsibility to make sure all of the required documentation is received by the claim administrator on time and is completed to their satisfaction.

Generally, if you have primary CDW coverage or secondary CDW coverage with no current auto insurance, the claim process will be straightforward.

But if you have secondary CDW coverage that applies to the rental car incident and you have auto insurance as well, you will need to report the claim to that company first.

Hot Tip: Be aware in advance of what you will need to do in case of a rental car incident, so you’ll be prepared to gather as much documentation as possible when the incident happens. Photos, police reports, and documentation from the rental car company can be impossible or difficult to obtain later.

Final Thoughts

If you have your own car insurance, the best CDW coverage for domestic car rentals is primary credit card CDW coverage.

This is because it is best to avoid filing a claim with your own insurance company, which could mean potentially having to pay a high deductible and having your rates increased.

Generally, those who carry auto insurance can get by with secondary CDW coverage when renting a car out of the country — chances are your U.S. policy will not cover you there.

The secondary CDW coverage on your credit card would then become primary.

If you do not carry auto insurance, you can get by with secondary CDW coverage, since it will act as your primary insurance in nearly all rental car situations (foreign or domestic).

You may, however, be responsible for a deductible on the car rental company’s coverage.  Call your benefits administrator for clarification of coverage before renting any vehicle.

In all cases, you should purchase liability insurance from the rental car company or be sure it is included in your rental agreement, as it is not included in CDW coverage that comes with your credit card.

If you frequently rent a car, you can save time, frustration, and money knowing the type of coverage you have with your credit cards!

Frequently asked questions

Which is the best credit card to use for car rentals?

Having a credit card such as those issued by Chase that offer primary CDW insurance is ideal.

However, if you are renting a vehicle for more than 30 days, purchasing Premium Car Rental Insurance as a cardholder of an American Express card can be a wise choice.

The Premium Car Rental Protection covers you for pennies per day and can be valid for up to 42 days.

What does primary and secondary coverage mean?

Primary CDW coverage covers you without having to file a claim with another insurance company first.

Secondary CDW coverage requires that you file a claim with your own auto insurance company (or other insurance company that applies) and exhaust any coverage there before the secondary coverage kicks in.

CDW coverage that comes with your credit card is frequently secondary, but some credit cards (such as those issued by Chase) offer primary coverage.

Additionally, some business credit cards offer secondary coverage for personal car rentals in the U.S. but primary coverage internationally.

Which credit card has the best car rental coverage if I do not have auto insurance?

If you do not have current auto insurance, ideally you should secure a credit card that provides primary car rental coverage.

With this said, many credit cards with secondary CDW coverage allow the coverage to become primary when you do not have current auto insurance.

However, when renting a vehicle, if you want to decline the rental company’s CDW/LDW coverage, you may have to show proof that you have other coverage.

You will want to contact the benefits administrator in advance to confirm that you would indeed be covered and that the coverage would default to primary.

Can I pay for the car rental with points and still have rental car coverage?

Yes. If you use points to pay for all or part of your car rental, use your qualifying credit card to pay the remainder, and then present your card at the rental car agency, you will be covered.

Keep in mind that you need to use points from the qualifying credit card to reserve and/or pay for the car rental.

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