Auto Rental Collision Damage Waiver often pops up on credit card reviews and benefit guides. But what is the car rental insurance provided by your credit card and how does it work? Here is everything you need to know about credit card rental car insurance – and if it’s worth it when you travel:
Table of Contents
At a Glance
- Auto Rental Collision Damage Waiver (CDW) with a credit card is a benefit that provides coverage for damage due to collision or theft when you rent a car using that credit card.
- CDW covers the cost of repairs, the actual cash value of the rented vehicle, and loss-of-use charges imposed by the car rental company.
- It typically doesn’t cover injury to you or your passengers, damage to other vehicles or property, or any liability you may have due to the accident.
- Not all credit cards provide CDW, so it’s important to check with your credit card issuer to see if your card offers this protection when renting a car.
How Does Credit Card Rental Car Insurance Work?
Renting a vehicle comes with the inherent risk of an accident. Car rental insurance, available at the rental counter, can help offset these fears by providing coverage in the event of an accident, vehicle theft, or another incident.
Car rental companies offer four types of vehicle insurance: liability insurance, collision damage waiver, personal accident insurance, and personal effects insurance. Credit cards typically provide collision damage waivers when the cardholder uses their associated credit card to pay the costs of renting a car and waive the additional coverage at the rental counter.
What Does Car Rental Insurance from Your Credit Card Cover?
Credit card car rental insurance is one of the most underrated benefits of a travel credit card. As mentioned, the rental car insurance from your credit card typically covers collision damage. The Auto Rental Collision Damage Waiver (CDW) frequently seen with credit cards is the same thing as collision protection. This charge is usually the most expensive item when you can opt for additional coverage at the rental counter, so getting it with your credit card is a great feature.
Some of the other items covered through CDW with your credit card include:
- Towing expenses
- Loss of use while a rental car is out of service.
- Some administrative fees
Keep in mind that not all credit cards offer the same services with their CDW protection programs. Always consult your cardmember agreement and the guide to benefits, which is usually attached.
What Doesn’t Credit Card Rental Insurance Cover?
Car rental insurance through credit card networks doesn’t cover all types of rental vehicles. The following vehicle rental types are ineligible for Visa or Mastercard CDW auto rental collision damage protections:
| Visa | Mastercard | |
|---|---|---|
| Antiques* | ❌ | ❌ |
| Expensive/Exotic** | ❌ | ❌ |
| Full-size vans | ❌ | ❌ |
| Limousines | ❌ | ✔️ |
| Motorcyicles/Mopeds | ❌ | ❌ |
| SUVs | ✔️ | ❌ |
| Trucks | ❌ | ❌ |
| * An antique car is defined as a vehicle that is over twenty (20) years old or one that has not been manufactured for ten (10) years or more. | ||
| ** Visa allows some luxury models for makers like Audi, BMW, Cadillac, Land Rover, Lexus, and more. Mastercard defines an “expensive” rental as any vehicle with an MSRP of $95,000 or more. | ||
It’s worth noting that some types of vans qualify for auto rental collision damage waiver. Vans are designed as small-group vehicles, seating up to nine (9) people, including the driver, and are covered by Visa.
Rentals in specific international locations might also be excluded. Both Mastercard and Visa, for example, do not cover vehicle rentals made in Ireland, Israel, or Jamaica. Similarly, American Express will not cover vehicle rentals in Australia, Italy, or New Zealand.
Does Auto Rental Collision Damage Waiver Work with Other Insurance?
Car rental insurance through your credit card only covers collision damage and should not be considered a substitute for your primary coverage. Instead, Auto Rental Collision Damage Waiver should be considered secondary coverage, as it will not help with the following incidents, accidents, or costs:
| Damage to any property beyond the rental vehicle | Injuries to other people | Lawsuits stemming from damage or injuries to others | Theft/loss of personal belongings |
| Medical costs associated with accidents | Special vehicle rentals, including exotic cars, antique cars, supercars, motorcycles, large box vans, or certain trucks | Many credit card auto insurance programs do not offer insurance for longer rental periods, such as more than a month | Some credit card rental car insurance won’t cover car rentals made in select foreign countries |
Personal automobile insurance or other insurance that covers theft or damage, the collision damage waiver reimburses for:
- The deductible portion of car insurance or other insurance
- Any unreimbursed portion of administrative and loss-of-use charges imposed by the rental company
- Reasonable towing charges while the car was under the renter’s responsibility
How to File a Claim
So, how can you file a claim for an incident with your rental card? Typically, the process is as follows:
| ① Rent a vehicle using your credit card with rental car coverage. |
| ② Use the same card when checking in at the rental counter. |
| ③ Decline the additional collision damage waiver offered by the rental car company. |
| ④ Pay the full cost of the vehicle rental using the same credit card. |
| ⑤ File a claim with the car rental agency should an accident occur. |
Filing a claim for rental damage varies based on the card issuer. Typically, you will need to provide specific information, which will include:
| Accident report | Vehicle rental agreement | Police report |
| Repair estimates | Photographs (if applicable) | Witness testimony (if applicable) |
Claim Filing Limitations and Key Dates
The time frame for filing a claim also varies based on the card type. Visa, for example, requires a claim to be submitted by either 15 days or 31 days after the incident (depending on the Visa product), and claim documentation must be submitted within 90 days. Visa also sets a claim limit of $50,000 on their credit cards.
Mastercard requires eligible cardholders to claim within 15 days of an accident and requires documentation within 180 days of the claim. American Express offers a 30-day window to make a claim and requires the same 180 days to submit claim documentation as Mastercard. Amex also offers extended rental car insurance for up to $24.95 per rental period, which is a great option for those planning on renting a car for a week or more.
Discover does not currently offer car rental insurance on its U.S. consumer or business credit cards.
Conclusion
The Auto Rental Collision Damage Waiver coverage offered by credit card issuers provides a convenient and potentially cost-saving option for individuals renting vehicles, as it can protect expenses related to collision damage and theft during the rental period. However, it is crucial for cardholders to thoroughly understand the specific terms, limitations, and exclusions associated with this benefit. While the coverage can mitigate the financial burden of repairing or replacing a rental car, it typically does not extend to personal injury or damage to other vehicles or property. Individuals should carefully review their credit card policy details and consider supplemental insurance options to ensure comprehensive protection while renting a vehicle.
Related Article: Credit Card Purchase Protection: Everything You Need to Know
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