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Many Chase and AmEx cards can save you money on your next car rental — here’s how
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Car rental companies are going to try to get you to pay for their insurance, but you are probably already covered with the credit card you used to pay for the rental.
Some credit cards — like the Chase Sapphire Preferred Card, Chase Sapphire Reserve, and Ink Business Preferred Credit Card — have better insurance coverage than others.
In addition to rental insurance, cardholders can use rewards for travel expenses like rental cars.
Most vacations come with plenty of expenses to regret. From overpriced dinners to getting fleeced on the kids' crazy souvenirs, vacations often include a little financial waste.
While some frivolous spending may be part of the adventure, other expenses like paying for car rental insurance is like flushing hard earned cash down the toilet. Buying rental insurance through your car rental company can add more than $40 to your daily rate, according to the Department of Insurance, Securities, and Banking, making that "great deal" you scored online not so great anymore.
Rental agents will probably try to sign you up for insurances like the collision damage waiver (CDW), which covers any damage to the car. But it doesn't stop there. You'll also be asked if you want liability coverage for any medical costs to the passengers in the other car, personal accident insurance to cover medical expenses to you or your passengers, and personal effects coverage for theft.
Each policy adds more money to your bottom line, however if you paid for your car rental with a credit card, you are probably already covered for at least some of it. Plus, if you have personal auto, homeowners, and/or medical insurance, none of these insurances are necessary.
What a credit card may and may not cover
Most credit cards offer either primary or secondary car rental insurance. Primary coverage means your credit card takes over coverage before your personal auto insurance kicks in, assuming you hold a personal auto insurance policy. The biggest benefit to primary coverage is your personal auto insurance premiums shouldn't be impacted in the event you get into an accident. Cards that offer primary coverage pay for damage or theft to the rental car, some cards for the cost of the car and others for a specific amount.
Secondary insurance through your credit card kicks in after your personal auto insurance provides coverage, but becomes primary if you don't have personal auto insurance. While secondary cards offer protection, most cover damage or theft costs up to a certain amount. Most credit cards offer secondary insurance so you should check with your cardholder to learn what your card offers.
What may not be covered through your credit card?
You are likely to be on the hook for liability if you cause the accident and damage to people in the other car, but your personal car insurance may cover these expenses. If you don't have a personal auto insurance policy, it could be worth purchasing the rental agency's liability insurance even if you skip the collision coverage.
If you are injured in an accident, your health insurance or personal injury protection through your auto insurance may provide coverage. But check all policies first because some personal auto and health insurance policies may not provide full coverage. In those cases, you may want to consider coverage through the car rental company.
Also, if you plan to rent a car in a foreign country you may not be covered and some types of vehicles, like a luxury sports car or motorcycle, may also not be insured through your credit card. If you plan to rent a car for an extended amount of time, your credit card may not provide coverage past a certain number of days, too.
Finally, don't forget to read the fine print in your credit card disclosure for any exclusions to your coverage.
Which credit cards provide strong coverage (and then some)?
Depending on how often you travel, you may want to consider one credit card over another. Some cards come with benefits that extend beyond providing simple coverage, so explore some of these credit cards if renting a car is in your future.
Primary vs. secondary coverage
Not all cards offer identical car rental insurance and some are more generous than others. Because secondary coverage could possibly bump up your personal car insurance premiums if you make a claim, you'll benefit more from a card that offers primary coverage like Chase Sapphire Preferred Card, which covers the actual cash value of the vehicle. Chase Sapphire Reserve also offers primary coverage up to $75,000 of the damage or theft to the vehicle.
Other cards that have primary coverage include Ritz-Carlton Rewards, which isn't currently accepting new applications, and which covers up to $75,000 in damage. Or, you can pay for primary coverage with any of your American Express cards; we like The Platinum Card® from American Express for the tremendous amount of value it offers to offset its annual fee.
Business travelers should consider Ink Business Preferred Credit Card, which offers primary protection as long as you are using the vehicle for business purposes.
Beyond insurance coverage…
You can earn double the points on travel, which includes car rentals, with the Chase Sapphire Preferred, plus 50,000 points if you spend $4,000 within the first three months of opening the card. That shakes out to about $625 for travel if you book through Chase Ultimate Rewards. This card has an annual $95 fee, which is waived the first year.
The Chase Sapphire Reserve is a little more of a robust rewards card. You can still earn 50,000 points if you spend $4,000 within the first three months, which comes out to $750 toward travel through Chase Ultimate Rewards. This card offers three times the points for that car rental, plus a $300 annual travel credit, which helps to offset the $450 annual fee. Savings for frequent travelers may also completely offset the fee too.
If you don't currently have an American Express card, one of the best current offers is for The Platinum Card from American Express, which comes with 60,000 points after you spend $5,000 on purchases in the first three months. The card has one of the highest annual fees of any consumer credit or charge card — $550 — but as AmEx's flagship product, this premium credit card offers a tremendous amount of value to offset that fee. For example, Insider Picks senior reporter David Slotnick got more than $2,000 worth of value in his first year with the card.
Business travelers earn 80,000 points after they spend $5,000 during the first three months with Ink Business Preferred. Points are worth 25% more when you book travel through Chase Ultimate Rewards, which means those 80,000 extra points are worth about $1,000. You also earn three times the points when you pay for travel or other business purchases.
Finally, regardless of coverage, you should always snap a few pictures of the vehicle when you pick it up and drop of off in case there is a dispute over damage.
Click here to learn more about the Chase Sapphire Reserve from Insider Picks' partner: The Points Guy.
Click here to learn more about the Chase Sapphire Preferred from Insider Picks' partner: The Points Guy.
Click here to learn more about the Ink Business Preferred from Insider Picks' partner: The Points Guy.
Click here to learn more about the AmEx Platinum from Insider Picks' partner: The Points Guy.
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