The Best Credit Cards to Use When You Rent a Car

Photo (cc) by Phillip Pessar

You are standing at the desk of the car rental company and the agent asks, “Do you want the collision damage waivers?”

Uh … .

The moment of confusion

For a lot of us, this is a moment of confusion. Of course you don’t want it. It’s one more expense. In fact, the price of these damage “waivers” can nearly double the cost of your vehicle rental. (Supplemental insurance coverage offered by rental car companies is called a waiver because, when you pay for it, the company agrees to waive its right to collect for damages from you.)

But should you purchase the rental car waivers anyway, just to be safe?

You probably don’t need it. The chances are good that you’re already covered — very likely by your credit card, and probably by your personal auto insurance, too.

What you may not know, however, is that some credit cards’ rental car coverage is better than others.

How it works

Card Hub’s 2014 Credit Card Auto Rental Insurance study gets down and dirty to find the best rental car coverage. Among its findings:

  • Most credit cards automatically offer supplemental collision protection when you rent a car. But, to enjoy protection from your credit card’s insurance, you need to use your card to pay for the entire car rental.
  • “Supplemental” means your own auto insurance will be tapped first, if it provides rental car insurance. After your auto insurance coverage is exhausted, the credit card insurance kicks in. How much of the unpaid remainder it covers depends on the credit card policy’s specifics. (Don’t assume your auto insurance includes rental car coverage. Call or read the policy to find out.)

Finding a winner

If you have a Visa, Discover or American Express card, you have rental car protection. If you have a MasterCard, it depends on which financial institution issued your card. Some issuers offer rental car protection — and some don’t.

“Rental collision protection is primarily driven by the card network and not the card issuer,” Card Hub says.

It’s easy to figure out who your issuer is. If you have a Mutual of Omaha Platinum Rewards MasterCard, for example, Mutual of Omaha is the issuer. (The largest issuer of credit cards is Chase, Card Hub says.) MasterCard is the card network.

The four major credit card networks are household names: Discover, American Express, MasterCard and Visa. Nearly half of all credit cards are Visas, Card Hub says.

Card Hub stacked the big four networks up against each other, judging their rental car coverage in a variety of areas, including:

  • The proportion of a network’s cards offering rental car coverage.
  • The types of vehicles excluded from coverage. None of the networks, for example, covers trucks, vehicles with open beds, off-road vehicles or antique, expensive or exotic cars.
  • Other types of exclusions — for example, a limit on the number of days coverage applies or on the types of road surfaces you can drive on or countries in which you can drive.
  • Thoroughness of the coverage.
  • Ease of filing claims.
  • Ease of finding information about the policy and understanding it.

Who’s No. 1?

Here’s how the card networks rank, according to Card Hub’s survey. To see the scoring, go to the Card Hub study and scroll down:

1. American Express — a score of 90 percent. It was tops or tied for tops in several categories, giving it the overall winning score. However, Card Hub pointed out:

American Express is the only network not to provide coverage for renting certain popular SUVs – including the Suburban and Tahoe from Chevrolet, GMC Yukon, Ford Expedition, Lincoln Navigator, Toyota Land Cruiser, Lexus LX450, Range Rover, and full-sized Ford Bronco.

2. Discover — 88 percent.

3. MasterCard — 79 percent. Here’s proof that it pays to read the fine print on your credit card contract: MasterCard covers accidents on dirt and gravel roads only if those roads are “regularly maintained,” Card Hub says.

4. Visa — 74 percent. Among Visa’s failings: It is the only network that doesn’t cover accidents on dirt and gravel roads.

Card Hub says it contacted the card networks when it had questions:

American Express, Discover and MasterCard responded to our questions and confirmed the accuracy of our data. Visa declined to clarify issues regarding its policies despite multiple attempts to contact the company.

You’re not alone

If you’re one of the many consumers who buy rental car coverage just to be safe, your confusion is understandable.

Progressive surveyed consumers and found that roughly 20 percent said they always buy waivers when renting a car. A similar-sized group “sometimes” buys the coverage. Their reasons ranged from confusion to sales pressure.

What rental car waivers cover

Here are four types of coverage offered when you rent a car and their estimated costs:

  • Loss-damage waiver ($9 to $19 per day). Pays if your rental is damaged or stolen. If your auto insurance includes comprehensive and collision coverage, you’re probably covered already, but check first.
  • Supplemental liability ($7 to $14 per day). Liability covers damage you cause to someone else or their property.
  • Personal effects coverage ($1 to $4 per day). Compensates if your possessions are damaged in a rental car.
  • Personal accident insurance ($1 to $5 per day). Covers treatment for injuries while driving a rental car. You may already have this coverage with your health insurance or from the medical coverage portion of your auto insurance.

Learn what you have

Now that you know what rental car companies are trying to sell you, find out what coverage you already have before you’re standing at the rental counter again. It’s not as difficult as it sounds. Here’s what to do:

  • Call your insurance agent (or read your auto policy) and ask what your auto policy covers for car rentals. Also ask if there are any situations where your personal auto insurance will not kick in. Find out, too, if your policy has limitations on long-term rentals of a week or longer.
  • Call your credit card company (or read the contract you received with your card or find it online at the card issuer’s site). Find out what your card covers and what limits there are, if any, on rental car coverage.

Have you been paying for rental car coverage that you already have? Has a car rental agent scared you into buying unneeded insurance? Tell your story in the comments below or at Money Talks News’ Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
10 Ways Retailers Trick You Into Spending More
10 Ways Retailers Trick You Into Spending More

Think you’re a savvy shopper? Find out how retailers persuade you to dig more deeply into your wallet.

21 Items to Cut From Your Budget That You Won’t Even Miss
21 Items to Cut From Your Budget That You Won’t Even Miss

Start off the new year by implementing these small-but-smart savings strategies. They’ll soon add up.

10 Food Staples That Are Easy and Cheap to Make Yourself
10 Food Staples That Are Easy and Cheap to Make Yourself

Making any of these key foods yourself will improve meals — and your budget.

5 Monthly Bills You Can Easily Negotiate Down
5 Monthly Bills You Can Easily Negotiate Down

Here’s how to bring down recurring expenses and save hundreds — or even thousands — of dollars each year.

7 Ways Anyone Can Cut Their Health Care Costs
7 Ways Anyone Can Cut Their Health Care Costs

Here’s how to lower your medical expenses without skimping on care.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

How to Buy Gas At Costco Without a Membership
How to Buy Gas At Costco Without a Membership

The warehouse club often has some of the cheapest gas in town. Here’s how you can get it as a nonmember.

10 Things to Stop Buying If You Want a Clutter-Free Home
10 Things to Stop Buying If You Want a Clutter-Free Home

If you like to keep things simple, avoid these purchases.

A Simple Way to Silence Robocalls Today
A Simple Way to Silence Robocalls Today

A few steps can keep your phone from ringing when a spammer calls.

This Company Makes the Best Tires in America
This Company Makes the Best Tires in America

Driver satisfaction with tires is at an all-time high, but one brand stands out.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Vacuums from this brand can last a half-century, if not longer — and they’re hot on the resale market.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

This iconic dinnerware is prized for everyday use as well as reselling for profit.

This Health Issue Can Hint at Dementia Years in Advance
This Health Issue Can Hint at Dementia Years in Advance

One type of pain is especially associated with cognitive decline.

Can I Switch to Spousal Social Security Benefits When My Ex Dies?
Can I Switch to Spousal Social Security Benefits When My Ex Dies?

Knowing when to claim can help you maximize benefits.

Medicare Will Not Cover These 6 Medical Costs
Medicare Will Not Cover These 6 Medical Costs

Don’t let these health care expenses catch you off guard in retirement.

8 Things You Should Always Buy on Amazon
8 Things You Should Always Buy on Amazon

The giant retailer shines when it comes to these things, from basics to hard-to-find specialty goods.

Beware This Hidden Ingredient in Rotisserie Chicken
Beware This Hidden Ingredient in Rotisserie Chicken

Something foul may lurk in those delicious, ready-to-eat birds.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

5 Ways to Fill Your Pantry With Free Food
5 Ways to Fill Your Pantry With Free Food

Anyone can take advantage of these resources.

5 States With the Worst Health Care for Retirees
5 States With the Worst Health Care for Retirees

All of these states are located in the same region of the nation.

7 Big Purchases You Should Never Make
7 Big Purchases You Should Never Make

Sometimes a big-ticket purchase is nothing more than a big waste of money.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

6 Reasons You Should Stop Hiding Cash at Home
6 Reasons You Should Stop Hiding Cash at Home

Stashing money around the house is anything but harmless.

5 Products You Should Never Buy Generic
5 Products You Should Never Buy Generic

Sometimes the brand-name version is clearly superior.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.