Credit Card Rental Car Insurance Can Pick Up Where Traditional Auto Insurance Coverage Ends
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Credit Card Rental Car Insurance Can Pick Up Where Traditional Auto Insurance Coverage Ends

Your card’s collision-damage waiver may help, if you understand its limits

July 31, 2025

Many premium and business credit cards include a collision-damage waiver (CDW) when you pay for a rental in full with the card. That perk can save you hundreds if the rental car is damaged or stolen, but only if you follow the card’s rules and know its exclusions.

Primary vs. Secondary CDW

Primary CDW pays first, so you won’t need to involve your personal auto insurer (and risk a rate increase). Cards such as Chase Sapphire Reserve®, Capital One Venture X℠, American Express Platinum, and many corporate cards now offer primary coverage in the U.S. and abroad.

Secondary CDW only covers what your own auto policy does not, typically your deductible, towing, loss-of-use fees and administrative charges. If you don’t carry personal auto insurance, some rental agencies will accept your card’s CDW as primary—but policies and acceptance vary by agency and country.

How to Trigger Your Card’s CDW

  • Charge the entire rental to the eligible card (rental fees, taxes, surcharges).
  • Decline the rental agency’s collision/loss-damage waiver (CDW/LDW).
  • Be the primary renter/driver and rent under the maximum-day limit (usually 15–30 days).

What’s Covered, and What’s Not

Most credit-card CDW plans cover:

  • Physical damage to or theft of the rental vehicle
  • Towing and loss-of-use fees up to your card’s limit
  • Reasonable administrative or processing charges

They typically do not cover:

  • Bodily-injury or third-party liability
  • Personal belongings inside the car
  • Damage to tires, windshields, undercarriage, roof or electronics
  • Claims arising from prohibited uses, off-road, reckless driving, unlisted drivers
  • Exotic, luxury, cargo or specialty vehicles (check your issuer’s exclusions)
  • Diminished-value, administrative or loss-of-use fines beyond policy caps

Filing a Claim

For secondary CDW, file first with your personal insurer; then submit any balance to your card issuer. For primary CDW, alert your issuer directly:

  • Rental agreement showing CDW was declined
  • Receipt proving full payment on the covered card
  • Police or incident report (if theft or vandalism)
  • Repair or replacement invoice from the rental agency

Before You Rent

  • Call your card’s benefits number to confirm primary vs. secondary status and geographic or vehicle-type exclusions.
  • Ask about maximum rental duration and claim-filing deadlines (often 30–60 days after return).
  • Keep photos and originals of all rental documents and damage reports.

When to Buy Agency Coverage

If your card offers limited CDW, excludes your destination, or you need liability protection, consider purchasing:

  • Collision/Loss Damage Waiver (vehicle damage or theft)
  • Supplemental Liability Insurance (third-party injury/property damage)
  • Personal Effects Coverage (protects personal items inside the car)

By verifying your card’s CDW benefit in advance, understanding its gaps, and preparing your documentation, you can avoid surprises and make the most of this valuable, but often misunderstood—perk.