If you’re planning to hit the road this summer, check your wallet first. If you have the right credit card, you can save up to $50 a day by not having to add insurance.
Buying all the various insurance policies and waivers once you hit the car rental desk will set you back between $18 and $46 a day, according to finance research site ValuePenguin. But many credit cards already cover this expense. If you're surprised to hear that, you’re not alone: Less than half of Americans know about credit card rental car insurance, according to a new survey by WalletHub. Here's the rundown.
Which cards offer coverage?
In general, most credit cards will cover common issues like theft, auto accidents and towing costs if the rental car breaks down. All Visa and American Express cards provide a loss damage waiver with coverage of $50,000 and in some cases more. This LDW coverage — sometimes called a collision damage waiver or an excess damage waiver — will allow you to avoid paying if your rental car is vandalized, stolen or damaged in an accident, though it won't cover injuries to other parties or to you.
Gold, platinum, world and elite Mastercard credit cards also offer up to $50,000 LDW coverage. Discover used to offer this perk but stopped providing this benefit on its credit cards in March.
If you are planning to travel, is the Capital One Venture Card. It offers the best value for both frequent and average travelers, according to our analysis. Plus, the credit card provides both auto rental collision damage waiver and travel accident insurance.
How does it work?
Before you book a rental car, first call your credit card company to double-check your coverage and limits. And remember that, to take advantage of the car rental insurance provided by your credit card, you’ll need to put the car in your name and pay for the entire rental using that card.
Additionally, WalletHub recommends avoiding truck, SUV, van and luxury car rentals if you’re planning to rely on the insurance offered by your credit card, since most only cover incidents up to $50,000 and these vehicles can be significantly more expensive.
The duration and destination of your trip also matters. WalletHub found that 38 percent of credit cards only cover insurance for domestic trips of up to 15 days. All Citi and Chase credit cards, including , do provide global coverage.
What if you don’t have the right card?
If your credit card doesn’t offer rental car insurance, you still may be covered if you have regular car insurance. If you have collision or comprehensive coverage on your car, and it’s of similar value, you’re likely covered if you get into an accident in your rental car. However, it’s worth noting that, if you’ve already filed a claim in the past year, filing a second claim could significantly increase your insurance rates.
You can also generally skip buying a personal accident insurance policy if you already have health insurance, since this type of policy will cover any medical costs for you or your passengers get in an accident. Again, call your insurance company before booking any rentals to get the final word on what’s covered and what’s not.
If you don’t have a qualifying credit card or regular auto insurance, you will need to purchase rental car insurance before getting behind the wheel of a car — or just get an Uber.
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