Wednesday, January 7th, 2015, 9:25 am
-Find more posts like this by clicking on the “Credit Card Posts” tab and find credit card offers in the “Credit Cards” tab above of the DansDeals banner at the top of this site.
Car rental companies love to upsell insurance options when you rent a car.
Most are bogus. but 2 are legitimate. There’s liability insurance and there’s the collision damage waiver insurance or CDW.
No credit card covers liability insurance.
When you drive in the USA you need to have liability coverage which covers damage to other people and their property. If you own a car and are insured you’ll be covered when you rent a car in the US, so there’s no need to take out liability insurance. If you don’t own a car you can rely on the state minimum liability that the car rental agencies are required to provide free of charge. However you can be on the hook if you cause damage in excess of the minimum requirement, so you may want to take out that coverage if you don’t have a personal car insurance policy. Note that in California and Texas there is no state minimum liability, so any damage you cause will be your responsibility.
In some countries, like Israel and Mexico, you are always required to pay for liability insurance.
Many credit cards provide CDW insurance. That covers damage that occurs to your rental car. However most cards only provide secondary coverage in your home country, which means that if you have your own car insurance you would have to file a claim with them and only if they deny it will the credit card cover the damage.
AMEX cards have the option to add a premium car rental insurance option that changes coverage from secondary to primary, but that will set you back about $20 per rental.
2 popular Chase cards provide free primary CDW coverage even in your home country, the Chase Sapphire Preferred and the Chase United Explorer. If you damage your rental car then those cards will cover the damage without having to file a claim with your personal auto insurance policy.
Both cards have no foreign transaction fees.
The Sapphire Preferred also gives double points on car rentals, making it the best card to use when renting a car anywhere in the world.
Most cards exclude CDW coverage in select countries such as Israel and Jamaica. All Chase cards provide coverage worldwide, including Israel. Just call the number on the back of your card to be connected with the CDW insurance department who can provide you with a letter of coverage to provide the car rental agency in any country that you specify.
In a country like Israel you’ll still need to purchase liability insurance, but you won’t have to pay the CDW insurance. Which is a good thing as the basic CDW insurance in Israel comes with a high deductible, so even if you pay the daily CDW fee you may still wind up paying for the small scratches that car rental companies in Israel love to charge to everyone without ever repainting their cars.
With CDW coverage insurance from your credit card there is no deductible as long as you decline to take out the CDW coverage from the car rental agency. You won’t be responsible for a thing as long as you use the right card.