Dedicated to Deposits: Deals, Data, and Discussion
Featured Savings Rates
Featured Accounts
Back to Credit Cards

Credit Cards and Rental Car Insurance

Monday, April 26, 2010 - 7:00 AM
The blog GoodFinancialCents interviews the founder of NerdWallet, one of the top credit card sites. The interview includes several useful credit card tips. Here's one:
If you get into an accident, only Diner’s club will act as your primary auto insurance. [...] other credit cards that cover rental insurance only act as secondary insurance, meaning you must file a claim with your auto insurance first, and the credit card will pay for some of the other stuff up to a certain point.
Ken TuminKen Tumin5,441 posts since
Nov 29, 2009
Rep Points: 123,675
1. Monday, April 26, 2010 - 4:07 PM
The most common misconception about credit card rental car insurance is what it covers.  Most people think it covers the same thing as regular car insurance.  It only covers damage to the rental car itself.  It does not cover injuries to the people inside the rental car.  It does not cover damages to any other vehicle or property involved in the crash.  It does not cover injuries to the driver of the other car or any pedestrian that was hit.  All it covers is damage to the rental car.


Too may people turn down liability insurance thinking they are covered by their credit card.  In most states rental car companies must provide the state minimum liability coverage which was set 50 years ago when a visit to the emergency room cost $25.  If you have your own insurance policy, it may or may not extend liability coverage to you when driving a rental car.
AnonymousAnonymous2,281 posts since
May 9, 2010
Rep Points: 3,784
2. Tuesday, April 27, 2010 - 6:28 PM
Most rental firms offer three types of coverage

CDW - collision damage waiver - essentially a write off in case of damage to the rental vehicle

PAI - personal accident insurance - covers injuries sustained when driving the car

PEC- personal effects coverage -  reimburses in case of theft or vandalism


The credit card program brochure does state that their coverage is secondary to your auto policy.
AnonymousAnonymous2,281 posts since
May 9, 2010
Rep Points: 3,784