Home Uncategorized Simplifying Your Credit Card’s Complicated Auto Rental Collision Damage Waiver

Simplifying Your Credit Card’s Complicated Auto Rental Collision Damage Waiver

Pay with the right credit card and be covered in the event of a rental car accident or theft.

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Simplifying Your Credit Card’s Complicated Auto Rental Collision Damage Waiver
Pay with the right credit card and be covered in the event of a rental car accident or theft.
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Most insurance-based credit card benefits are rather complicated and convoluted, and the auto rental collision damage waiver benefit (Auto Rental CDW) is no different. All premium credit cards featured on CreditCardPro come with some type of car rental protection, but not all are created equal. Here, we break down the fine print to help you understand a major money-saving benefit of your credit card—the auto rental collision damage waiver.

First, what is an auto rental collision damage waiver?

When you rent a car, you are offered a variety of optional coverages for the duration of your rental period. Typically the principal—and most expensive—coverage is a “Collision Damage Waiver” (CDW) or a “Loss Damage Waiver” (LDW), which covers the cost of repairs or the value of the rental car in the event of an accident or theft. Once a claim is filed, the credit card will pay out up to a published maximum that typically caps out at the MSRP of the rental car.

The waiver does not cover personal liability, personal injury or injury to any other parties, third-party personal property, or damages to other cars or other property. So, basically, it’s coverage of the vehicle itself, so you don’t have to pay out-of-pocket to fix or replace the vehicle if someone else hits you, breaks into the rental car, or steals the rental car.

How much does an auto rental collision damage waiver typically cost?

The price of the CDW/LDW depends on the make and model of the vehicle chosen as well as the location of rental car pickup and drop-off. For example, the LDW for a February 2018 rental of an intermediate-size car with Avis at Cancun International Airport in Mexico is $51.00/day, an economy-size car with Avis at Miami International Airport is $30.99/day, and a standard SUV with Avis at Boston Logan International Airport is $34.99/day. At a minimum, for a week rental, you’re looking at a cost in excess of $150.

How can I get an auto rental collision damage waiver through my credit card?

When you pay for your rental car with your premium credit card, are listed on the rental contract, and decline the rental company’s CDW/LDW, you are automatically covered for rental collision damage protection. Pro Tip: You must decline the CDW/LDW at the rental counter or when booking online in order for your credit card’s protection to kick in. If you accept, you will lose your credit card’s implicit coverage.

What is the difference between primary and secondary auto rental collision damage coverage?

It’s important to note the two different categories of coverage with the auto rental collision damage waiver—primary and secondary.

Cards offering primary coverage will cover all costs associated with a valid CDW/LDW claim, meaning you won’t have to go through your personal car insurance (and will avoid facing higher insurance rates in the future).

Cards offering secondary coverage will cover the amount that your personal/business policies do not. This means you’ll need to go through your personal/business automobile insurance first and see what it will cover. After, you can file a CDW/LDW claim with your credit card to pick up the excess. In some cases, the secondary insurance will cover deductibles you may have to pay under your personal or business car insurance policy, and valid administration and loss-of-use charges not covered by your applicable automobile insurance policy.

To complicate things further, some cards offer secondary coverage on rentals within the United States but primary coverage on rentals outside the United States.

Can I rent any kind of car, anywhere in the world and for any period of time, and get the auto rental collision damage waiver through my credit card?

There are several restrictions to the waiver that should be noted.

Not all vehicle types are covered, though the most common rentals—from compact cars to premium SUVs—are. Most specialty vehicles like full-sized vans, antique cars, commercial mini-vans, super high-end car makes, motorcycles, and off-road vehicles are excluded from the CDW/LDW benefit.

Though this benefit applies in most foreign countries, some credit card companies will not apply the CDW/LDW benefit in specific countries. It’s best to quickly call the card’s Benefits Administrator or the number on the back of your card before renting a car abroad, just to be sure. For example, American Express cardholders cannot take advantage of this benefit in Australia, Italy, or New Zealand. And excluded countries for U.S. Bank Altitude Reserve Visa Infinite® Card members include Israel, Jamaica, the Republic of Ireland, and Northern Ireland.

Finally, most credit cards stipulate that rentals be less than 31 consecutive days in order to receive coverage.

What’s the short on the auto rental collision damage waiver for each of our featured premium credit cards?

Below is a brief summary for our core cards. The best in class here goes to the Chase Sapphire Reserve®, which offers primary coverage up to $75,000.

American Express Gold Cards
Type of Coverage: Secondary
Coverage period: 30 consecutive days or less within or outside country of residence
Amount covered: Up to $50,000

Chase Sapphire Preferred®
Type of Coverage: Secondary (within the United States); primary (outside the United States, if your automobile insurance does not cover you abroad)
Coverage period: 31 consecutive days or less within or outside country of residence
Amount covered: Up to $75,000

Chase Sapphire Reserve®
Type of Coverage: Primary
Coverage period: 31 consecutive days or less within or outside country of residence
Amount covered: Up to $75,000

Citi Prestige® Card       
Type of Coverage: Secondary (within the United States); primary (outside the United States). Pro Tip: This coverage also applies when booking a rental car using ThankYou points.
Coverage period: 31 consecutive days or less within or outside country of residence
Amount covered: Up to $100,000

Luxury Cards: Mastercard® Black Card™, Mastercard® Gold Card™, Mastercard® Titanium Card™
Type of Coverage: Secondary (within the United States); primary (outside the United States, if your automobile insurance does not cover you abroad). Pro Tip: This coverage also applies when booking a rental car using reward points earned through the Luxury Cards.
Coverage period: 31 consecutive days or less within or outside country of residence
Amount covered: Up to $50,000

The Platinum Card® by American Express
Type of Coverage: Secondary
Coverage period: 30 consecutive days or less within or outside country of residence
Amount covered: Up to $75,000

U.S. Bank Altitude Reserve Visa Infinite® Card
Type of Coverage: Primary
Coverage period: Rentals of 15 consecutive days or less in country of residence; 31 consecutive days or less outside country of residence
Amount covered: up to $75,000

What about protections and coverages beyond CDW/LDW offered through the rental car agency?

Beyond the CDW/LDW, other policies offered at the time of rental typically include some type of personal accident insurance, personal effects insurance, and sometimes third-party liability insurance (which protects you from claims made against you as a result of an accident that’s your fault). Many choose to decline these insurances based on the coverage already provided by personal medical insurance and homeowner’s insurance. Before accepting or declining these insurances, call your insurance agent to find out what you already have covered.

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Award-winning travel writer and economist Paul Rubio is a credit card enthusiast, whose sophisticated use of points and rewards has helped him travel to 132 countries for free. Paul is a Harvard graduate with a master’s degree in public administration and a master’s degree in economics. He also holds a bachelor’s degree from Boston University with a double major in economics and environmental policy and a minor in conservation biology. He attended both undergraduate and graduate schools on full scholarships. Paul worked in the field of wildlife conservation before embracing his writing talents full-time in 2008. Since then, he has won more than two dozen national awards for his exemplary work in travel journalism. The prolific writer contributes to a number of top-tier international, national, and regional publications including Condé Nast Traveler, Florida Design, Fodors.com, Palm Beach Illustrated, and Robb Report.