Primary vs. Secondary Car Rental Insurance Coverage

Consumers of all shades are clamoring for some flashy travel incentives, such as reward points. Other benefits are overlooked until they are required. Rental automobile insurance is, unsurprisingly, at the top of this second list.

While it is becoming more common for travel rewards credit cards to include some form of insurance, clients may not always understand what the coverage entails. Card reviews and ads often say that the insurance is “primary” or “secondary,” which makes things confusing.

It’s important to understand the differences between these before applying for a card because they can be substantial. We’ve got you covered, thankfully.

How Does Car Rental Insurance Work?

Let’s take a look at rental car insurance in general before we get into the variations between primary and secondary coverage. First and foremost, the renter must pay for the car with the credit card that provides the insurance. The principal renter must also be the cardholder, though other drivers will be insured if they are included in the rental contract. Lastly, the terms usually say that the renter has to say no to the Collision Damage Waiver (CDW) that the car rental company offers.

The CDW covers damage to the car in the event of an accident or theft while the car is being rented. Rental businesses use a cunning strategy to give low sticker prices for their automobiles, knowing that they can make a lot of money selling CDWs. Depending on the agency and the level of coverage provided, these plans can cost anywhere from $5 to $30 per day. You can, however, say “no” to the CDW and be sure that you are covered by the full protection your credit card gives you.

Coverage for Liability

While credit card insurance may be able to replace the CDW, it does not provide any kind of liability coverage. The CDW only protects the driver’s vehicle; it does not cover other vehicles or passengers. So, even if you have credit card coverage, you will be responsible if you cause an accident that damages or hurts the people in another car, even if you have credit card coverage.

You’ll need to acquire the rental company’s insurance at the counter (generally $15 to $20 per day), have coverage through your car insurance at home (normally only covers domestic rentals), or obtain a separate policy to have complete liability protection. Some countries, like Mexico and most of Europe, require that the rental price include liability insurance with a relatively low maximum coverage.

Primary and Secondary Coverage: What’s the Difference?

For starters, it’s worth noting that most credit cards provide rental car supplemental insurance. This means that the card’s insurance will only pay for what isn’t covered by the driver’s other policies. As a result, you must first file a claim with your other insurance. Anyone who has dealt with insurance providers knows how time-consuming the process can be.

Personal car insurance, on the other hand, is irrelevant when you have primary coverage through a credit card. The primary insurance, as the name implies, takes precedence over any other coverage the renter may have. This implies that you can begin the process of filing a claim by dialing the number on the back of your card.

Why Does It Matter?

A primary coverage card eliminates the need to file a claim with your car insurance, which would normally result in a deductible payment and an increase in your monthly rate. Primary insurance is also more likely to have favorable conditions and cover the entire cost of the vehicle. Secondary plans, on the other hand, may have lower overall coverage limits, shorter rental periods, and fewer countries in which rentals are covered.
It’s Possible That Where You Rent Is Important.

Some cards offer secondary coverage in the driver’s home country (where your existing auto policy may cover you) and primary coverage overseas. Because most personal car insurance policies do not apply outside of the United States, secondary coverage overseas will effectively operate as primary coverage. In the United States, even secondary coverage will work as primary coverage if you don’t own a car and hence don’t have auto insurance.

While a credit card insurance policy will cover the rental of a regular sedan in most countries, there are a few noticeable exceptions: typically expensive or exotic cars. Your policy may also be invalid in certain countries (for example, Jamaica, Italy, Australia, and New Zealand), and the length of your rental may be an issue. Rentals of more than two to four weeks may be excluded from coverage. Always check the terms and conditions of your credit card for the most up-to-date information.


Primary rental car insurance is a significant advantage that is typically only available with top-tier credit cards. When you decline the rental company’s coverage, it might give you peace of mind and save you a lot of money. If you ever need to file a claim, it will make your life easier by eliminating the need to file it elsewhere. This is especially advantageous in the event of a car accident, as it will not result in a rate increase on your regular auto policy. It is not, however, a substitute for liability coverage, as previously stated.
If you like the convenience of owning a car when you travel, the insurance provided by your credit card can be a great deal. Before applying for a card or going to the rental counter, make sure to look into these benefits.

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