The Four Types of Car Rental Insurance and Credit Card Benefits

Collision damage waiver (CDW) is a common benefit that comes with some credit cards. Depending on the credit issuer and the type of card you have, it may be primary or secondary.

Primary CDW

Primary CDW means that when you rent a car, the card will cover any damages to the car. Be sure to read your benefits guide because there are often exclusions pertaining to vehicle type, length of rental, and country.

Secondary CDW

Secondary CDW means that if you have car insurance, the credit card CDW will sometimes cover damages to the car that aren't covered by your personal car insurance. You'll have to make a claim with your own auto insurance, then any excess would be covered by the credit card CDW. There are sometimes exceptions to coverage, so be sure reference your credit card's benefit guide. 

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Types of insurance when renting a car

When you rent a car, rental agencies will often try to sell you four different types of insurance:

  1. CDW
  2. Liability Insurance
  3. Roadside Assistance
  4. Personal Accident Insurance

Important: Although some agencies will try to sell you a "basic" (CDW+PAI+RA) or "full" (everything) package as a sales tactic, you can always buy each insurance product separately. Just ask. 

I don't recommend purchasing insurance from a third-party site because often times there is fine print, and you may have to pay a deductible. 

Liability Insurance

Liability covers any damages to a third party. A credit card does NOT cover liability insurance.

Accidents happen, and if you drive a car without liability insurance, you could end up footing an unexpected bill.

If you don't own a car, be sure to purchase liability insurance from the rental agency in case there is an accident. 

Roadside Assistance

Roadside assistance is a service that helps if you need a tow truck, replace a flat tire, jumpstart, or run out of gas. 

Some credit cards include roadside assistance as a free service. Read our blog post here to compare roadside assistance from credit cards or watch the video below. 

Personal Accident Insurance

Personal accident insurance covers any medical, ambulance, or death benefits for the renter and passengers of the rental car if there is an accident. 

Some credit cards offer emergency medical and dental benefit that covers ambulance services, hospital charges, and treatments. Be sure to check your card benefits guide to see if your credit card offers this service, and what the limitations are. 

Bottomline

Always check your card's benefits guide to see if you're covered for CDW, roadside assistance, and personal accident insurance. Liability could be covered under your personal auto insurance (depending on the policy), and you can always buy it separately from the rental agency.

Risk Minimum Setup

  • CDW
    • Find a card with primary CDW
  • Liability 
    • Buy this from car rental agency
  • Roadside assistance
    • Find a card with roadside assistance
  • Personal accident insurance
    • Find a card with emergency medical