Should I Decline Insurance Coverage For My Rental Car?

Since the holidays are approaching, many travel during this time and rent cars at the airport. When you approach the rental counter, the usual procedure is for the rental agent to ask if you want car rental insurance.  Most are pushy and try to convince you to pay for the insurance. They know the chances of accidents with rental cars are low and how profitable the insurance is.  If you decline, the agent will ask you the amount of deductible on your auto insurance policy, and if your deductible is high, they will inform you that any scratch or dent will come out of your pocket.  If you decline their insurance, you must sign a Collision Damage waiver.  This can make you really question, if you are making the right decision.

Benefits with credit cards

Are you aware that many credit cards offer supplemental car insurance that can make the car rental insurance unnecessary?  Of course, you have to charge the full amount of the rental on that credit card to get the benefits. You need to know the coverage you have before you travel, and review what is available from each of your credit card Issuers (if you have more than one card). Then you are prepared when you arrive at the rental counter and you can, hopefully, decline their insurance coverage.

Keep in mind, most credit cards don’t cover exotic cars, pick-up trucks, and full sized SUVs.  Most credit cards apply your auto insurance first, but you must have collision insurance.  The credit card policy will cover your deductible and may pay for towing and the rental company’s loss of use fees. Some of the elite credit card programs give you coverage without having to use your auto insurance at all.

For example, American Express constitutes the apex when it comes to benefits like car insurance. Discover, Chase and Visa also offer superior products in this area.

Also, read >  Save Money on Car Insurance by Shopping Around (It’s not as scary as you think!)

Before you accept the rental insurance, it is to your advantage to know what coverage your credit card offers.  You could save yourself some money.

JRU on 60 Mins SetCredit Reporting Expert, John Ulzheimer, is the President of Consumer Education at, the credit blogger for, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.