Do You Need to Purchase Insurance When You Book a Rental Card With Credit Card Rewards?

Know your coverage before you rent

A couple drives a rental while on vacation in Colorado.
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Adam Hester / Getty Images

You’ve been saving your credit card rewards points for months and months to finally book a trip, and you’re all set to go. You use your points to pay for a car rental and, at the last minute, you remember your card has rental car insurance. Great—but does it still apply since you booked the car with points instead of cash?

Car Rental Insurance Generally Still Applies to Rewards Bookings

The good news is that, in most cases, a rental you book with points is covered if your card comes with a collision damage waiver (CDW). For example, if you use points from your Chase Sapphire Preferred card to book a car rental for your next Hawaiian vacation, you’re covered by your card’s CDW policy as long as you meet the coverage requirements.

You’ll still need to meet the other general requirements, which include:

  • Pay for the entire rental with your card (using points, in this case)
  • Decline the rental car company’s optional insurance
  • Follow the coverage rules, such as not driving illegally or renting a type of vehicle that’s not covered

Most vehicles rental companies offer are covered by CDW policies. But, some policies don’t cover certain types of autos, including luxury vehicles, cargo vans, and pickup trucks.

Card Issuers That Allow CDW for Points Purchases

In our research for this article, The Balance reached out to eight major credit card issuers. Four companies responded with their policies for CDW and points bookings. 

Chase

Any Chase credit card that offers CDW will provide CDW for rentals booked with points. The coverage applies to purchases in which you use points to cover some of the cost and charge the rest to your card. 

Chase cards that offer CDW include the Chase Sapphire Preferred, Chase Sapphire Reserve, and Chase Freedom Unlimited.

American Express

American Express offers the same coverage rules as Chase. Car rentals you book with Membership Rewards points are covered by the card’s CDW.

A few of the cards that offer CDW include the American Express Gold Card, the American Express Cash Magnet, and the American Express Blue Cash Preferred.

Barclays

Barclays cards that provide CDW will cover rentals booked with points, but all of Barclays’ current card offerings offer rewards points linked to travel programs or brands (more on that in a moment).

Citi

Only two Citi cards offer CDW coverage for rentals booked with points: the Costco Anywhere Visa and the Costco Anywhere Business Visa.

Watch Out for Co-Branded Credit Cards

Things get a little trickier with co-branded credit cards. These are cards where banks partner up with other companies—commonly with airlines, hotels, and cruise companies. 

The points you earn typically go straight to the loyalty account you have with the travel company. And for that reason, any car rental bookings you make from your loyalty programs generally aren’t covered by your card. 

For example, let’s say you have the Marriott Bonvoy Brilliant card from American Express. If you charge the cost of the car rental to your card, you’re covered by that card’s CDW. But if you instead book a car rental with Marriott points you earned with the card, your rental car coverage doesn’t apply. 

If there’s ever any doubt in your mind whether you’re covered by your card’s car rental insurance when you book it with points, give them a quick call to check. It’s worth the time it takes to give you peace of mind so you’re not worrying during your trip. 

Primary vs. Secondary Coverage

If your card’s CDW policy is primary coverage, you can file a claim without involving your car insurance company. Primary coverage is considered a more valuable perk than secondary coverage, but few cards offer it.

If your card offers secondary coverage for its CDW policy, you’ll need to file a claim with your own insurance first before you can get any extra money from your card’s insurance provider. 

Is Car Rental Insurance From Your Credit Card Enough?

Collision damage waivers—like their name implies—only protect you from damage to the car itself, not other cars, property, or physical injuries. 

If you have your own car (and a car insurance policy to go with it), this will generally provide liability coverage for any cars you rent, too. But if you don’t have your own insurance, you’ll need to think about where else you can get these additional insurances, whether from a travel medical insurance policy, the rental car agency itself, or someplace else. You’ll need health insurance, too, in case you sustain injuries. 

Key Takeaways

  • Car rental CDWs generally still cover bookings you make with rewards points. 
  • If you have a co-branded card, your reward booking usually isn’t covered by the CDW. 
  • If you’re ever unsure whether your card’s CDW applies, it’s best to check with your issuer.