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Does credit card insurance coverage apply to free rental car days?

by on Mon June 22, 2015 • 2 Comments


Cardholder David recently asked us “If I use Hertz points for car rental in Australia and pay taxes with my card would I have car rental coverage?”

This is a good question, as most of the major car rental companies like Hertz, National, and Avis offer some sort of loyalty program that gives you free rental days. You just cover some taxes or fees on the rental.

So it’s really tempting to take advantage of the rental car collision damage coverage of your favorite credit card when you use a free rental day.

But David has uncovered a trap that can cost you thousands if you damage your free rental.

Pretty much universally, you need to pay for a rental transaction in full with your card to activate the card’s collision damage coverage benefit.

And the card benefits administrators consider a ‘free’ day as being paid in part by the rental car company, even though you’re still using your card to pay for the fees and other charges that are part of the rental. So the coverage won’t apply.

That’s really disappointing considering you earned those free days with your paid rental activity.

While you should always call your card company directly to ask about the specifics of your card, here’s some sample language from Chase….





and American Express…


There is an alternative

First, according to reader Charles, some Citi cards are explicit that coverage applies even if there’s a rental car promotion or discount, like a free rental day, applied toward the payment, as long as you use your Citi card or points to pay for the rest. There’s no requirement for the rental to be ‘paid for in full’ with your card alone.


If not, and you have an American Express card, consider enrolling in its Premium Car Rental Protection program if you plan on using a free rental day.

For $19.95 to $24.95 per rental (not per day), you can get primary car rental damage coverage that kicks in even if you only pay part of the rental charges with your card. That means you’re covered on free rentals if you charge some amount like a fuel refill to your card.

So instead of paying $25 a day or more for the car rental company’s coverage on a 5 day ‘free’ rental, you can pay just $19.95 once and be covered on a free rental.

Otherwise the next time you use a free rental day, remember to pay up for the collision damage coverage from your rental car company or put yourself at risk of a big bill if your car is damaged. And double check to make sure the cost of a regular cash rental isn’t cheaper than paying for the coverage.

In some cases like the below example the cost of collision insurance might be more than the daily charge for the car itself.

So you’re better off just paying for the rental car with your card and getting the collision damage coverage included, which is less than a ‘free’ day plus the paying for the rental car company’s expensive insurance coverage.


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2 thoughts on Does credit card insurance coverage apply to free rental car days?


    Great site but you should have contacted Chase/Visa Signature as their interpretation is not as onerous as your reader suggests.

    I contacted them and they indicated that if the bulk of the rental is paid for by the credit card then using a coupon for 1 or 2 extra rental days does not invalidate the coverage on let’s say a week’s or even a weekend’s rental. You should always pre-clear with them and attempt to get them to commit to this in writing, but at least with the Chase Visa Signature cards that provide primary insurance coverage, free rental days likely will be covered in most situations.

    However, an entirely free rental from accumulated points and the such will NOT be covered.


      @Horace – Interesting you got that answer – we got a different one – but as always best to call directly to get a specific answer so opportunities like yours aren’t missed.


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