Do you need added insurance when you rent a car?

A woman looks at her car that was just in an accident and wonders if she purchased enough additional car insurance
May 23, 2016 | Pam Leibfried

If you are a city dweller or suburbanite who doesn’t own a car, it’s likely that you occasionally need to rent a car. When you do, it’s a safe bet that the rental car agent will try to get you to pay extra for collision damage waiver (CDW) coverage – in other words, auto insurance from them – on the rental.

But if you pay for that rental with your Alliant Visa credit card, you can save some bucks by skipping the add-on insurance. That’s because paying with your Alliant Visa credit card automatically provides Rental Collision Damage Waiver coverage in case of collision or theft while you are driving the rental car.

There are some limitations to this CDW coverage, which are detailed on Visa’s website. A few of the main exceptions/limitations are:

  • You can’t rent an exotic, expensive, antique car like an Aston Martin or a Lamborghini without purchasing insurance, as they are not covered by the Rental Collision Damage Waiver.
  • Although smaller passenger vans are covered, cargo vans and larger vans are excluded. For example, if my carless niece rented a passenger van to pick up her young cousins for a weekend at Grandpa and Grandpa’s house, that minivan rental would be covered. But if she rents a cargo van to help a friend move, she would need to purchase insurance through the rental company, because the Rental Collision Damage Waiver from her Alliant Visa credit card would not apply.
  • Trucks, motorcycles, limos, recreational vehicles and any vehicles with open cargo beds are not covered.
  • Coverage extends only if you are a valid cardholder whose name is embossed on the Alliant Visa credit card – so you can’t charge the rental of a car to your Alliant Visa for your child or a friend to save them the insurance charge. The cardholder who charges the rental to his/her Alliant Visa has to be the primary renter of the vehicle. Then, coverage will also extend to any additional drivers who are explicitly permitted by the auto rental agreement. For example, if you rent a car to drive a group of girlfriends to a spa for the weekend and tell the rental agency that you will be the only driver, you are the only driver covered by the CDW. If you let one of your girlfriends drive home when the rental agreement did not include her as a driver, an accident when she is driving wouldn’t be covered. But if the rental agreement includes you and two of your other girlfriends, any of the drivers designated in the rental agreement would be covered.
  • To be covered, the rental can’t be for longer than 15 days domestically or 31 days outside your country of residence.

If you’re an Alliant Visa credit cardholder who doesn’t own a car but rents one every now and then, you should see if you can save yourself some bucks on your next car rental by skipping the add-on insurance and relying on your card’s Rental Collision Damage Waiver. Learn more on the Visa website.   

Pam Leibfried is a marketing content specialist whose love of words led to a writing and editing career. After a brief stint teaching English, she transitioned to corporate communications and spent 20 years at The Nielsen Company before joining Alliant’s content development team. Early in her work life, Pam’s friend Matt explained the benefits of a 401(k) and her dad encouraged her to start a Roth IRA. Their good counsel prompted her to prioritize retirement savings, which just might enable her to retire early so she can read more and live out the slogan on her fave T-shirt:  “I have a retirement plan: I plan on quilting."

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