Having primary rental car insurance can save you time, money, and stress - here are the top credit cards that offer it

Rental Car Companies At Seattle-Tacoma International AirportTravelers walk past rental car companies at Seattle-Tacoma International Airport in SeaTac, WashingtonREUTERS/Jason Redmond

  • While secondary car rental insurance is a nice credit card benefit, primary insurance is even better. It's available on the Chase Sapphire Preferred Card, the United Explorer Card, and several other cards.
  • Primary insurance steps in to cover damage or theft of a rental car without you having to file a claim through your personal auto insurance policy.
  • This saves renters in both the short and long term, because filing through your own insurance has the risk of raising your premium.
  • It's important to remember that primary car rental insurance usually covers loss and damage, but not always liability. Always make sure to read the terms and conditions so you're aware of any limitations.

Many people already know that they have some kind of rental car coverage on at least one of their credit cards. Rental car insurance is a great benefit because it can save users significant money in the case of an accident, damage, or theft to the rental car. But most people don't know that there are two types of car rental insurance - the details live where easily overlooked information always does: in the fine print.

Primary vs secondary car rental insurance

There are, in fact, two kinds of rental car insurance that come with many popular rewards credit cards.

The first, and most common, is secondary insurance. Like its name suggests, secondary rental car insurance offers coverage benefits, but it's only secondary to your personal auto insurance policy. Many of these benefits allow you to decline the Collision Damage Waiver (CDW) and/or the Loss Damage Waiver (LDW). Doing so saves you about $10-$35 in charges tacked on to the cost of the rental.

While secondary car rental insurance is great, it is limited. In the event of damage or theft, car renters still have to file a claim through their personal auto insurance policy, and the secondary insurance is there to cover a portion of leftover costs. So, although this is a nice perk, it doesn't ease the sting of auto insurance premiums rising, which can happen depending on your policy. If this were to happen, you would probably wish you just opted for the CDW and LDW from the start.

That's why it's ideal to have a credit card with primary car rental insurance. Primary car rental insurance is the gold standard of car rental benefits, and it's available on many credit cards. Primary car rental insurance means that coverage for loss or damage will be taken care of by the credit card company, without you having to make a claim with your personal policy. In the long run, this could save a car renter significantly on both CDW and LDW, and it could help avoid raising premiums on their personal auto policy.

What to keep in mind when using a credit card with primary car rental insurance

There are some important things to remember to get the most out of your credit card's car rental insurance benefits. For starters, you must pay for the entire transaction with the credit card you'd be filing the insurance under. Some cards even require that renters are booking the entire trip on the card, so read the fine print carefully.

Second, check to see whether this primary insurance includes liability, or damage to other cars, damage of personal property, personal bodily injury, and injury to other persons. It is definitely important to check on that one.

Third, check for not-so-obvious limitations on coverage. For example, if you're traveling between countries, you will need to know if the coverage extend to those areas.

In addition, some primary insurance benefits have limited rental periods, so check how long your coverage lasts.

Perhaps the most unexpected limitation is on the type of car. Before assuming you're covered, check to see if your car has any constraints on make and model.

Top credit cards that offer primary car rental insurance

Chase Sapphire Preferred - This is a great travel rewards card with a reasonable annual fee of $95. It earns 2 points per dollar on travel and dining purchases, and 1 point per dollar on everything else. It's currently offering a sign-up bonus of 60,000 Chase Ultimate Rewards points after you spend $4,000 in the first three months.

Chase Sapphire Reserve - This is the more premium sibling of the Sapphire Preferred Card. It has a $450 annual fee and includes high-end benefits like a $300 annual travel credit, a Priority Pass Select membership for airport lounge access and 3x points earnings on travel and dining (excluding the $300 travel credit). It's offering a sign-up bonus of 50,000 points after you spend $4,000 in the first three months.

United Explorer Card - If you travel with United a few times a year, this card can be worth it thanks to benefits like a free checked bag and access to additional saver-level award space. It's offering a sign-up bonus of 40,000 United miles after you spend $2,000 in the first three months, and it has a $95 annual fee that's waived the first year.

Ink Business Preferred Credit Card - This card has one of the highest sign-up bonuses among Chase cards: 80,000 Chase points after you spend $5,000 in the first three months. Chase's other Ink business credit cards, including the Ink Business Unlimited Credit Card and the Ink Business Cash Credit Card, also offer primary rental car insurance. Just note that you need to be renting a car for business purposes in order to receive the rental car coverage with these business credit cards.

Once you know the important details of your trip, you can call or chat with your credit card issuer to find out if you're covered with your card's benefits. Remember to be clear about 1) where you're going, 2) what type of vehicle you are renting, and 3) how long you plan to rent it.

Click here to learn more about the best current credit card sign-up offers.

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

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