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Secondary car insurance is a type of protection for rental cars, typically offered as a credit card benefit. The benefits you can receive with secondary insurance depend on whether or not you have a personal auto insurance policy and what it covers. Here's what you need to know.
What Is Secondary Car Insurance Coverage?
Many credit cards offer rental car insurance as a benefit, but in most cases, the coverage is secondary in nature. This means that the perk acts as a supplement to your primary auto insurance policy, if you have one.
If you get in an accident with a rental car and have secondary coverage, you'll need to first file a claim with your personal auto insurance policy provider. Your credit card's coverage will then cover what your personal policy won't, albeit with some limitations.
At the very least, it may reimburse you for your personal policy's collision or comprehensive insurance deductible. That said, secondary car insurance can be converted to primary car insurance, eliminating the need to file a claim with your personal auto insurance provider—more on that later.
What Does Secondary Car Insurance Cover?
In general, credit card rental car insurance only includes coverage for certain things, including:
- Damage to the vehicle caused by a collision
- Vehicle theft (does not include your personal belongings)
- Towing charges
- Loss-of-use charges imposed by the car rental agency while the vehicle is being repaired or replaced
It does not, however, include protection for personal injuries or property damage you may cause in an accident. Other limitations typically include a list of excluded vehicles and countries, as well as caps on rental periods and total coverage.
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What Is Primary Car Insurance Coverage?
Some of the best travel credit cards offer primary car insurance coverage instead of secondary coverage. With primary insurance, you don't need to file a claim on your personal auto insurance policy unless the card's coverage is insufficient.
However, you could qualify for primary coverage even if you have a secondary insurance benefit. In particular, secondary coverage can be converted to primary coverage if you don't have a personal auto insurance policy or if you're traveling outside the U.S. and Canada and your personal policy doesn't apply.
Primary rental car insurance coverage doesn't have a deductible, but you'll still be subject to the same limitations. So while you may not need to purchase the rental agency's collision damage waiver, you may want to consider buying supplemental liability insurance if you aren't covered by your personal policy.
Secondary vs. Primary Car Insurance Coverage
Here's a quick summary of the differences between secondary and primary car insurance coverage offered by your credit card:
- When it applies: If you have secondary coverage, you'll need to first submit a claim to your personal auto insurance policy, and your secondary insurance benefit will supplement your personal coverage. With primary insurance, however, the protection kicks in immediately.
- What it covers: Secondary insurance only offers coverage beyond what your personal auto insurance policy provides. In many cases, that may just be your personal policy's collision or comprehensive coverage deductible. In contrast, primary insurance will kick in for all covered damage, theft, towing and loss-of-use charges up to the maximum coverage amount.
- Limitations: Secondary and primary car insurance benefits typically have the same limitations when it comes to the types of losses they cover, eligible vehicles and countries, rental periods and maximum coverage amounts. That said, the details of each limitation can vary from card to card.
- Conversion: If you don't have personal car insurance or you're traveling in a country that isn't covered by your personal auto insurance policy, your secondary insurance coverage will be converted to primary coverage.
How Do I Know if My Credit Card Offers Secondary Coverage?
Some card issuers specify on a card's landing page whether your rental car insurance is a secondary or primary policy. Some may even include up-to-date benefits guides for each card on their website. However, they aren't always easy to find.
That said, the best way to find out which type of coverage your credit card offers—and the limitations you may face—is to review the benefits guide you received when you first got the card.
If you no longer have your card's benefits guide or you can't find a recent version of it online, you can call the number on the back of your card and request a new one.
The Bottom Line
Secondary car insurance offered by a credit card can provide some value, but it might not be what you think. Understanding your card's rental car insurance can help you determine what's covered and what isn't and evaluate whether or not to buy coverage offered by a rental car agency.