Chase Freedom® Rental Car Insurance [2021 Guide]

The Chase Freedom Flex℠ and Chase Freedom Unlimited® both offer insurance coverage for the financial cost of damage or theft to a rented vehicle. However, coverage through the collision damage waiver (CDW) is secondary insurance — it only kicks in after other forms of insurance (like your personal car insurance).

That’s why those who use rental cars more often may be better off with the Chase Sapphire Preferred® Card or the Chase Sapphire Reserve®, as both of these credit cards offer cardholders primary rental car insurance.

How the rental car collision damage waiver works

The CDWs from Chase Freedom Flex℠ and Chase Freedom Unlimited® provide reimbursement for damage resulting from collision or theft up to the cash value of a vehicle you rent with the card. But note that this benefit pays out only after other forms of insurance do.

The benefits guide states that the CDW will not pay for theft or damage that’s reimbursable by your own insurer, employer, employer’s insurance, or any other valid reimbursement.

That means the CDW from Chase Freedom Flex℠ and Chase Freedom Unlimited® is secondary insurance. It will only cover what your own car insurance doesn’t. In most cases, the benefit will cover your deductible, or perhaps the money you have to pay out of pocket when making a claim to your existing car insurance policy.

Other Chase credit cards provide primary insurance, which steps in before your personal car insurance when you make a claim. The Chase Sapphire Preferred® Card is one such card, but unlike the Chase Freedom Flex℠ and Chase Freedom Unlimited®, it carries an annual fee of $95.

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How to get this benefit

You receive a CDW from the Chase Freedom Flex℠ or Chase Freedom Unlimited® when you use the card to pay for the entirety of the car rental transaction and decline similar coverage from the car rental company.

Here’s the two-step process for getting a CDW:

  1. Complete the entire rental transaction using your card that’s eligible for the benefit.
  2. Decline the rental company’s collision damage waiver or similar provision if it’s offered to you. The company may refer to the collision damage waiver as a CDW or LDW (loss damage waiver) in their contract or when speaking with you. If you accept the collision damage waiver offered by the rental company, you will not be eligible for the auto rental CDW.

What’s covered?

The CDW reimburses cardholders for any covered damage or loss up to the cash value of the rental car. This benefit only covers rental periods of up to 31 consecutive days, and the entire transaction must be initiated and completed on your Chase credit card.

Here are some of the common covered losses:

  • Physical damage and theft of the covered rental vehicle
  • Reasonable towing charges to take the vehicle to the nearest qualified repair facility
  • Valid loss-of-use charges the rental company assesses while the vehicle is being repaired

Loss-of-use coverage is very important, as few people realize that they’re responsible for paying to rent the car while it’s in service for repairs. For example, if a collision results in damage that takes a week to fix, the renter has to pay for that week it was out of use. Credit card rental car insurance can be very valuable here.

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Note that the coverage does not cover any liability or damage to other cars. It also doesn’t cover any bodily harm or other liability. The coverage is solely for the cost of repairing or replacing a damaged or stolen vehicle you rented. On the bright side, state laws typically require that car rental companies provide liability and bodily injury coverage for people who rent cars.

Some vehicles aren’t covered

For obvious reasons, most credit cards, including Chase Freedom® cards, don’t cover automobiles that are especially expensive. Most luxury and exotic cars (for example, Lamborghinis), larger vehicles (vans that can transport more than eight people), and antique vehicles (autos more than 20 years old or those that haven’t been made for the last 10 years) are excluded from the CDW. Trucks, motorbikes, and a few other types of vehicles are also excluded from coverage.

Who gets covered?

When you use a Chase Freedom Flex℠ or Chase Freedom Unlimited® to pay for a rental car, you are covered as the primary renter. Any additional drivers that the rental contract permits to operate the car are also covered.

Your card’s CDW will cover other people only if you add them to the rental contract. Note that car rental companies usually charge a fee for additional drivers, often $5 or $10 per day, per additional driver.

How to think about the collision damage waiver

A CDW is really a protection for the financial cost of a damaged or stolen rental car, and little more. If you return a car with damage, the card’s coverage will kick in after other forms of insurance, including your personal car insurance. For that reason, secondary rental car insurance is most valuable for people who have a high deductible on their existing car insurance policy.

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Frequent car renters would be better off with a credit card that provides primary rental car insurance, since it steps in before your personal auto insurance policy. Cardholders who have primary rental car insurance can avoid a claim, and thus higher premiums on their car insurance, because the card, rather than other forms of insurance, covers the claim.

That’s not the case with the secondary insurance most credit cards provide, which require you to make a claim on your personal car insurance before it pays out on any excess expenses.

For cards with better primary car insurance policies, consider the Chase Sapphire Preferred® Card, which offers primary car insurance and has the lowest annual fee of any card that offers the benefit. On the downside, the only cards that offer primary insurance carry an annual fee, but for frequent renters, the annual fee more than pays for itself, given that rental car companies charge as much as $10 or $15 a day for CDWs. So, a $95 annual fee on a card with primary coverage pays for itself for people who rent cars for at least one week each year.

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