Do Discover Cards Offer Auto Rental Insurance?

Car rental insurance is a nice perk for many cardholders, and it can even be a reason to choose certain cards over others if you're a frequent traveler. But do Discover® cards offer car rental insurance? Let's take a look.

No, Discover credit cards do not offer car rental insurance. Once upon a time, Discover credit cards offered rental car insurance, along with flight accident insurance, purchase protection, return protection, and extended warranty.

Then, in early 2018, Discover discontinued all coverage to reinforce its rewards program. Now, in place of insurance, Discover cards have a robust rewards program and a cashback match that few cards can rival.

The headliner perk on Discover credit cards is the first-year unlimited cashback match. New cardholders to Discover will get an unlimited dollar-for-dollar cashback match on all cash back earned within the card's first year. On your card's first anniversary, Discover will dish out the match as a welcome offer to you. This first-year match can turn $300 earned into $600 in total cash back.

Discover credit cards have no annual fees and no foreign transaction fees. They also offer multiple ways to redeem rewards. Besides the typical redemption options (statement credits, gift cards, cash deposits), Discover lets you apply rewards to purchases made through PayPal or Amazon. And while it no longer offers travel or shopping insurance, Discover monitors your Experian credit report to alert you of potentially fraudulent activity.

Discover credit cards aside, many of the best travel credit cards offer rental car insurance. If rental insurance is important to you, here are some cards that offer great coverage.

Chase Sapphire Preferred

The Chase Sapphire Preferred® Card ($95 annual fee) has robust car rental insurance. Cardholders are covered for a number of incidents, including theft, damage, loss-of-use charges, administrative fees, and tow charges. The limits of your coverage reach the actual cash value of the rented car. Some exclusions include:

• Sports and exotic vehicles
• Vehicles manufactured in the last 10 years
• Motorcycles, electric scooters, and mopeds
• Hour-to-hour rentals
• Vans exceeding nine passengers

Bank of America Premium Rewards

The Bank of America® Premium Rewards® credit card credit card ($95 annual fee) is no stranger to travel insurance. The card comes packed with valuable coverage, such as trip delay, trip cancellation/interruption, baggage delay, lost luggage, and, of course, auto rental collision damage waiver.

Bank of America's rental car coverage will reimburse you for the actual cash value of most rented cars. It covers theft or collision sustained to the rental car and may cover other fees, like towing. When driving the car for personal use, this coverage is secondary to your regular car insurance. So, if you exceed the limits of your car insurance, this card's rental coverage would help sustain the blow to your finances.

Credit card rental insurance essentially takes the place of the collision and damage waiver ("CDW") that car rental agencies always try to pressure you into buying. With this waiver in place, you're off the hook for damages or theft incurred to a rented car during its rental period. These waivers don't typically cover damages to other cars, bodily injury to others or yourself, or damage to your own possessions.

Since many credit cards (but not Discover) have CDW, this could save you money at the rental agency. To activate the coverage on your card, use it to book your rental, then decline the agency's CDW. Be sure that the driver on the rental agreement matches the cardholder's name.

If the two don't match, it might create problems later. If you follow this and your rental sustains damages later, just fill a claim with your credit card company, and it will put you into contact with its third-party insurance provider.

Primary vs. secondary coverage

Keep in mind that some credit cards provide primary coverage, while others provide secondary. Primary coverage means your credit card company will pay the insurance claim first. In other words, you don't have to go through your insurance company, nor pay a deductible. Secondary coverage means the credit card company would pay whatever your insurance company didn't cover. And yes -- secondary coverage will usually cover your deductible.

Some rentals won't be covered, like antiques, sports cars, vans, limousines, recreational vehicles, and vehicles with open cargo beds. Before you count on your card's rental insurance, make sure you read and understand your card's policy, as cards can vary widely in coverage limits, covered rental periods, and eligible vehicles.