The annual fee on my Chase Sapphire Preferred(CSP) card is coming due and I’m debating on whether it’s worth paying the annual fee and keeping the card open.
I currently travel full-time and because of that I don’t own a car. When I do need a set of wheels, I rent a car from Hertz or Enterprise.
One of the benefits of the CSP is the primary coverage for collision loss waiver(CDW) and loss damage waiver(LDW) on rental cars. This benefit is especially useful for me because I don’t have full auto coverage insurance like most people. I only carry a liability auto insurance policy and rely on the CDW and LDW offered from credit cards in the event damage occurs to the rental car.
I have many credit cards that provide CDW and LDW, but really never “dug deep” into the specifics. So, I re-evaluated the CDW and LDW on those credit cards to determine if it provided comparable coverage hoping to cancel the CSP card to save the $95 annual fee.
I compiled a summary of the CDW and LDW coverage on the 4 cards that I carry in my wallet at all times. These cards are:
- Chase Sapphire Preferred
- American Express SPG
- Barclays Arrival Plus
- Chase Ink Plus
I ruled out the Chase Ink Plus as a reliable means for CDW and LDW because the terms specify that the primary CDW and LDW coverage is only provided on car rentals for business purposes, otherwise it’s secondary coverage(more on secondary coverage later). So, I mainly keep the Ink Plus card because of the 5x on wireless and cable TV charges because I charge a fair amount in these categories where it’s worth the annual fee.
So the following table summarizes the benefits of the cards excluding the Chase Ink Plus.
American Express SPG
This card and many other Amex cards offer secondary CDW and LDW. However, Amex also offers an optional Premium Car Rental insurance that requires enrollment and paying either $19.95 or $24.95 per rental period. The enrollment is costs nothing, but each rental period you’re charged either $19.5 or $24.95 for $75k or $100k of coverage respectively(state of CA is $15.95 and $17.95). A rental period is defined as 42 days.
I’ve enrolled my SPG card in the premium car rental insurance(according to Amex once you enroll one card all your other personal cards are automatically enrolled) and have used the card to secure car rentals in the past.
But the problem I have with Amex is that when I use my Amex SPG to secure the rental car, I swap the Amex SPG to my Barclays Arrival Plus card when I return the rental car so I can avoid the $19.95 premium rental coverage. The $19.95 is only charged after the rental car transaction has posted to your statement, so it’s possible to use the Amex card to secure the car rental and swap out the payment after you’ve returned the rental car WITHOUT any damages.
Most of the time I’m successful doing this, which is usually when I’m picking up and returning to the same location.
When I book one-way rentals from my local branch to an airport, I get push back from the agent because they state it’s a one-way rental and the returning location can’t swap out the CC because the contract doesn’t belong to them, which isn’t entirely true, I think the agents don’t know how to swap out the credit card.
In other cases, the return location at the airport wasn’t manned in the early morning hours and I had to leave the charges on the Amex so I got hit with the $19.95.
The Amex premium car rental insurance is worth it in case of damages to my rental vehicles. There’s a data point on Flyertalk where one poster stated Amex took care of all the charges without any hassle.
Chase Sapphire Preferred
The CSP offers Primary CDW and LDW for rental periods less than 31 consecutive days. According to their benefits guides there’s no specific countries that are excluded from coverage, but it does seem to imply that coverage isn’t worldwide.
I’ve used this card for a rental car in New Zealand in Nov of 2014 after checkin with two different Chase Benefits administrator to ensure coverage would apply.
Again, there’s a data point on Flyertalk where someone actually use the primary CDW and LDW to cover $3k worth of damages, though he didn’t specify whether their rental was domestic or abroad.
For more specifics about coverage from the CSP card, the benefits are outlined here.
Barclays Arrival Plus MasterCard
Offers secondary CDW and LDW for rentals in country of residence. Since the Barclays Arrival card is a World Elite MasterCard, the specific benefits are detailed in their disclosure. I can’t seem to make for certain whether rentals abroad have primary or secondary coverage if the Arrival Plus card is used to secure the rental.
PRIMARY VS SECONDARY COVERAGE
Most credit cards offer secondary coverage, which means that your personal insurance or insurance bought from the rental car agency applies first, then insurance coverage from the credit card kicks in to cover any excess costs.
Gary from View from the Wing wrote a post differentiating between primary and secondary coverage. Folks who don’t have car insurance(I’m in this boat), secondary coverage will act as primary coverage.
However, There are few data points on Flyertalk where some poster wrote that primary coverage is preferred. Presumably, in the event you have damage to a rental car, you’re not dealing with two parties – your car insurance and your credit card company who’s providing secondary coverage. With primary coverage, you’re just dealing with your credit card without having your auto insurance provider know that you’ve been in an accident, thus reducing the likelihood of insurance premium increases.
Insurance offered from credit cards is limited to CDW and LDW and does not provide liability insurance. As far as I know, there is no credit cards that offers liability insurance. For this reason, I carry a name not owner(NNO) insurance policy from Geico, it’s fairly cheap and definitely worthwhile to have for damage to other property or person’s injury.
TYPES OF VEHICLES NOT COVERED
All my credit cards specifically stated that CDW and LDW does not apply to RV or box trucks. So, say if you wanted to rent a RV from Cruise America for a family road trip, the credit card CDW and LDW won’t apply. Similarly if you want to rent a U-haul to move, the CDW and LDW won’t apply.
Both the CSP and Barclays Arrival Plus card specifically state that luxury vehicles, exotic, or antiques won’t be covered, though, certain models of BMW, Mercedes, and Lincolns are included.
Since the Amex premium car rental protection terms doesn’t exclude certain models of cars and the coverage is limited up to a specific dollar amount, Amex coverage is useful for someone renting a high-end car with a retail value of under $100k(the higher tier coverage). I don’t plan on renting a Maserati or Corvette so I really don’t see the verbiage of Amex’s exclusion list(or lack there of) being a benefit to me.
The four cards I hold are only a small slice of credit cards offering CDW and LDW whether it’s primary or secondary coverage. Of the four cards, I feel the CSP is the best card for my current situation, therefore I’m going to keep the Chase Sapphire Preferred card and pay the $95 annual fee.
The Amex premium rental coverage provides primary coverage that’s adequate for me and I could use that and cancel my CSP card. As I mentioned before, it’s inconvenient to swap cards when I return the rental car or in some cases, I’ve been unable to swap out my Amex, thus having to pay the $19.95 for the rental period.
Since the CSP provides primary coverage by simply securing the rental car and paying for the entire rental rate with the card, I do not have to worry about swapping out credit card like with the Amex SPG card.
Lastly, the terms and conditions of the CDW and LDW probably changes every year, so it’s best to double check with the credit card benefits department to see what coverage is provided for your specific car rental.