Does a Costco Credit Card Have Rental Car Insurance? Your Comprehensive Guide

The short answer is yes, many Costco credit cards offer rental car insurance as a benefit. However, the specifics of this coverage, including what’s covered, the level of coverage, and the steps to take to activate it, can vary. Let’s dive deep into understanding how this valuable benefit works.

Understanding Costco Credit Card Rental Car Insurance

Most Costco members are familiar with the perks of the membership itself: bulk discounts, travel deals, and that legendary hot dog combo. But beyond the shopping aisles, your Costco membership, coupled with the right Costco credit card, unlocks even more potential savings and protection, particularly when it comes to rental car insurance. This is a benefit often overlooked but can save you significant money and hassle.

How Does It Work? Declining the Rental Agency’s Coverage

The key to unlocking this benefit lies in declining the Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW) offered by the rental car agency. This waiver essentially makes the rental agency responsible for damages to the vehicle during your rental period. When you decline this coverage and pay for the rental with your eligible Costco credit card, the card’s rental car insurance kicks in, providing coverage for damage or theft to the rental vehicle, subject to the terms and conditions of the policy.

Types of Coverage: Primary vs. Secondary

It is imperative to understand whether the rental car insurance provided by your Costco credit card is primary or secondary.

• Primary coverage means that the credit card’s insurance will pay out for eligible damages or theft before any other insurance you may have, such as your personal auto insurance. This is the more desirable option because you avoid having to file a claim with your own insurance company and potentially increasing your premiums.

• Secondary coverage means the credit card’s insurance only kicks in after you’ve exhausted any other applicable insurance policies. You’d first need to file a claim with your personal auto insurance, and the credit card’s insurance would then cover any remaining deductible or uncovered expenses, up to the policy limits.

Most Costco credit cards offer secondary coverage. This means that in the event of an accident or theft, you’ll likely need to file a claim with your personal auto insurance policy first.

What’s Typically Covered?

The specifics vary by card issuer and policy terms, but generally, the rental car insurance provided by Costco credit cards covers:

• Damage to the rental vehicle: This includes damage caused by collisions, vandalism, or natural disasters.
• Theft of the rental vehicle: If the car is stolen, the insurance should cover the loss.
• Loss-of-use charges: Rental car companies often charge for the revenue they lose while the damaged vehicle is being repaired. The credit card insurance may cover these charges.
• Towing charges: If the vehicle needs to be towed due to damage or theft, these charges are usually covered.

Important Exclusions to Be Aware Of

While the rental car insurance offered by Costco credit cards provides valuable protection, it’s crucial to be aware of its limitations. Common exclusions include:

• Specific vehicle types: High-value vehicles, exotic cars, motorcycles, and some SUVs and trucks may not be covered.
• Rental periods exceeding a certain duration: Many policies have a maximum rental period, often 31 days.
• Rentals in certain countries: Coverage may not be available in all countries. Check the policy details for a list of excluded countries.
• Damage caused by violations of the rental agreement: For example, if the car is damaged while being driven under the influence of alcohol or drugs, the coverage may be voided.
• Injury or damage to other people or property: The coverage typically only covers damage to or theft of the rental vehicle itself. Liability coverage for injuries or damage to others is usually not included.
• Off-road driving: Damage incurred while driving off paved roads is usually not covered.

Activating the Coverage: A Step-by-Step Guide

To activate the rental car insurance benefit, follow these steps:

1. Use your eligible Costco credit card to pay for the entire rental.
2. Decline the rental agency’s CDW/LDW.
3. Keep all rental documents, including the rental agreement, any accident reports, and repair estimates.
4. If an accident or theft occurs, notify the benefit administrator (the insurance company handling the coverage) as soon as possible. The phone number and claims information will be in your card’s benefits guide.
5. File a claim with the benefit administrator, providing all required documentation. This will typically include the rental agreement, accident report, repair estimate, and any other relevant information.
6. Cooperate with the claims investigation and provide any additional information requested by the benefit administrator.

Frequently Asked Questions (FAQs)

Here are some frequently asked questions about Costco credit card rental car insurance:

1. Which Costco credit cards offer rental car insurance?

   • Most Costco credit cards issued by Citi offer rental car insurance as a benefit. However, it’s always best to verify the specific benefits guide for your card to confirm.

2. Is the rental car insurance offered by my Costco credit card primary or secondary?

   • Typically, Costco credit cards provide secondary rental car insurance coverage. You will usually need to file a claim with your own personal auto insurance first.

3. What happens if I don’t have personal auto insurance?

   • If you do not have personal auto insurance, the secondary rental car insurance provided by the Costco credit card will generally act as primary coverage.

4. Are all rental car types covered by the insurance?

   • No, there are often exclusions. High-value vehicles, exotic cars, motorcycles, and certain SUVs or trucks might not be covered. Check your card’s benefit guide for a list of excluded vehicles.

5. How long can I rent a car and still be covered by the credit card’s insurance?

   • Most policies have a maximum rental period, often around 31 days. Rentals exceeding this period might not be covered.

6. Are rentals in all countries covered by the insurance?

   • No, coverage may not be available in all countries. Check the policy details for a list of excluded countries.

7. What should I do if I have an accident in a rental car?

   • Immediately notify the rental car company and the police, if necessary. Then, contact the benefit administrator (the insurance company handling the credit card’s rental car insurance) as soon as possible to report the incident and start the claims process. Gather all documentation, including the rental agreement, accident report, and repair estimates.

8. Does the rental car insurance cover liability for injuries or damage to other people or property?

   • No, typically, the coverage only extends to damage to or theft of the rental vehicle itself. Liability coverage for injuries or damage to others is usually not included. You may need to purchase supplemental liability insurance from the rental car company.

9. What is a “loss-of-use” charge, and is it covered?

   • A “loss-of-use” charge is a fee that rental car companies charge to compensate them for the revenue they lose while a damaged vehicle is being repaired. The credit card insurance may cover these charges, subject to policy limits and conditions.

10. Does the insurance cover towing charges if the rental car needs to be towed?

    • Yes, towing charges are usually covered if the vehicle needs to be towed due to damage or theft.

11. If I have an accident and file a claim with my personal auto insurance first, how does the credit card insurance work?

    • Since Costco credit cards typically offer secondary coverage, the credit card’s insurance will cover any remaining deductible or uncovered expenses after your personal auto insurance has paid its portion, up to the policy limits of the credit card’s insurance.

12. How can I find the specific terms and conditions of the rental car insurance offered by my Costco credit card?

    • The most reliable way to find the specific terms and conditions is to refer to your card’s benefits guide, which is usually provided when you receive the card and can often be accessed online through the card issuer’s website. You can also call the card issuer’s customer service number to request a copy of the benefits guide or ask specific questions about the coverage.

By understanding the details of your Costco credit card’s rental car insurance, you can travel with greater peace of mind and potentially save a significant amount of money on rental car costs. Always remember to decline the CDW/LDW offered by the rental agency, pay with your eligible Costco credit card, and familiarize yourself with the specific terms and conditions of the policy before your trip. Safe travels!