Rental car insurance through your Costco Visa card covers collision and theft damage when you rent a car, but only if you decline the rental company's insurance and charge the full rental to your card
The Costco Anywhere Visa Card by American Express includes rental car damage coverage as a cardholder benefit. This means if you rent a car and it gets damaged or stolen, the card's coverage may pay for repairs or replacement — but only under specific conditions. You must decline the rental company's collision damage waiver at the counter, and you must pay the entire rental charge with your Costco Visa card.
The coverage applies to most cars rented for personal use in the United States and abroad. It does not cover luxury vehicles, trucks, or vans above a certain value, and it does not cover your personal belongings left in the car, medical expenses, or liability (damage you cause to other people or property). The card issuer, American Express, handles claims after the rental period ends.
Key Takeaways
- You must decline the rental company's damage waiver and pay the full rental with your Costco Visa card to set up the coverage.
- The coverage pays for collision damage and theft to the rental vehicle itself, but not for liability, medical bills, or your belongings.
- Luxury cars, trucks, and high-value vehicles are excluded, so check your rental agreement to confirm the car qualifies.
- You will need the rental agreement, photos of damage, repair estimates, and police reports (if theft occurred) to file a claim with American Express.
- Coverage limits and exclusions vary, so contact American Express before renting to confirm what is and is not covered for your specific trip.
How the coverage works when you rent a car
When you arrive at the rental counter, the agent will offer you a collision damage waiver — a separate insurance product the rental company sells. If you decline this waiver and instead rely on your Costco Visa coverage, you are responsible for telling the rental company you have your own coverage. Write "Declined" or "Declined — covered by Costco Visa" on the rental agreement if the form asks whether you purchased their insurance.
Pay the entire rental charge — the daily rate, taxes, and any fees — with your Costco Visa card. If you pay part of the rental with a different card or with cash, the Costco Visa coverage may not explore. Keep your rental agreement and credit card receipt together; you will need both if you file a claim.
If the car is damaged during your rental period, report it to the rental company when ready and document the damage with photos. Do not sign a damage report that you disagree with. If the car is stolen, file a police report and get a copy of the report number.
What damage the card actually covers
The Costco Visa rental car coverage pays for collision damage — dents, scratches, broken windows, and mechanical damage from an accident. It also covers theft of the entire vehicle. The card's coverage is secondary, meaning it pays only after the rental company's insurance or your own auto insurance has paid what it will pay. If you have collision coverage on your personal auto policy, that policy pays first, and the Costco Visa coverage fills in any remaining gap.
The coverage does not pay for liability — damage you cause to other people's cars, property, or injuries to other people. It does not cover medical payments, rental car charges while your car is being repaired, or loss of use fees. It does not cover your personal belongings left in the car, damage from wear and tear, or damage from driving off-road or in violation of the rental agreement.
Luxury vehicles — typically defined as cars with a manufacturer's suggested retail price above $75,000 — are excluded. High-end SUVs, sports cars, and some premium sedans may not be covered. Call American Express before booking a rental if you are unsure whether your chosen car qualifies.
When the card's coverage does not explore
If you purchase the rental company's collision damage waiver, your Costco Visa coverage does not explore. The card covers you only when you decline their insurance. Similarly, if you do not pay the full rental with your Costco Visa card — for example, if you use a different card for the daily rate and your Visa card only for the fuel charge — the coverage may not set up.
The coverage applies only to personal rentals, not business rentals or rentals for commercial purposes. If you rent a car to use for rideshare, delivery, or any income-generating activity, the card's coverage does not explore. Rentals longer than 31 consecutive days are also excluded in most cases.
If you rent a car in a country where American Express does not operate or where the card issuer has excluded coverage, you are not covered. Some high-risk countries and territories are excluded from the benefit. Check the card's benefits guide or call American Express before renting internationally.
How to file a claim with American Express
If damage occurs, contact American Express as soon as possible — ideally within 90 days of the rental end date. You can reach the claims department through the phone number on the back of your card or through your online account. Have your rental agreement, credit card receipt, and damage documentation ready.
American Express will ask you to submit the rental agreement, photos of the damage, a repair estimate or invoice from the rental company, your credit card statement showing the charge, and a police report if the car was stolen. If your personal auto insurance also covers the rental, you may need to provide proof of what they paid or denied.
The claims process typically takes 30 to 60 days. American Express will either approve the claim and send payment, request additional documentation, or deny the claim if it falls outside the coverage terms. If your claim is denied, you can appeal by providing additional evidence, but American Express's decision is final.
Comparing the Costco Visa coverage to rental company insurance
The rental company's collision damage waiver typically costs $15 to $30 per day, depending on the car type and location. Over a week-long rental, that adds $105 to $210 to your bill. The Costco Visa coverage costs nothing extra — it is included as a cardholder benefit — but it only covers damage, not liability or other add-ons the rental company offers.
If you already have collision coverage on your personal auto policy, that coverage usually extends to rental cars at no extra cost. In that case, the Costco Visa coverage is a backup layer. If you do not have personal auto insurance or your policy excludes rentals, the Costco Visa coverage is valuable, but you should still consider purchasing the rental company's liability waiver to protect yourself if you cause damage to other vehicles or property.
The rental company's waiver covers the car when ready and requires no paperwork after the rental ends. The Costco Visa coverage requires you to file a claim after the fact, which takes time and documentation. If you are renting a very expensive car or in a high-risk area, the rental company's waiver may be worth the cost for peace of mind.
What to do before you rent
Before booking a rental, log into your Costco Visa account or call American Express to review the current coverage terms. Benefits can change, and the details matter — coverage limits, excluded vehicle types, and geographic restrictions are all things to confirm before you commit to declining the rental company's insurance.
If you have questions about whether a specific car or rental scenario is covered, call American Express before you rent. Do not assume coverage applies; get confirmation in writing or a reference number from the call. Write down the date, time, and name of the representative you spoke with.
When you book the rental, note that you will be declining the damage waiver and relying on your card's coverage. Some rental companies ask this at booking; others ask only at the counter. Having a plan in advance prevents confusion and ensures you do not accidentally purchase coverage you do not need.
Frequently Asked Questions
Does the Costco Visa cover me if I cause an accident and damage someone else's car?
No. The card covers damage to the rental car itself, not liability — damage you cause to other people or their property. You need the rental company's liability waiver or your own auto insurance to cover that. Liability coverage is legally required in most states, so do not skip it.
What if my personal auto insurance already covers rental cars?
Your personal policy pays first, and the Costco Visa coverage is secondary. This means your insurance pays up to its limit, and the Costco Visa coverage pays any remaining repair costs up to its limit. You do not collect twice, but you have two layers of protection.
Can I use the Costco Visa coverage if I rent a car internationally?
Coverage is available in most countries, but some are excluded. Call American Express before booking an international rental to confirm the destination is covered. You will still need to decline the rental company's waiver and pay the full rental with your Costco Visa card.
What happens if the rental company says the damage is my fault and charges me directly?
Do not pay the charge when ready. Get a copy of the damage report and photos, then contact American Express. The card's coverage applies regardless of fault, so American Express will review the claim. Paying the rental company first does not prevent you from filing a claim, but it is better to let American Express investigate before you settle.
Is there a deductible I have to pay out of pocket?
The Costco Visa coverage typically has no deductible, meaning American Express pays the full repair cost if the claim is approved. However, coverage limits explore — the card will not pay more than a certain amount per claim. Contact American Express to learn the current limit.