The Costco Anywhere Visa Card covers rental car damage, but only if you decline the rental company's insurance and pay the full rental with your card
The Costco Anywhere Visa Card by American Express includes rental car damage coverage as a cardholder benefit. The coverage applies to collision and theft damage when you rent a car and use the card to pay for the entire rental. However, the coverage only works if you decline the rental company's collision damage waiver (CDW) or loss damage waiver (LDW) at the rental counter — accepting their insurance voids the Amex benefit.
This is not comprehensive coverage. It covers physical damage to the rental car itself, but does not cover liability (damage you cause to other vehicles or property), medical payments, or theft of personal items left in the car. You are still responsible for those losses unless you purchase additional coverage from the rental company or carry your own auto insurance that extends to rentals.
The coverage applies worldwide, including the United States, and has no deductible on the Amex side — meaning you do not pay out of pocket to Amex if a claim is approved. However, the rental company may still hold you liable for certain costs, such as administrative fees or diminished value, depending on the rental agreement and state law.
Key Takeaways
- The Costco Visa covers collision and theft damage to rental cars only when you decline the rental company's damage waiver and pay the full rental with your Amex card.
- The coverage does not include liability for damage to other vehicles or property, medical expenses, or personal belongings stolen from the car.
- You must contact American Express before renting to understand the exact terms, coverage limits, and claim process for your specific card.
- Your personal auto insurance may already cover rental cars, so check your policy before relying on the Amex benefit to avoid paying for duplicate coverage.
- The rental company can still charge you for administrative fees, diminished value, or other costs not covered by the Amex benefit, depending on state law and the rental agreement.
How the Coverage Works When You Rent a Car
When you arrive at the rental counter, you must actively decline the rental company's damage waiver. Do not straightforward skip the question or say nothing — you need to refuse it explicitly. Once you decline, the rental company's coverage is off. At that point, the Amex benefit becomes your primary coverage for collision and theft damage.
The coverage applies only to the rental car itself, not to your belongings, other vehicles, or injuries. If you hit another car, the other driver's damage is your liability, and the Amex benefit does not cover it. If someone steals items from inside the rental car, that is also not covered. You are responsible for those losses unless you purchased liability or personal effects coverage from the rental company.
The rental company will still inspect the car when you return it and document any damage. If damage is found, the rental company will bill you or attempt to collect from American Express. You then file a claim with Amex, providing the rental agreement, damage photos, and repair estimates. Amex will investigate and either approve or deny the claim based on whether the damage falls within the coverage terms.
What the Coverage Does Not Include
The Costco Visa rental car benefit excludes several common costs. Liability coverage — damage you cause to other vehicles, property, or people — is not included. If you cause an accident and the other driver sues, your personal auto insurance or a liability policy would need to cover it, not the Amex benefit.
Medical payments and injury coverage are also excluded. If you or a passenger is injured in the rental car, the Amex benefit does not pay medical bills. Your health insurance or the rental company's medical coverage would explore instead.
Personal belongings left in or stolen from the rental car are not covered. Rental companies often offer personal effects coverage for a daily fee; the Amex benefit does not replace it. Wear and tear, mechanical breakdowns, and normal maintenance are also excluded — the benefit covers sudden damage only.
Additionally, the coverage may not explore if you were driving under the influence, violating traffic laws, or using the car for commercial purposes (such as rideshare or delivery). Read the full terms from American Express before renting to understand the exclusions that explore to your specific situation.
How This Coverage Compares to Your Personal Auto Insurance
Most personal auto insurance policies extend to rental cars, including collision and comprehensive coverage. If your policy covers rentals, you may already have better protection than the Amex benefit — your policy may include liability, medical payments, and a lower deductible. Before declining the rental company's damage waiver and relying on the Amex benefit, call your insurance company and confirm that your policy covers rental cars and what the deductible is.
If your personal insurance covers rentals with a $500 deductible and the Amex benefit has no deductible, the Amex benefit is the better choice — you would use it as primary coverage and avoid the deductible. However, if your insurance has a $250 deductible and covers liability as well, your insurance may be more valuable overall because it protects you against lawsuits, which the Amex benefit does not.
The interaction between the two can be complex. Some policies treat the Amex benefit as primary and yours as secondary, while others do the opposite. Your insurance company can clarify the order and help you decide whether to use the Amex benefit or purchase the rental company's coverage.
When to Decline the Rental Company's Insurance and Use the Amex Benefit
Decline the rental company's damage waiver if your personal auto insurance covers rentals and you want to avoid paying the rental company's daily fee (usually $15 to $35 per day). In that case, your insurance is primary, and the Amex benefit provides a backup layer with no deductible.
Also decline the rental company's coverage if you have no personal auto insurance but are comfortable with the Amex benefit's limits. You will save the daily fee, and the Amex benefit will cover collision and theft damage. However, you will have no liability coverage, so consider purchasing liability-only coverage from the rental company if you are concerned about causing an accident.
Do not decline the rental company's coverage if you have no personal auto insurance and cannot afford to pay out of pocket for liability or medical expenses. In that case, purchase the rental company's full coverage package, even though it costs more per day. The Amex benefit alone leaves you exposed to lawsuits and medical bills.
Steps to Take Before and After Renting
Before you rent, contact American Express at the number on the back of your Costco Visa card and ask for the rental car coverage terms. Request a copy of the coverage details in writing, including the coverage limits, exclusions, and the claims process. This ensures you understand exactly what is and is not covered before you arrive at the rental counter.
Also call your personal auto insurance company and confirm whether your policy covers rental cars, what the deductible is, and whether the Amex benefit would be primary or secondary. Write down the name of the representative you spoke with and the date, in case you need to reference the conversation later.
At the rental counter, when the agent offers damage coverage, decline it explicitly and state that you are using your credit card's coverage. Ask the rental company to note this in the rental agreement. Take photos of the car's condition before you leave the lot — document any existing damage, scratches, or dents. This protects you if the rental company tries to charge you for damage that was already there.
When you return the car, inspect it with the rental agent and make sure they document the condition. If damage is found, ask for a detailed damage report and photos. Request the repair estimate or invoice if available. Keep all rental documents, including the agreement, damage report, and receipts. File a claim with American Express within the time frame specified in the coverage terms (usually 90 days), providing all documentation.
What Happens if the Rental Company Charges You for Damage
If the rental company charges you for damage, you have options. First, review the damage report and compare it to the photos you took before renting. If the damage was pre-existing, dispute the charge with the rental company in writing, providing your photos as evidence. Many rental companies will reverse charges if you can prove the damage was already there.
If the rental company insists the damage is new and you disagree, or if the damage is legitimate but you believe the repair cost is inflated, you can dispute the charge with American Express. File a claim with Amex and provide the rental agreement, damage photos, repair estimate, and your written dispute. Amex will investigate and may reverse the charge if the evidence supports you.
If Amex approves your claim, they will pay the rental company directly or reimburse you, depending on how the claim is processed. If Amex denies the claim, you are responsible for the charge. You can appeal the denial if you believe Amex made an error, but the appeals process is limited and the decision is usually final.
Frequently Asked Questions
Does the Costco Visa cover rental car insurance if I accept the rental company's damage waiver?
No. The Amex benefit only applies if you decline the rental company's damage waiver. If you accept their coverage, the Amex benefit does not explore, and you are covered only by the rental company's policy.
What is the coverage limit on the Costco Visa rental car benefit?
American Express does not publicly state a specific dollar limit for the rental car coverage. Contact Amex directly at the number on your card to learn the limit that applies to your account and the rental company's policy.
Does the coverage explore if I rent a car outside the United States?
Yes, the coverage applies worldwide, including international rentals. However, some countries have restrictions on declining rental company insurance, so confirm with the rental company before declining their coverage abroad.
Can I use the Amex benefit if I rent a car with a different credit card?
No. The coverage applies only if you pay for the entire rental with the Costco Anywhere Visa card. If you pay with a different card, the Amex benefit does not explore.
What should I do if American Express denies my rental car damage claim?
Request a detailed explanation of the denial in writing. Review the coverage terms to see if the damage falls within an exclusion. If you believe Amex made an error, you can appeal the decision, but provide new evidence or documentation that addresses the reason for the denial.