The Costco Visa covers collision and theft, but not liability or damage you cause to other people

The Costco Anywhere Visa Card by American Express includes rental car damage coverage when you charge the full rental to the card. This coverage pays for dents, dings, theft, and total loss of the rental vehicle itself — but it does not cover liability (injuries or property damage you cause to someone else), medical payments, or roadside information. You still need to carry your own auto insurance or buy the rental company's liability coverage to be legally protected.

The card's coverage is secondary, meaning it pays only after your personal auto insurance has paid its limit. If you do not have personal auto insurance, the Costco Visa coverage becomes primary — but you are still responsible for any liability claims that exceed what the card covers. Most rental companies will require you to either show proof of personal insurance or purchase their liability package at the counter.

Coverage applies to rentals in the United States, Puerto Rico, and most countries outside the United States and Canada. It does not cover rentals in Canada, rentals from certain specialty companies (like luxury or exotic car agencies), or rentals longer than 31 consecutive days.

Key Takeaways

  • The Costco Visa covers collision, theft, and vandalism to the rental car itself, but you must charge the full rental to the card to set up coverage.
  • The card does not cover liability — damage or injuries you cause to other people — so you need personal auto insurance or the rental company's liability package.
  • Coverage is secondary to your personal auto insurance, meaning your own policy pays first if you have one.
  • Rental companies often require proof of liability coverage before they hand over the keys, even if you have the Costco Visa damage coverage.
  • Coverage excludes rentals in Canada, luxury or exotic vehicles, and rentals over 31 days.

How the coverage works when you have personal auto insurance

If you carry your own auto insurance with collision coverage, the Costco Visa becomes a backup. Your personal policy pays first up to your deductible and coverage limit. The Costco Visa then covers the remaining damage, minus the deductible your personal policy would have charged. This arrangement saves you from paying your deductible out of pocket on a rental, since the card covers what your insurance would have left you responsible for.

You do not need to file a claim with Costco or American Express first. Instead, you report the damage to the rental company, let your personal insurance handle it, and then contact American Express with the rental agreement and repair estimate if there is a gap between what your insurance paid and the total cost. American Express will review the claim and send payment directly to you or the rental company.

The rental company will still ask for proof of liability coverage before you leave the lot. Show your personal auto insurance card — that satisfies their requirement. You do not need to mention the Costco Visa coverage to the rental agent unless damage occurs.

What happens if you do not have personal auto insurance

If you do not carry personal auto insurance, the Costco Visa coverage becomes primary for collision and theft. However, you still have no liability protection, which is a serious gap. Liability coverage pays for injuries to other people and damage to their property if you cause an accident — and rental companies are required by law to carry liability insurance on their vehicles. That liability coverage protects the rental company, not you.

When you arrive at the rental counter without personal insurance, the rental company will ask for proof of coverage. You cannot show the Costco Visa as proof because it is not liability insurance — it only covers damage to the rental car itself. At that point, you must either purchase the rental company's liability package (usually $15 to $25 per day) or decline the rental. Some rental companies may refuse to rent to you without proof of liability coverage, depending on their policy and your location.

If you do purchase the rental company's liability coverage, you are paying for protection you may not need. If you already have personal auto insurance, that policy almost always covers you when you drive a rental, so buying the rental company's liability package is redundant. The Costco Visa damage coverage plus your existing personal insurance is the most cost-effective combination.

Damage coverage limits and what is not covered

American Express does not publish a specific dollar limit for the Costco Visa rental car coverage. Instead, the coverage pays up to the actual cash value of the rental vehicle at the time of loss. If a rental car worth $20,000 is totaled, the coverage pays up to $20,000 (minus your personal insurance deductible if applicable). If the same car is stolen, coverage applies the same way.

The coverage does not include wear and tear, maintenance costs, or loss of use charges that rental companies sometimes add to your bill. It also does not cover damage from off-road driving, racing, or using the vehicle for commercial purposes (like rideshare or delivery). Damage from mechanical failure, normal wear, or damage you cause while driving under the influence is also excluded.

If you rent a vehicle and return it with minor damage that the rental company does not charge you for, there is no claim to file. The coverage only pays when the rental company bills you for damage. Some rental companies waive damage charges under $500 or $1,000 depending on their policy, so you may never need to use the card's coverage.

How to file a claim with American Express

If damage occurs, report it to the rental company when ready and get a written damage report or estimate. Do not sign anything that says you waive your right to dispute the charge. Take photos of the damage and keep all rental paperwork, including the agreement, receipt, and any damage documentation the rental company provides.

Contact American Express within 90 days of the rental end date. You can reach the Costco Visa claims department through the number on the back of your card or through your online account. Have the following documents ready: the rental agreement, the damage report from the rental company, repair estimates or invoices, and proof of payment (your credit card statement showing the rental charge).

American Express will review the claim and determine whether the damage is covered. If it is, they will either pay the rental company directly or reimburse you, depending on how the rental company handled the charge. The process typically takes two to four weeks. If American Express denies the claim, they will explain why in writing.

When to buy the rental company's coverage instead

The rental company's damage waiver (sometimes called a Loss Damage Waiver or LDW) costs $15 to $30 per day depending on the vehicle and location. If you are renting for a week, that is $105 to $210 added to your bill. For a short one- or two-day rental, the rental company's coverage might be worth the cost if you are uncomfortable with the Costco Visa's secondary coverage structure or if you do not have personal auto insurance.

You should also consider the rental company's coverage if you are renting a high-value vehicle (luxury or specialty cars) that the Costco Visa excludes. Some exotic car rental agencies do not honor third-party coverage at all and require you to purchase their own damage waiver. Check the rental agreement before you book to see whether third-party coverage is accepted.

If you have a high deductible on your personal auto insurance ($1,000 or more), paying for the rental company's waiver might make sense for peace of mind. You would avoid paying that deductible out of pocket if damage occurs. However, if your deductible is $500 or less, the Costco Visa coverage plus your personal insurance is almost always cheaper over time than paying daily waiver fees.

Comparing the Costco Visa to other credit card rental coverage

Several other premium credit cards offer rental car damage coverage, including the Chase Sapphire Reserve, the American Express Platinum Card, and the Capital One Venture X. Most work the same way as the Costco Visa: they cover collision and theft but not liability, they are secondary to personal insurance, and they require you to charge the full rental to the card.

The main differences are in exclusions and limits. Some cards exclude certain vehicle types or rental locations. The American Express Platinum Card, for example, excludes rentals in Australia and New Zealand, while the Costco Visa covers most countries outside the United States and Canada. The Chase Sapphire Reserve covers rentals up to 42 days, while the Costco Visa stops at 31 days.

If you already have the Costco Visa and use it for rentals, you do not need to pay for additional coverage unless you are renting a vehicle type the card excludes. If you do not have the Costco Visa, the coverage it offers is a useful benefit if you rent cars occasionally, but it should not be the only reason to explore for the card.

Frequently Asked Questions

Do I need to decline the rental company's damage waiver if I have the Costco Visa?

Not necessarily. If you have personal auto insurance with collision coverage, declining the rental company's waiver and relying on your insurance plus the Costco Visa is usually cheaper. However, if you do not have personal insurance, you must either purchase the rental company's liability coverage or decline the rental — the Costco Visa does not cover liability.

What if the rental company charges me for damage I did not cause?

Dispute the charge with the rental company first and ask for documentation of the damage. If they cannot prove you caused it, they should remove the charge. If they refuse, contact your credit card company and file a dispute. American Express will investigate and may reverse the charge if the rental company cannot provide evidence.

Does the Costco Visa cover rentals from Turo or other peer-to-peer car rental services?

No. The Costco Visa coverage applies only to rentals from traditional rental companies like Enterprise, Hertz, Avis, and Budget. Peer-to-peer platforms like Turo have their own insurance systems, and the Costco Visa does not extend to those rentals.

Can I use the Costco Visa coverage if I rent a car with my spouse's name on the agreement?

No. The coverage applies only if you are the primary renter and the rental is charged to your Costco Visa. If your spouse is the primary renter, their card must be used to set up coverage. Some rental companies allow you to add yourself as an additional driver, but that does not change who the coverage protects.

What if my personal insurance denies my claim — does the Costco Visa still pay?

Yes, the Costco Visa becomes primary if your personal insurance denies the claim. However, you must provide American Express with proof that your insurance denied coverage. This is one of the main reasons the secondary coverage structure is valuable — it acts as a safety net if your personal policy does not cover the loss for some reason.