Renting a car? Know whether your card adds insurance
By Michelle Crouch
|American Express||30 days (its premium program covers you up to 42 days if you enroll and the per rental fee)|
|MasterCard||Varies by issuer (Citi travel cards have a maximum of 31 days)|
|Discover||As of December 2017, Discover cards no longer offer car rental insurance as a benefit.|
15 consecutive days in your country of residence; 31 days outside (Some banks that issue Visa-branded cards, such as Chase, offer more generous terms.)
Most credit card companies exclude trucks, pickup trucks, antique and exotic vehicles, ATVs, motorcycles, large vans and SUVs that seat more than a certain number of passengers (usually seven or eight). But car rental consultant Jim Tennant of the Tennant Group says the exception that tends to cause the most trouble is the limit on expensive cars, since rental agencies are offering more luxury cars than they used to. “When car rental companies are almost out of cars, they may think they’re doing you a favor by giving you a Mercedes instead of the big Ford or Chevrolet you reserved,” Tennant says. “But because the Mercedes is valued at over $50,000, it may not be covered.”
If you are planning to rent a typically excluded vehicle, note that Citi travel cards such as AAdvantage, Premiere and Thank You Preferred cover up to $100,000 in damage to “any motor vehicle with at least four wheels that is designed to be driven on public roads,” according to their terms and conditions. Another option: AmEx’s premium coverage, which specifically notes that it covers cars worth more than $50,000.
Tennant recommends checking for vehicle exclusions in the fine print or calling your card’s program administrator.
Many card companies have specific countries that are excluded. Check the chart below, but also call your card issuer before you go:
|American Express||Ireland, Israel, Jamaica, Italy, Australia and New Zealand|
|MasterCard||Varies by issuer|
|Discover||No longer offers coverage|
|Visa||Ireland, Israel, Jamaica, Northern Ireland|
If you’re traveling to those places, consider using a Citi travel card (such as Thank You Preferred, Citi Premier or AAdvantage) or a Chase card, because they have no country exclusions. Weinberg recommends taking a written copy of your credit card rental car policy when you rent outside the U.S. Overseas rental agencies often require you to pay for their CDW or liability coverage unless you have documentation showing other coverage.
Read the fine print. Some policies won’t cover you if you drive on unpaved or gravel roads; others won’t cover you if you wait too long to file a claim. Also, make sure anyone who may drive the car is listed on the rental contract, or confirm that the company allows spouses to be an automatically authorized driver. “If you rent a car in your name and then your spouse is driving and has an accident, companies will use that as a way to deny coverage,” Weinberg says.
Unfortunately, it’s possible. Rental car agencies often charge “loss-of-use” fees to cover the revenue they lose while a damaged car is in the shop, and those fees can total hundreds of dollars.
Most credit card companies say they will pay those fees as long as the rental car agencies provide documentation, usually a “fleet utilization log,” verifying they actually lost money because the damaged car was out of service. Here’s the problem: rental companies consider those logs confidential. They argue that, legally, they don’t have to provide them. So while your rental company and credit card company play the blame game, you can end up on the hook for the bill. (Note: In some states, such as New York and Wisconsin, car rental companies aren’t allowed to charge loss-of-use fees. In others, auto insurers are required by law to pay those fees.)
Fortunately, credit card companies have become more willing in recent years to pay loss-of-use fees, rental car claims administrators say. Some now accept repair estimates as documentation instead of fleet utilization logs. But rental companies often charge two other fees that may not be covered: administrative fees and “diminution-in-value” or diminished value fees, designed to cover the inherent loss of value to the car because it’s been damaged.
“We fight with credit card companies constantly,” says Coppere Williams, senior claims specialist at Khoury-Alternative Claims Management, a damage-recovery company based in San Antonio. “When they won’t pay, we end up being the bad guys when we have to go back and bill the customer.”
Shayne Ashton, general manager and vice president of PurCo Fleet Services in Spanish Fork, Utah, says rental car companies are just trying to collect what they are owed under the law. “We actually had a couple of cardholders sue American Express for that reason in small claims court, and they ended up getting reimbursed what they had paid out.”..
Williams and Ashton told CreditCards.com that when it comes to car rental claims, Visa is the most willing to pay up, followed by American Express. “Visa without a doubt will pay loss of use, and that’s not always the case with MasterCard and AmEx," Williams says. “They will also cover an administrative fee without batting an eye. They are the most reasonable."
Start by asking the rental car company if it would be willing to waive the fees. Rental car claims administrators sometimes agree to drop some charges if they’ve been paid for everything else. Then go to your insurer and credit card company, emphasizing what a good customer you’ve been. “If you put enough pressure on them,” Weinberg says, “they’ll usually pay out in the end.”
As always, you will have to weigh the risks and benefits. Despite the many exceptions and exclusions, it is possible to get full coverage through your personal auto insurance and credit card, but you’ll need to choose your card carefully, read the fine print and be willing to fight for coverage of any fees. But if all you want is peace of mind, and you don’t mind the expense, the rental car company CDW/LDW coverage may be the way to go.