More on Credit Card Rental Car Insurance Coverage

Mark Ashley writes about rental car companies’ hard sells for collision damage waiver, the extra “insurance” (it isn’t insurance, it’s a payment so they don’t pursue you in case of physical damage to their vehicle) that drives commissions with many of the lower-end rental agencies.

Here he discusses Advantage, my own experience is that the pushiest sales agents are with Enterprise. I’ve gotten stories like “What’s your deductible? You know that if there’s damage to the car you have to pay the deductible, in cash, when you return the vehicle. That’s California law.” It’s interesting that these rental car agents are such experts in law.

Ashley points to the claim that credit cards which offer insurance won’t cover ‘loss of use.’ That’s the charge rental companies tack-on to make you pay rental charges on the car while it’s being repaired, since they can’t rent it for those days. Another frequent add-on is an administrative charge for them to handle the paperwork.

The truth here is that credit card companies will sometimes play hardball with rental agencies, demanding usage logs for their fleet to prove that they were sold out of cars at the time they’re claiming loss of use charges — in other words, show that they actually lost out on the ability to rent the car to a customer. If they had plenty of cars available, they likely met the rental needs of all their potential customers, and actually incurred no lost rentals from the damaged vehicles being in the shop.

So it’s true that credit card-provided rental coverage may not lay down in the face of loss of use charges, but there’s some likelihood that the rental car company will. And even if they don’t — and even if you get stuck in the middle — the charges likely won’t be very steep, not enough to warrant purchasing extra coverage.

Most premium credit cards offer some sort of rental coverage. If you don’t have insurance of your own, the coverage may even be primray (meaning you don’t need to obtain insurance). Otherwise it’ll usually cover whatever your own car insurance policy does not. Small business cards sometimes offer primary insurance on cars rented for business use. And Diners Club still offers primary coverage — which means they aren’t just paying your deductible, but (at least in theory) the full cost of a claim. Diners used to market that if you had an accident in your rental car, your insurance company probably doesn’t even need to know.

I may be the last man standing still holding a Diners Club card, given the benefit cuts the past couple of years. The card no longer offers two billing cycles to pay, they’ve upped the foreign currency conversion charges, they’ve lost several mileage transfer partners in the Club Rewards program including several of the largest domestic US airlines, they’ve devalued the ‘tailored travel program’ that let you cover travel charges made on your card directly with points, and the Diners Club card no longer even offers dining benefits. But I rent cars enough that the primary insurance still motivates me to keep the card, plus the ability to transfer points in many cases to frequent flyer accounts in any name.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. I just had a minor issue. (This was in Canada, with a Canadian DL and CC) I do not own a car, and thus have no primary inusrance. ICBC requires all British Columbia cars to have $1M of liability, so I believe I am covered there, and I decline CDW every time.

    On a 1 day rental I scratched a rim on my rented Volvo S60 while parking and essentially ruined that wheel. Budget charged me $375 (incl $75 admin fees) and I await final assesment.

    My RBC Visa Infinite covers up to $65,000 of normal cars (No Trucks, Exotic, or Cargo Vans). I have submitted a claim and I am awaiting Budget’s own claim for the damage.

    RBC Visa appears to cover everything, but I will wait to give my thumbs up approval until I see the refund check.

    Crossing my fingers.

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