rental car insurance: don't get taken for a ride
You know that moment when you’re standing at the rental car counter and the salesperson says to you, “Do you want to purchase insurance on the vehicle?” Most of the time, you politely turn the offer down with a short and sweet, “No, my credit card covers me.” Then as you initial every box next to hundreds of words in fine print indicating you’re declining ALL the coverage, you kinda hold your breath and think, “I sure hope… I’m covered for all of this if something happens!”
Few of us have ever taken one of those rental car contracts, called their credit card company and said, “Okay do you cover me for: An accident on gravel roads? A car rented in Ireland? A recreational vehicle? Loss of Use? Ah! What the heck is Loss of Use?” In fact, a survey by the National Association of Insurance Commissioners found 24% of people aren’t sure whether their credit cards provide any sort of rental car coverage.
Trying to figure it out is enough to drive you crazy! So Card Hub’s CEO, Odysseas Papadimitriou, navigated the legal jargon of the car rental contracts and credit card coverage policies to create a great cheat sheet. It actually rates each major card network’s policy and lists items that aren’t covered by plastic.
Related: Rental Cars: Hidden Fees
Card Hub says supplemental liability insurance, which provides coverage in the event of an accident causing injury or property damage to someone other than the renter and passengers is a standard benefit offered by the four major card networks (Visa, MasterCard, American Express, and Discover). But before you initial the box next to “decline supplemental insurance,” know there are caveats to each network’s plan – including coverage restrictions based on what type of card you have or vehicle you rent, where you rent a vehicle, how long your rental period is, and the nature of the damage done to a rental. You really have to understand it all if you want to make sure you’re protected!
BASIC CREDIT CARD CAR RENTAL COVERAGE
• All four major card networks provide some form of rental car insurance coverage.
• MasterCard is the only network that does not provide coverage to all cardholders.
• All four major networks require that cardholders charge the entire rental car purchase on their credit card and decline supplemental insurance/Collision Damage Waivers (CDW) offered by the rental company in order to be eligible.
Related: How to Find the Best Credit Card for You
• "Loss of Use" is covered by Visa, MasterCard, and American Express. Each requires specific documentation for this in order for coverage to apply. Discover does not cover loss of use. (Loss of Use is when the rental car company charges you for the income it lost because the car was in the repair shop and could not be rented).
• None of the four major networks provides coverage for the rental of exotic, expensive, or antique cars; trucks; vehicles with open beds; or off-road vehicles.
• VISA, MasterCard, and American Express exclude from coverage rentals in certain countries as well as rentals that exceed specified time limits. Discover is the only network to provide coverage in all of the countries that its cards are accepted.
• American Express is the only network not to provide coverage for renting certain popular SUVs, including the Suburban and Tahoe from Chevrolet, GMC Yukon, Ford Expedition, Lincoln Navigator, Toyota Land Cruiser, Lexus LX450, Range Rover, and full-sized Ford Bronco.
• VISA and MasterCard are the only two networks that do not cover accidents occurring on dirt and gravel roads. Both Visa and MasterCard state that roads must be regularly maintained by the government for coverage to apply.
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Why in the world would a credit card company exempt dirt roads? And if you think, “Well that’s no problem; I’m not vacationing in the Wild West.” Papadimitriou has a warning for you. “When you consider the fact that dirt and gravel roads are popular in many vacation destinations – whether they are near beaches, lakes, or mountains – the exclusion of coverage for accidents that occur on them is more significant than you might originally think. In other words, what might be considered quaint, rustic, or part of a place’s charm to most vacationers is a cause for concern for those relying on the rental coverage provided by their credit card.”
WHICH CARD OFFERS THE BEST COVERAGE?
Card Hub says it evaluated Visa, MasterCard, American Express and Discover in a number of different categories, ranging from which cardholders are eligible to how claims must be filed, and compared their policies to it’s subjective definition of the ‘ideal’ policy – one where you’d know what you were getting based on common sense, without having to read the fine print. Which is extremely important because it found far too few credit card users even read their cardmember agreements. The winner: Visa. Card Hub says largely due to the ubiquity of coverage on network cards and the fact that it covers towing charges and a rental company’s loss of use. The final breakdown:
Visa: 87%
Discover: 85%
American Express: 82%
MasterCard: 73%
For an amazing, in detail, look at all the in’s, out’s and exclusions of card policy coverages, check out Card Hub’s complete study.
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