Travel&Vacation

My recent column on charge-card collision coverage for rental cars elicited a handful of “you forgot to mention” emails. I didn’t forget; I just didn’t have enough space for all the details. Here are some of the messages and my quick answers.

READER: “You didn’t mention supplemental liability protection.” Also: “A rental agent told me that even though my credit card covered the car, I needed insurance to cover the victim’s medical expenses if I hit someone who has no medical insurance. Was the agent scamming me to buy the insurance?”

EP: That depends on what kind of insurance the agent was pushing. CDW, whether from a rental company or a card, covers only damage to the car you rent. The type of insurance that covers you for damage or injury to someone else is liability insurance. And, as far as I know, no charge cards cover liability. You need liability coverage whenever you drive any car, rental or owned, and if your regular auto policy or umbrella policy doesn’t cover you in a rented car, you need to buy separate insurance or get a new policy.

READER: “Credit card companies usually put a time limit on collision recovery; they require the cardholder to report the accident within, say, 60 days from the date of the accident or damage to the car, not 60 days after you get the bill.”

EP: True—you need to know your card’s policy.

READER: “If travelers use a credit card to avoid paying for expensive collision damage waiver fees, they should never (as long as they live) throw out the paperwork. I once received a bill more than a year after the rental.”

EP: True. Although “never” may be a bit excessive, I suggest keeping the records for five years or more, just in case.

READER: “Last summer, in Montana, I rented a four-wheel drive Toyota Highlander. On a fishing jaunt, I was on a very rough road and damaged a running board to the tune of $900. My credit card company denied the claim because I wasn’t on a ‘government maintained road.’ Why would you go to Montana, rent a four-wheel drive, and then stay on smooth roads?”

EP: I can’t answer that “why” question, but it’s no surprise that your card company rejected your claim. However, you’d probably have faced the same problem even if you’d bought the rental company’s CDW: Every rental contract I’ve ever seen (and signed) contained fine print that driving on unpaved roads violates the contract, including the rental company’s CDW.

READER: “When I tried to apply my credit card coverage to the deductible part of the damage not covered by my auto insurance, the credit card company turned me down. The reason: The credit card policy only covered two-week auto rentals, and I had rented the car for three weeks. The accident had occurred during the first two weeks, but that didn’t make any difference.”

READER: “My Visa card limits collision coverage to rentals of 15 consecutive days (domestic) and 31 days (elsewhere). Both the planned and actual duration of the rental must be within the limits. Several times I used my coverage for long work trips only to discover the fine print later.”

EP: As far as I can tell, the 15-day domestic limit applies to most Visa (and MasterCard) coverage. Moreover, those companies are very strict about disallowing end-to-end rentals without some gap in between rental periods. American Express, on the other hand, covers the first 30 days anywhere.

READER: “I do not own a car and therefore do not have auto insurance. Does Visa still cover rental CDW?”

EP: Yes. Because you have no insurance of your own, coverage that’s nominally secondary becomes de-facto primary.

READER: “Another caveat: If you rent for your job, your employer’s insurance (if any) may be primary, and the rental company might go after your employer first if your coverage is secondary.”

EP: True, as far as I know.

All these questions and comments reflect the importance of knowing the fine print in your card’s collision coverage. Keep current with the details.