Relying on credit card CDW for car rental
Has anyone relied on Visa CDW on a European car rental and then had to make a claim? The coverage sounds good but I wonder how the claim process went.
Susan
Manchester 9/26/09
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Mine was a Mastercard, but I will never trust credit card insurance again as a result. I checked with the company repeatedly before my trip to make sure I did things exactly correctly so that I would be covered. They assured me repeatedly that I was covered. Long story short, I had a small accident and the credit card's insurance refused to pay, even with the rental agency's help to settle things. Since I had refused the rental counter insurance, as I had been instructed to do in order to activate the credit card insurance, I got stuck with the bill. There's a current discussion on this topic on the West board which you might want to check out.
Thanks, Nancy, this is what I expected when I posed the question. Unfortunately this seems to be the case with all insurance - sounds great until you actually make a claim.
Nancy doesn't let us know why the credit card company denied her claim. I had an accident overseas, filled out one rather long form, and it was all covered.
I had backed into a bollard (and I didn't even know what a bollard was until I hit one, its the short poles the line the sidewalks in many cities), my fault, but regardless, I was covered by Visa.
Not that it matters, but the claim was denied because the credit card company said that my credit limit was too low to qualify for the insurance. Not the available credit, the credit LIMIT (I know, it doesn't make sense to me, either). Even the rental company said that they had never heard of that before, which is why they tried to help me settle it with Mastercard. It was a gold Mastercard, and I carefully checked in advance of my trip (several times) to be sure that I was covered. In each case, I was told I was, indeed, covered. I had the paperwork that "proved" it, and I refused the rental car insurance as the rules instructed me to do. And my limit was the same on the day of the accident as it had been on the several days that they told me I was covered. Incidentally, the only charge on my card was the car rental itself - even if the car had been totalled there was plenty of available credit on the card to cover it. But because the damage was under $500, it wasn't worth fighting the insurance company's refusal legally, and they probably knew that. I just paid it.
Nancy, that's good to know. I always rely on my cc card (Visa though) for insurance and I think before I rent next time, I'll call and ask about this. Since your rental company hadn't ever heard of this hopefully it's very uncommon.
FYI,
It doesn’t sound like it applies in this case but there are some problems with the credit card care rental insurance.
1) It specifically excludes some countries. Ireland is often excluded.
2) It may not cover the charges for the loss of use of the car. For example if you dent a fender, it might take a week to get it repaired. In addition to the cost of the repair the car rental company will also charge you for an extra week’s rental at what is likely their highest rate.
Greg
Susan last summer we too hit a bollard while in France. I had contacted our Visa office and was assured we were covered, no deductible. Of course I was doubtful but low and behold they covered us with no problem. I think this is helpful though so we all can ask about your issue too. Also we should check each year as these services can change.
We scraped our rental car in Italy last year. Also hit a bollard and dinged a side mirror (there's no car in Italy driving around with two intact side mirrors ...). Visa covered the entire cost with no deductible. Ours is a CIBC Visa Aerogold.
Nancy's MasterCard would not honor her claim, but Visa honored claims filed by others. Assuming the situation is exactly as Nancy describes it, maybe the problem is with MasterCard instead of credit card insurance, in general. I carry Visa cards but have never used one for rental car insurance. Since rental agencies charge almost as much for insurance as for the car, I am thinking, however, of buying insurance through American Express for a car rental on a trip in March. Has anyone had experience, good or bad, with AmEx?
The problem could well have been with Mastercard, but it doesn't make me want to trust any credit card insurance again. To be clear, I didn't buy insurance through Mastercard, this was the insurance that is supposed to be automatic when you use the card to rent a car. To activate the coverage, though, you have to turn down what they try to sell you at the rental counter. Now I'm willing to pay a bit more to KNOW that I have insurance, rather than finding out the hard way that I don't, no matter whose fault it might be.
Just be sure you really DO have insurance if you buy a policy, Nancy. I bought a policy from TravelGuard (which Rick Steves used to recommend checking out). It was $9/day and sounded pretty good. However, after purchasing I noticed that the information TravelGuard provided was not the actual policy, just a summary. I requested the policy and was told I didn't need it, the summary was "what we go by." However I insisted and received the policy in the mail a week later, a few days before my trip. The policy said it didn't cover the type of vehicle I was renting, a tiny, economy Citroen. The summary only mentioned exclusion of luxury vehicles such as Jaguar, Mercedes, Lamborghini, etc. I complained and got a full refund but it is this type of behavior by insurers that makes me untrusting of the lot.
Always ask your credit card issuer if you card is covered. Here's a web site that lets you compare credit cards' rental car insurance policies. For example, Visa covers nearly every credit card, while MasterCard restricts coverage to their more elite levels. That may be the "limit" thing the poster was referring to. Check it out, and then call your bank to ask about your coverage, before you need it.
The big thing, as always, is to know what your card covers and what it doesn't and what you have to do to be covered.
Too many people think the insurance company uses discretion to decide what they will or won't pay. That couldn't be further from the truth.
In fact, the written explanation of the insurance benefit is a contract. The company has to pay what it says it will pay and they won't pay anything outside that.
The scariest part, from my perspective, is almost all of the policies have a statement to the extent of "this policy may change" so you need to make sure you have the most up-to-date explanation and do everything you are supposed to do correctly.
I have to say, I've never heard of the credit limit thing before. If you went to court, had the person who said you were covered, they remembered talking to you and were honest about what they told you - you would probably win. Unfortunately, that's a lot of ifs, the only reliable way is to only rely on what you have in writing.
When I went to a website to check out these coverages, I was impressed by the statement that, if you have an accident, you must provide certain documentation in order to be covered. One of the listed documentation was anything the credit card company feels is necessary. I'm sure they can always find some piece of documentation you forgot to get. And remember, you will be trying to get this documentation from someone who might not speak English well, if at all, all by international phone calls.
Remember, these are the same companies that raise your interest rate to the maximum just because you were on vacation and misswd your electric bill by a day. Trust them.
That's why I am a train convert now. If at all possible I take the train and just forget about all the hassles of car rentals.
"Visa covers nearly every credit card, while MasterCard restricts coverage to their more elite levels. That may be the "limit" thing the poster was referring to."
No, it is not what I was referring to. I was referring to Mastercard knowing my credit limit, having the documentation showing that my "level" was covered by the insurance, checking and having them tell me repeatedly that I DID have the insurance, and then refusing to pay my claim for some reason that they dreamed up later. I checked in advance, I followed their rules, and they still refused to pay. You can ask in advance if you are covered all you want, and they can still lie to you. And since I had the documentation "proving" that I was covered, etc., yes, I probably would have won in court, but it would have cost more to fight it legally than to pay the bill, which is probably what they were counting on.
Before going to Spain I phone the CC company and they assured me that I was covered, no matter what. We had a small accident and when I phoned the CC from Spain to see if there was anything I had to do with the rental company while still there, they told me I might NOT be covered.
Luckily the rental car company deemed the damage insufficient to charge us, but it has scared me for future car rentals.
Last time out I purchased insurance through the rental car company. On returning the car, I was dinged for a scratch on a hubcap. But they made no attempt to charge me for it, possibly because I had purchased their insurance. I have been giving serious consideration to refusing the insurance for my trip next spring and relying on American Express or Visa to cover me. These posts have me thinking seriously about again paying the extra amount for insurance through the rental car company. Sure, it is another $25 a day or more, but that might well be worth it for the peace of mind. I still have not made up my mind, but these kinds of situations seem to pop up every few days. I am not sure I want that kind of grief on vacation.
The problem with purchasing the rental companies' CDW is that there is usually a very large deductible. You can then purchase even MORE coverage to reduce that deductible to 0. Either way you're gonna pay :-)
I am taking into account the extra cost for a lower deductible. The initial cost for a high deductible is low but leaves you vulnerable for up to $750 or E750, which leaves plenty of room for unscrupulous rental offices to bill you for imaginary dents and dings to the car. The insurance cost triples if you want to bring the deductible down to $100 or E100, or less. It is not a good deal, but, when we spend two or three thousand dollars on a trip, the extra $200 or $300 on a week's rental may be worth it for peace of mind.
This summer, I got the basic CDW through the rental company, which didn't cost much more than just the rental, and then bought a policy through a 3rd party company to cover the 1100 euro deductible. It cost about a third as much as the super CDW through the rental company. It was more work, we did have to file a claim, which meant paying the deductible to the rental company and sending a lot of paperwork to the insurance company to get reimbursed. But it still saved us about $100, so I think it was worth it.