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Insurance on Rental Car w/ Credit Card
Old 07-26-2015, 02:59 PM   #1
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Insurance on Rental Car w/ Credit Card

How does this work in coordination w/ personal auto insurance? My understanding is that personal insurance is primary and cc insurance is secondary so personal insurance does not cover deductible but cc insurance does (for collision). Rental cars are most often current or newer models but personal autos are often older. Does the personal policy cover the rental car for its full value or only up to the limits of the highest value car that you own?
If the latter, does the cc insurance cover the amount over that limit up to the total value of the car? The cc insurance also covers loss of use charges that the personal policy doesn't.
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Old 07-26-2015, 04:47 PM   #2
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Unfortunately, I speak from experience. I backed into a pole in Las Vegas and screwed up the rear fascia pretty good. If I recall (I was in Vegas, after all) I paid the $500 deductible and MasterCard picked up the rest. I could have turned the $500 in to State Farm, but will only file a claim with them if absolutely necessary.


I can't answer all your other questions, but just thought I'd report a real life experience. It was necessary that I used that particular credit card when I made the reservation in order for them to process the claim.
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Old 07-26-2015, 04:56 PM   #3
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Ran across this article a couple of days ago. Not sure if it helps with your question, but...

What your credit card actually covers when you rent a car - MarketWatch
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Old 07-26-2015, 05:12 PM   #4
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There are some credit cards that offer primary coverage. Chase Sapphire Preferred is the one that I use. In the past, for longer rentals, I used Amex, but you had to sign up for primary coverage and it cost $25 per rental.

It's always a good idea to read over your credit card rental insurance coverage before you use it. This way you can avoid any unpleasant surprises if you need to make a claim.
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Old 07-26-2015, 05:12 PM   #5
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it depends on the rental car companies out of service terms and the amount of damage.

your own insurance covers you when you drive a rental . however if the rental car company charges you out of service fees they will not pay for that.

the credit card company's will cover that however there is one problem.

in their agreement with you in the fine print it says they require a utilization report.

what that means is if you had a ford taurus and it was out of service for a week and there were 9 other ford tauras's on the lot not being used they will not pay the full amount .

but the issue is that utilization reports are confidential information for a leasing company . they do not want competitors to know what they have that moves or doesn't so they do not give them out.

that gives the credit card company the out not to pay that fee at all since no report , no money ..
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Old 07-27-2015, 12:23 PM   #6
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Thanks, all, for the helpful replies. I was mostly concerned about the coverage on the physical rental car if I was at fault (not liability) . Somehow I had in my mind that the coverage might be limited by the value of my own vehicles which are older and less valuable than a current yr rental car.......don't know where I got that idea but fortunately my insurance guy confirmed that I would be covered for the full current value of the rental car as if I owned it myself (no upper limit; and under the collision coverage not under the 50K property damage that one of his employees was trying to tell me.......)

mathjak.....thanks for that info on loss of use......so if cc company declines to pay because of no info, can I get out using the same excuse?
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Old 07-27-2015, 04:31 PM   #7
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Nope ,you have no agreement to be able to get out of it with rental company.

The credit card company has one with you though.
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Old 07-27-2015, 10:57 PM   #8
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I use American Express when I rent cars (infrequently). For $28 dollars American Express covers all damage for a 45 day long rental. Rent longer and you have to re-rent for another 45 days.

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Old 07-28-2015, 03:19 AM   #9
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becareful with american express , as i said that utilization report is their out .

"If I have full coverage, will I be responsible for any extra fees?
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.

American Express, MasterCard and Visa (but not Discover) 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 so check your state .)
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Old 07-28-2015, 08:33 AM   #10
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mathjak.........thanks. That makes sense. I wonder which card is best for avoiding that problem........I guess if the card company needs that report, it wouldn't matter.......but are they all that fussy about needing the report?
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Old 07-28-2015, 09:29 AM   #11
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Originally Posted by kaneohe View Post
mathjak.........thanks. That makes sense. I wonder which card is best for avoiding that problem........I guess if the card company needs that report, it wouldn't matter.......but are they all that fussy about needing the report?
1. Insurance companies (including those that insure the credit card folks) want to see evidence that the damaged vehicle would have been rented, and what percent of the time, during the period it was unavailable due to the accident before paying "loss of use" charges. This was caused by rental companies assuming the car would have been rented 100% of the time, even in situations where similar models sat on their lots unrented. The rental companies, to pad their claim, simply rubber stamped "100% utilization loss" on the claim despite the fact they might have had no shortage of similar models during the repair period. Padding amounts for an insurance claim? What a surprise!

2. If your credit card company does not pay the "loss of use" part of the claim, you can also chose to not pay it. The bill will be itemized and you can pick and chose. The friendly rental folks may then take you to court where the judge may ask them to provide proof of "loss of utilization." They may chose not to do that. Of course, going to court involves other risks, lawyers, etc., and you might be better off letting them have their way with you.

The easiest way, if you can get it all figured out and find the right card and insurance co, is to have coverage. Before renting (which is very seldom for us), we call our State Farm agent and give him the particulars including rental company, state, etc., and get his okey-dokey that we're covered and any details of the coverage (deductibles, etc.) we should be concerned about. I understand that this would be a pita for anyone who rents frequently and/or spontaneously.
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Old 07-28-2015, 11:36 AM   #12
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Thanks to the posters above for so capably writing about this often misunderstood subject.


What so many people don't realize is that most rental car companies are uninsured on physical and comprehensive damage. Some don't even have liability insurance. They pocket the CDW money, and pay damages out of that pool of money. And with their outrageous CDW rates in most states/countries, CDW is just another profit maker.


In most cases, either the renter's personal insurance policy will pay or they'll go back on the credit card that offers coverage. There's no reason for most people to be triple insured and purchase the rental company's CDW coverages.


Rental car companies purchase cars from auto dealerships, but they don't pay for the cars for a month after delivery--while the cars are rented. Their first car payment to finance companies comes in another month--while they continue renting the cars. And when they sell the cars, they don't make the last payment--pocketing another month's rental receipts. Their profits are essentially the 3 month float and all the income off the CDW charges.
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Old 07-28-2015, 10:14 PM   #13
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Also to watch for: credit card company coverage covers cars only if they are worth up to a set market value. Not long ago I found that one of my credit cards would not cover a rental car if the market value of the car exceeded $50k. A different card had a different limit. So if you rent better/luxury cars, you may need to know how expensive a car is before your credit card doesn't actually cover it.


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Old 07-30-2015, 03:39 PM   #14
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Thanks for this timely topic. I am renting a car next week and needed this info. I just got off the phone with American Express and they mentioned the $50,000 car value limit. Since I am renting a basic compact car...not an issue. I only rent a car every few years so it is always a concern to determine the safe, economical way to do this.


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Old 07-30-2015, 04:01 PM   #15
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What so many people don't realize is that most rental car companies are uninsured on physical and comprehensive damage. Some don't even have liability insurance. They pocket the CDW money, and pay damages out of that pool of money. And with their outrageous CDW rates in most states/countries, CDW is just another profit maker.

Actually the companies self insure. As indeed to most large companies up to some limit. For example for a fortune 500 company its cheaper to reserve on your books than pay an insurance company the fee to reserve for you. If you have a large enough fleet then the law of large numbers that makes insurance work works for you. It is just like most large companies don't really buy health insurance for their employees rather they pay the claims directly and just use and insurance company to process the claims etc.
To take an example I am not sure about but if you think about it Bill Gates does not need collision insurance on any cars he drives he can absorb the risk. He might have a high deductable liability policy however.
But if you think about it the insuance company takes your money and gives out a percentage of the premium as claims and absorbs the rest as expenses. It is cheaper for a large company to hire folks to manage the claims and pay them directly.
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Old 07-30-2015, 04:21 PM   #16
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To take an example I am not sure about but if you think about it Bill Gates does not need collision insurance on any cars he drives he can absorb the risk. He might have a high deductable liability policy however.
As an alternative to auto insurance, I do believe you can get a surety bond or deposit funds (I think around $30-50K) to the state.
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