Question
I have a Visa Signature credit card and this card has Auto rental insurance benefit.
My question is:
Is an authorized card user (I request an additional card for her. She is not my spouse.) eligible for the car rental insurance benefit when she uses this additional card to rent car?
Thanks.
Answer
Originally posted by king3820:
I have a Visa Signature credit card and this card has Auto rental insurance benefit.
My question is:
Is an authorized card user (I request an additional card for her. She is not my spouse.) eligible for the car rental insurance benefit when she uses this additional card to rent car?
Thanks.
Boy! You should have never authorized or get additional card for anyone under your account other than your spouse or a very responsible close relative. They can charge and charge and charge, and when it comes to the bill, you're responsible.
Anyhoo, she is entitle to the insurance benefit. But then again, you may want to read your policy on secondary card holder.
[This message has been edited by freeasabird (edited 07-30-2003).]
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And consider just what the insurance benefit is... since only Diners Club offers PRIMARY insurance...
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Originally posted by gleff:
And consider just what the insurance benefit is... since only Diners Club offers PRIMARY insurance...
True - but only in the US. In Europe, other countries you get a PRIMARY insurance with Visa. At least that's what the fine print on my says.
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You also get primary insurance if you have a business Visa Platinum card.
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It is always primary if you don't own a car (and consequently do not have owned car insurance). This is why in places like Boston and NYC, the rental car insurance with the credit cards is such a good deal.
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fastflyer,
Which card are you talking about?
Thanks.
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Originally posted by king3820:
I have a Visa Signature credit card and this card has Auto rental insurance benefit.
My question is:
Is an authorized card user (I request an additional card for her. She is not my spouse.) eligible for the car rental insurance benefit when she uses this additional card to rent car?
Thanks.
king3820
Actually, nobody answered your question yet.
Did you find out by calling your CC company? I also would like to know, if a second card holder gets the insurance benefit or not.
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I called Visa regarding the Auto Rental Insurance benefit for additional (secondary, authorized) card holders few minutes ago.
The answer is: YES (additional card holders whoese names are on the cards are all eligible for the Auto Rental Insurance, CDW/LDW).
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king3820:
Thanks!
But watch out. In some countries you don't have insurance with the cc: Israel, Jamaica, Ireland ...
Thanks again.
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king3820:
Sorry about the delay in my response.
My car rental card is a Capital One Platinum MasterCard (BTW, they also verified to me that all embossed names on the card are considered 'cardholders,' including for insurance purposes). But the primary insurance coverage, as I understand the language of the insurance policy, kicks in when a driver is "uninsured." That applies to those of us who do not own cars (and hence have no car insurance). Both Visa and MC's coverage is primary in this case because there is no other insurance to which to be secondary.
In case of an accident, they may suspend charging privileges on the account. Perhaps someone with experience in this regard could address this. I and my partner use one MC account for car rentals only. We use other cards for regular charging. The car rental card is embossed with both names, and coverage is primary as we live in Boston and NYC and do not own cars.
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fastflyer,
Thank you very much.
Now we have conclusions (in case the primary card holders are eligible for the CDW/LDW):
1. Visa and MasterCard both provide CDW/LDW for additional (authorized) card holders.
2. MasterCard also provides Liability insurance for Auto Rental for those who don't have Liability insurance (for all primary and authorized card holders).
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Credit Card coverage for loss of usage and storage fees...does anyone know?
Those rental car counter clerks always tell me that the credit card coverages doesn't cover the loss of usage and storage fees while a vehicle is in the repair shop, even when for example a Visa/MasterCard has CDW/LDW coverage.
Is this true?
[This message has been edited by whiskey0888 (edited 08-16-2003).]
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FWIW my Platinum Canadian-issued Visa does NOT cover SUVs (four-wheel-drive) or any van larger than a mini-van, e.g. a 14-pax van.
I'm sure this varies within jurisdictions but I only found that out at some point some years after renting both a brand new Ford Expedition (an upgrade), and a big Ford van loaded with passengers for a family wedding in both the U.S. and Canada, so it's worth doublechecking that aspect as well, if you have not done so.
I confirmed my e-mail in advance with the Visa reps that I could drive my French rental car into Italy without a problem.
I would never believe a word that anybody at a car rental counter says - don't mean to offend but that's based on a number of experiences over the years.
Cheers,
Fredd
Answer
Originally posted by king3820:
fastflyer,
Thank you very much.
Now we have conclusions (in case the primary card holders are eligible for the CDW/LDW):
1. Visa and MasterCard both provide CDW/LDW for additional (authorized) card holders.
2. MasterCard also provides Liability insurance for Auto Rental for those who don't have Liability insurance (for all primary and authorized card holders).
So, if I use my AAdvantage MC, LDW *and* liability are taken care of, even if I've just sold my car and discontinued my insurance? I'm asking this question because I was told that in CA rental agencies don't include liability in the cost of rentals (Dollar, in my case). Not sure if it's true.
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2. MasterCard also provides Liability insurance for Auto Rental for those who don't have Liability insurance (for all primary and authorized card holders).
With what mechanism does MasterCard provide Liability insurance coverage ? Even Diners doesnt provide Liability.
Primary Coverage does not equal Liability coverage. But many states require car rental companies to provide VERY minimum(5k, 10k, varies by state) liability coverage on every rental.
[This message has been edited by Alcibiades (edited 10-01-2003).]
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Alcibiades, thanks for the reply. How would you go about finding out whether a certain state (say CA and HI) mandates liability insurance for rental cars? The reps at Dollar (& Thrifty, & Alamo, etc.) don't seem to know this kind of info.
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I am not sure, you might have to search around, as I read about this on another board. I just wanted to make sure people w/o other insurance dont rent a car with a credit card providing Primary CDW coverage, have a serious at-fault accident, and then get sued for house and home.
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Interesting,.,,,,
Wonder if you could share as to which cards offer liability insurance as well.
the other question, related, is that is there a default liability insurance built into the rentals??? or is the 10/day liability cover worth it? http://www.flyertalk.com/forum/smile.gif
Originally posted by king3820:
fastflyer,
Thank you very much.
Now we have conclusions (in case the primary card holders are eligible for the CDW/LDW):
1. Visa and MasterCard both provide CDW/LDW for additional (authorized) card holders.
2. MasterCard also provides Liability insurance for Auto Rental for those who don't have Liability insurance (for all primary and authorized card holders).
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great question on whether the $10/day liability is worth it or not. in another post, a poster said supplemental liability insurance was a misnomer, that is actually a waiver and not insurance. not sure what the poster meant. i thought by purchasing $10/day liability and using a card with primary CDW coverage that i would be all set.
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Wonder if you could share as to which cards offer liability insurance as wellHavent found one yet. Various message boards say none exist. Its probably impossible to gauge potential liability, as a twice convicted DUI driver and thrice convicted speeder could use a MasterCard and rent a car very easily.
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in another post, a poster said supplemental liability insurance was a misnomer, that is actually a waiver and not insuranceThats a good question. A car rental company could also have liability problems if this was real Liability insurance covering an at fault accident, and most importantly covering damage to Life and Limb etc. That could be millions if somebody died or was paralyzed.
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Some additional information below. Long story short, personal liability is not included in credit card insurance when primary. For MC at least, loss-of-use charges by the rental car agency appear to be covered.
I am not sure how one would handle an at-fault liability situation. This would be probably one of those situations where people seek bankruptcy protection to save their home, etc.
Aren't at-fault judgments for car accidents extremely rare?
FROM THE MASTERCARD WEBSITE
The kind of coverage you receive:
· MasterRental will pay for covered damages up to $50,000 per incident for which the cardholder or any other authorized driver is legally responsible to the rental agency on a secondary basis. This means that after your primary/other insurance has paid its limits, MasterRental will cover:
(a) the insurance deductible (or your employer's insurance deductible if you are traveling on business). Note: By law in certain states, losses to rental vehicles in the United States, US. territories and possessions, and in Canada are considered under the liability portion of your personal auto policy. In most cases, no deductible will be applied and you may not receive any benefit from this program. Please, always, contact your insurance carrier for full coverage details pertaining to your personal auto policy.
(b) any reasonable and customary repair cost not covered by any other coverage (or your employer's coverage, as the case may be).
· If you have no other insurance or your insurance does not cover you in territories or countries outside of the U.S. coverage is primary.
· If no other insurance is applicable, coverage is primary, which means you do not have to seek coverage from any other source before receiving coverage under this program.
Coverage will be provided for:
· Up to $50,000 per incident on claims for which the cardholder or any authorized driver are legally responsible to the rental agency:
(a) physical damage and theft of the vehicle up to its market value, not to exceed $50,000.
(b) reasonable and customary charges imposed by the rental car company for the period of time the car is being repaired ("Loss of Use" charges) that are substantiated by a Fleet Utilization log.
(c) reasonable and customary towing charges to the nearest qualified repair facility imposed by the rental agency on a covered loss.
Who is covered:
· The MasterCard cardholder and those designated in the auto rental contract as authorized drivers are covered.
Which vehicles are covered:
· Most are, including all minivans and sport utility vehicles that are designed to accommodate nine passengers or fewer, when used on bound surfaces such as concrete or tarmac.
Excluded rental vehicles:
· Vehicles with a MSRP of greater than $50,000. All trucks, pickups, full-size vans mounted on truck chassis, campers, offroad vehicles, and other recreational vehicles. Trailers, motorbikes, motorcycles and any other vehicle having fewer than four wheels, antique cars (cars that are over 20 years old or have not been manufactured for at least 10 years), limousines. If you have any questions, or to confirm coverage for a particular vehicle, call [1-800-MC-ASSIST].
· Trailers, motorcycles and any other vehicle having fewer than four wheels, motorbikes, antique cars (cars that are over 20 years old or have not been manufactured for at least 10 years), limousines, expensive or exotic cars (for example, Corvette, Mercedes-Benz, Porsche, Jaguar, Hummer, Land Rover).
· If you have any questions, or to confirm coverage for a particular vehicle, call 1-800-MC-ASSIST.
· Outside the United States expensive or exotic cars are not excluded.
Where you're covered:
· In general, coverage is accepted worldwide, but there are exceptions.
· You may be unable to use this service in Australia, Ireland, Israel, Italy, Jamaica, and New Zealand. Please contact your car rental company before you travel.
· Coverage is not available where prohibited by law.
What is NOT covered:
· Any loss that occurs due to driving, or being charged with driving, under the influence of drugs or alcohol, or reckless driving, or being charged with reckless driving, unless found not guilty of any charge.
· Items stolen from in or upon automobiles, other vehicles or common carriers.
· Coverage is not all-inclusive, which means it does not cover such things as personal injury, personal liability or personal property. It does not cover you for damage to someone else's car or property, your property or personal property inside the car. It does not cover you for any injury to any party.
· Coverage is not provided for any obligation you assume other than that which is covered under this program or your personal auto policy.
· Any loss that occurs while you or an authorized driver is in violation of the rental agreement.
· Loss due to driving while under the influence of drugs or alcohol, or reckless driving.
· Losses involving unauthorized drivers.
· Losses involving the theft of the rental vehicle when the renter or authorized driver cannot produce the keys to the rental vehicle, as a result of negligence.
· Mechanical failures caused by wear and tear, gradual deterioration or mechanical breakdown.
· Subsequent damages resulting from a failure to mitigate damages once a loss has occurred.
· Blowouts or tire/rim damage that occurs independently of vehicle damage/theft or vandalism to the rental vehicle and/or tire, or that has been proven to be the proximate cause of further damage to the rental vehicle.
· Collision/loss damage waiver coverage purchased through the car rental agency.
· Any damage that is of an intentional or non-accidental nature, caused by the renter or authorized driver(s) of the rental vehicle.
· Depreciation, diminishment of value, administrative, or other fees charged by the rental car company.
· In no event shall coverage be provided when a cardholder rents a vehicle beyond 15 consecutive days/31 consecutive days from the same Rental Company, whether the original agreement is extended, a new written agreement is entered into, new vehicle is rented, unless a 72 hour period has passed, from the date the original rental vehicle was returned. However, a new vehicle rented in a different city from the same agency, at least 50 miles from the previous rental agency, is permitted.
· Losses resulting from any kind of illegal activity.
· Damage sustained on any surface, other than a bound surface such as concrete or tarmac.
· War or hostilities of any kind (for example, invasion, rebellion, insurrection, riot or civil commotion); confiscation or damage by any government, public authority or customs official; risks of contraband, illegal activity or acts.
· Any loss involving the rental vehicle being used for hire or as a public or livery conveyance.
· Theft of or damage to unlocked or unsecured vehicles.
· Value added tax, or similar tax, unless reimbursement of such tax is required by law.
Final Legal Disclosure: Receipt and/or possession of the Guide to Benefits does not guarantee coverage or coverage availability. These benefits are provided exclusively with MasterCard [Gold/Platinum] cards that have a credit line of $2000 or more, or otherwise with cards expressly offered with such benefits by the issuer.
Edited to remove extraneous glossary entries.
[This message has been edited by fastflyer (edited 10-01-2003).]
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So, what do New Yorkers do (the ones who don't own a car), or visitors from oversea?
Is there a way to buy liability insurance if you don't own a car (I mean, besides paying the murderously high rates charged by car rental agencies)? Would AAA help here?
I did a bit more calling around, and at least Thrifty and Dollar don't provide *any* liability coverage included in the rental charges (of course they provide it for an extra fee).
Is there any way around this problem?
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AAA on hertz does have some liability coverage - 50/25/10, but it lloks miserly, considering the liability potential. but still, 10-12 bucks a day is ... http://www.flyertalk.com/forum/frown.gif http://www.flyertalk.com/forum/frown.gif
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Originally posted by IaLTO:
AAA on hertz does have some liability coverage - 50/25/10, but it looks miserly, considering the liability potentialSo if you rent at Hertz and just show your AAA membership card, you actually get some liability coverage, even if you dont have any car insurance whatsoever ?
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I'm not 100% certain of this, but I believe a personal umbrella insurance policy will cover you for liability involving car rentals. I know that these policies are applicable world-wide.
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Originally posted by MileKing:
I'm not 100% certain of this, but I believe a personal umbrella insurance policy will cover you for liability involving car rentals. I know that these policies are applicable world-wide.
They will, but many insurance companies won't give you an umbrella policy unless you have auto insurance. If you don't have a car, they'll sell you non-owner car insurance first, before you can get the umbrella.
d
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Any advice on specific insurance companies for this personal umbrella, non-owner car insurance. Right now I have AIG, but if they offer these products, they're not telling me.
Thank you all so much for all this useful info so far. http://www.flyertalk.com/forum/smile.gif
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Originally posted by honu:
Any advice on specific insurance companies for this personal umbrella, non-owner car insurance. Right now I have AIG, but if they offer these products, they're not telling me.
Thank you all so much for all this useful info so far. http://www.flyertalk.com/forum/smile.gif
AIG is a big company and I bet they offer both non-owner car and umbrella coverage. Check with your agent and if he/she doesn't seem informed, tell them you want to talk to someone who regularly handles umbrella policies.
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I just read the insurance section on Hertz and I am baffled that there is a sentence saying LDW (Loss Damage Waiver) and LIS (Liability Supplemental Insurance) is not insurance. What's the difference between insurance and a waiver? There's also no explanation as to why it isn't insurance, although it seems to me that it works like insurance. Is it better that it's a waiver instead of insurance?
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Originally posted by Magna:
I just read the insurance section on Hertz and I am baffled that there is a sentence saying LDW (Loss Damage Waiver) and LIS (Liability Supplemental Insurance) is not insurance. What's the difference between insurance and a waiver? There's also no explanation as to why it isn't insurance, although it seems to me that it works like insurance. Is it better that it's a waiver instead of insurance?
I'm guessing but perhaps calling it insurance would subject Hertz and the offered coverage to regulation by the 50 state insurance commissioners who generally have authority to approve all terms, including rates.
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Quoted from AAA member benefits on hertz
>>>>>>>>>>>>>>
Primary Personal Liability Protection
AAA members receive Primary Personal Liability Protection of 25/50/10 ($25,000 per person, $50,000 per accident and $10,000 property damage) in most states. This is protection for claims filed by a third party, i.e., passenger, passenger in another vehicle, etc (U.S. Only)
Originally posted by Alcibiades:
Originally posted by IaLTO:
AAA on hertz does have some liability coverage - 50/25/10, but it looks miserly, considering the liability potentialSo if you rent at Hertz and just show your AAA membership card, you actually get some liability coverage, even if you dont have any car insurance whatsoever ?
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My understanding is that they are waivers, ie, the rental company (or the card company) would not hold you liable for claims against them (due to accidents caused by you driving). They infact do have insurance, which will be applicable. The effect is the same, but you do not enter into a insurance agreement with them, so less paperwork. http://www.flyertalk.com/forum/smile.gif
Originally posted by Magna:
I just read the insurance section on Hertz and I am baffled that there is a sentence saying LDW (Loss Damage Waiver) and LIS (Liability Supplemental Insurance) is not insurance. What's the difference between insurance and a waiver? There's also no explanation as to why it isn't insurance, although it seems to me that it works like insurance. Is it better that it's a waiver instead of insurance?
[This message has been edited by IaLTO (edited 10-05-2003).]
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Thanks to everyone who posted info and suggestions in reply to my question of a few days ago. Thanks especially to Doppy, who offered the magic words: non-owner insurance. Once I started asking about this specific tyoe of insurance, an AIG rep woke from a deep slumber and transferred me to the right dept. So it can be done! This is gonna save me a bundle over the next two months. Thanks again FT!
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Anyone out there with any real-world experience with a liability suit related to a non-owner rented car where credit card insurance was primary?
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Originally posted by fastflyer:
Anyone out there with any real-world experience with a liability suit related to a non-owner rented car where credit card insurance was primary ?My friend wasnt sued, but he had to pay for all the damage on the car he hit since primary coverage does not cover liability.
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Originally posted by gleff:
And consider just what the insurance benefit is... since only Diners Club offers PRIMARY insurance...
AMEX for a fee of I think $25.00 per rental will cover you as primary
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Originally posted by Doppy:
They will, but many insurance companies won't give you an umbrella policy unless you have auto insurance. If you don't have a car, they'll sell you non-owner car insurance first, before you can get the umbrella.
d
My understanding of umbrella policies is that if you have a million dollar umbrella it requires that you have 300k of auto liability and x amount of other types of insurance(homeowners, renters, boat etc...). If you have an auto accident and you don't have the 300k of auto insurance you are responsible for the first 300k and the umbrella picks up from 300k to a million. So If you have an umbrella read in it what your requirements are for other types of insurance.
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Please correct me if I am wrong on these, but as per my understanding.
1. The difference between Primary and Secondary coverage is only there when you have alternate coverage. So, if you do not have a car, any CDW/LDW coverage will be trated as primary.
2. AAA does offer PRIMARY liability insurance as well. (posted earlier).
Thse 2 combined should cover non-insured renters fully (upto the specified limits) without taking any additional insurance.
IaLTO
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IaLTO:
Your first statement is correct.
However, as I posted in the MasterCard rental language above, liability insurance is not a part of the credit-card-provided insurance coverage (nor of the rental car company CDW). If you are in an at-fault accident, you are personally liable for damage to the other party's person and property. Could be millions of dollars in liability, potentially.
So, things are covered if you hit a deer or a tree, but could be problematic if you hit another car or injure a pedestrian.
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His 2nd statement about AAA membership and liability coverage has nothing to do with credit cards.
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I'm a senior rental agent at a franchise of a well-known nationwide car rental company. Perhaps I can straighten up a little bit of the confusion in this area.
Most credit card coverage consists of a "CDW"-type coverage that is secondary to any other insurance policy you may have.
Let's try an ideal circumstance. Let's say you have an auto insurance policy that covers comprehensive and collision damage to your vehicle with a $500 deductible (and that insurance policy DOES transfer to your rental car). You cause $7,000 of damage to a rental car. Your insurance company will pay for $6,500 of the damage and your credit card company will pick up the $500 that you owe.
Here's the way it really works. You cause $7,000 worth of damage to your rental car (say, by totaling a Dodge Neon -- this happens a lot where I rent cars). You and the rental agency submit a claim to your insurance company for $8,295 -- that includes the $12,000 of damages, the $150 50 mile towing bill, the $945 for the downtime or "loss of use" ($45/day for the three weeks the car is in the shop), and a $200 administrative fee (since the rental accounting office will spend 5 or 6 hours on this case).
Your insurance company comes back to the rental agency and says, "We'll pay $6,500. We won't cover downtime, towing, or any administrative fees." So, the rental agency accepts a check from the insurance company for $11,500 and bills you for the remaining $1,795. You say, "Heck no, I'm not paying $1,795! My credit card is supposed to cover me." So, you and the rental agency submit a claim to the credit card company. The credit card company sends the rental agency a letter that says, "We will cover the $500 deductible that the customer owes, but we don't cover downtime or towing or any additional fees." (This is why I said "CDW"-type coverage as opposed to "LDW" or "PDW." CDW or "Collision Damage Waver" usually covers collision only; LDW or "Loss Damage Waiver" and PDW or "Physical Damage Waiver" will cover more than just the collision.)
After accepting a $500 check from your credit card company's claims department, the rental agency sends you another bill, this time for $1,295. You refuse to pay it. The battle wages between you, your insurance company, and the rental agency for six months. The rental agency's general manager (the franchise owner) decides to be generous and waive most of the administrative and towing fees, reducing your bill to $1,000, and asks you if you'll pay. You still refuse. After a court battle (in which the rental agency usually wins) and you still refuse to pay, the rental agency sends the bill to collections. It collects $500 and the collections agency takes the other $500, and you're left with a scar on your credit history. You're also added to the Do Not Rent list for the area's rental agencies.
Sound like a horror story? This happens all the time. It gets worse, too -- our franchise owner is more generous than most and often waives excess fees -- including downtime. Often the credit card company will refuse the claim because a) you didn't "file promptly" (within 48 hours of the accident), b) an unauthorized driver was driving the car, c) the charges were split between two different cards (they will only cover you if all charges are on that card), d) the car was rented for a two weeks and two days days (most cards will only cover you up to 15 days), e) you had upgraded to a specialty vehicle or SUV, or any number of other reasons. They're a for-profit company offering you something free, and they will use any excuse to not pay if they don't have to.
Don't forget that all this has taken hours of phone calls and dozens of pages of paperwork on your end.
So here's what I say: if you like taking chances, then by all means, rely on your car insurance and credit card. For some people, however, the sheer hassle and thousands of dollars worth of charges left to you are worth the $15 a day for the damage waiver (so called because the rental agency "waives" its right to collect damages from you -- it's not insurance because there are no claims involved, just a simple write-off). Plus, say you rent a car for two weeks. A new windshield on a 2005 model minvan can run upwards of $450. Your insurance deductible is $500. What's $15x14? $210. The damage waiver is half the cost of a new windshield -- which you will be stuck with if you crack it since your deductible is $500.
I'm not sure about other companies or locations, but we make almost nothing in profit on the damage waiver sales. I'll give you a hard-numbers example. For our busy summer season, our location sold about $50,000 in damage waiver. We've had six cars totaled over the summer. Of those, two -- one luxury car, worth $30,000, and one compact car, $15,000, took our damage waiver. Being self-insured for damage, we absorbed the cost of repairing those cars. Between those two totals and the miscellaneous windshield cracks, door dings, and fender benders, we were actually in the red in our car damage/self-insurance bank account.
One other thing about credit card coverage. The local Enterprise agency is the only major national agency that will rent a car to renters under 21. They require proof of full coverage (comprehensive and collision) on the renter's personal auto insurance policy. They will NOT accept a credit card as valid coverage. Even they recognize how stringy credit card coverages are. (They also won't let under-21ers purchase their C/L/PDW.)
Now, rumor has it that SOME credit cards, such as Diner's Club, American Express (with the $25-per-rental option enabled or whatever it is), and perhaps some business cards, cover damage primary to any other insurance and also cover downtime and other fees. That's something I can't verify. All I know is the cards I carry -- the Alaska Airlines Visa Signature, the United Airlines Visa Signature, the MBNA AOPA Cash Rebate Platinum Plus Visa, the Costco Platinum Cash Back American Express, and the Costco American Express Business Charge Card -- are not that way.
Someone also said earlier that MasterCard will cover downtime. That may or may not be the case. I saw a letter from MasterCard come through our office that refused to cover downtime. (Actually, seeing that letter was what finally convinced me that the rental agencies' L/C/PDW coverages *were* a good idea. After I saw that, my ability to sell the damage waiver as a rental agent jumped tenfold, because I now believed in what I was selling.)
One last note on CDW: the terms "primary" and "secondary" are only relative terms. If you do not carry your own insurance policy with comprehensive and collission, or your policy does not transfer to a rental car, yes, your credit card becomes "primary." Be wary of what they will and won't cover, however.
Note that some card policies do claim to cover downtime and other fees. Check carefully because they often leave themselves an escape clause (such as making the rental agency prove they've lost revenue over the car's defleeted status), leaving you with the bill. I have yet to meet a card company that has absorbed all of those types of charges.
Lastly, about liability: to my knowledge, no credit card covers liability. (Think logically: what credit card company in their right mind would set themselves up for a multimillion dollar claim or lawsuit, especially without charging the customer for it!) Rumor has it that one American Express business card MAY provide that coverage, but I cannot confirm that based on my experience.
In the state I live, rental agencies are not required to provide any minimum liability insurance included in the rental rate. If you cause an accident and the third party files a claim against you for the damage to their car, you and your insurance company are fully responsible. That's what the SLI or "Supplemental Liability Insurance" product is for, and yes, it is "insurance." By purchasing SLI, our rental agency extends its liability insurance policy over to your car for the duration of your rental. SLI becomes primary to any insurance you may carry, as well. (The amounts of coverage are well in excess of state minimums: $1,000,000 aggregate per accident.) Then the rental agency makes payments to its insurance company based on the number of people who take the SLI product.
Some states do require rental agencies to include a small amount of liability coverage to protect other drivers from uninsured renters, but most don't.
As for umbrellas and non-owner insurance, I can't directly comment on them because I have no personal experience with them.
That's basically it. I've shared my personal experience with this subject. I think it basically comes down to "How much of a risk-taker are you?" If you like saving a buck if it means there's some chance involved, then go ahead and rely on your own insurance. If you hate paperwork or are afraid of being stuck with a big bill, take the rental company's coverages -- there's no real way to be certain what you'll be covered for otherwise. All I can say is that I've seen most people left with a balance to pay.
I hope this little industry-insider view helps clarify. Feel free to post any questions and I'll do my best to research and answer.
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Here's an informative thread that deals with the issue of rental car liability coverage (including umbrella policies):
http://www.flyertalk.com/forum/showthread.php?t=298528
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Thanks jackal for the time you put into that post. when I see an insider explain something on FT I really wake up and listen. My gut tells me though that LDW etc... are really very profitable for the rental car companies nationwide over the long run. The way it is pushed so hard it makes me think it is very profitable.
Looking at my own personal car ownership experience the cost of full coverage insurance is only about 10% of the total cost.
using the example on this web page
http://pages.prodigy.net/jmiller.cb/s813.html
the insurance cost is $1,000 per year while the other cost (excluding gas) that are covered by the rental company total almost $7,000.
So why is it that the average person can operate a car only spending 10-15% on insurance but rental car companies often charge 50% or more of the total for full coverage?
Your response would be apreciated.
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Perhaps LDW is profitable nationwide. People in the area I live in are more prone to wrecks and damage, so perhaps that eats into our profit margin. Plus, our company values customer service above pretty much anything else, and we don't push our products as hard as, say, one of our competing companies who is known for that (we've had customers come over to our counter from said company's counter and complain about how hard they push the coverages).
Perhaps it is more profitable given a nationwide average.
SLI is a 60/40 split -- 60% goes to the insurance company and we get 40%. That's only $4 per day for us, and that percentage goes up with the more claims they get. Plus, they get a small percentage of our base revenue (our liability insurance technically will cover the renter if they don't purchase our SLI; it's just secondary to the renter's own insurance; plus, it has to cover our employees as they drive cars). So there's a little bit of profit there, but not much.
I think it ends up being more expensive than personal insurance for several reasons. One, the rental company is (usually) self-insured for damages. There's not many cars and customers to spread the cost of damages over, whereas a major car insurance company has hundreds of thousands or even millions of customers. Two, people tend to be harder on rental cars than their own personal cars -- perhaps not on purpose, but subconsciously, as they are usually driving on unfamiliar roads and parking in unfamiliar areas. It's also an unfamiliar car, and they may not know instinctively how to handle it like they do their own car. Three, there's no deductible, so even minor scratches cost the rental company big bucks -- we have to return the cars in "like new" condition at the end of our lease, meaning a luggage-scuffed bumper can cost us hundreds of dollars (nevermind the missed or ignored minor damages on non-LDW cars that still have to be fixed) -- whereas a person may not even file a claim for a minor ding on his or her personal car. Last, the liability insurance profit is split between the rental company and the insurer, meaning the price has to be higher to justify both companies offering it.
Often the additional products can make or break a rental company's profitability. The rental industry is NOT a business I would go in. The average cost of a car rental has actually gone DOWN, given inflation and the increase in the cost of cars, over the last couple of decades. Think about it: if you rent a chainsaw or lawnmower, you rent it for 25 to 50 percent of its value for just a few hours. You rent a car for 0.2% of its value per day. A car used to be about the same price per day as an average hotel room. Hotel rooms have skyrocketed -- even Motel 6 has gone from $19.99 per night (single occupancy) to $54.99 per night or so. In my area, a summertime budget hotel room can easily go for $130 per night, twice the cost of a car per night (our rates go up quite a bit in the summer because of the peak tourist season). Perhaps if car rental prices were adjusted to match the price increase in hotel rooms, inflation, and lease prices, the cost of insurance wouldn't look so bad (which actually is the case for our location in the summer!).
Of course, you can lease a car through a dealer for a lot less than you can rent a car for an equivalent length of time through a rental agency. But that's because the entire overhead of the rental business is taken out, and you operate the vehicle entirely at your own risk and liability -- the dealer would never extend any protection to you for your driving, whereas a rental agency is still responsible and has to absorb whatever you cannot or will not pay in respect to damages or liability.
I know the owners of our franchise personally. They are NOT rich. They operate on a really, really slim profit margin. And we're not the smallest of the major companies in town, either.
I hope this helps you understand the other side of the story.
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Thanks for the insight. What you have said makes sense.
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Note that some card policies do claim to cover downtime and other fees. Check carefully because they often leave themselves an escape clause (such as making the rental agency prove they've lost revenue over the car's defleeted status), leaving you with the bill. I have yet to meet a card company that has absorbed all of those types of charges.
If you tried to bill me for downtime without proving that the car's non-availability cost you money I'd fight you over it also.
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Despite all the horror stories.....I have only had a good experience with the rental car coverage.
Someone backed into my rental vehicle. I took down their information and supplied it to the car rental company.
Upon arriving home I reported the incident to my insurance company. I also received a copy of a damages report, including down time, from the rental car company.
I called the credit card and they asked me to send them the damages report along with a copy of my insurance policy. I did so, and they sent me a form advising that they would pay $500, the amount of my deductible. They asked me to check one of two boxes:
*do you want us to send the check directly to you, OR
*do you want us to send the check to the rental car company.
I checked the first box, and within a week, I had a check for $500.
After about a month, I called my insurance, and asked for an update. They had none, and asked why I was calling them.
I decided to bother them no more, and have not heard from anyone since. The $500 was deposited into my account and is being held in trust should it ever be needed.
America is a great country.
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If you tried to bill me for downtime without proving that the car's non-availability cost you money I'd fight you over it also.
Heh...and in summer where I live, we'd win. We are absolutely sold out between June 15 and August 30. Then we get a boatload of returns on the 30th, and by September 1, we are swimming in an entire lot of unused cars. So, we sell and lease-return all of the cars, get a new shipment one sixth the size of our summer fleet, and use those through the winter.
Where I live, the tourist season is, well, very busy and very compressed. Most recent statistics said twenty times our city's population came through in those three months.
And our general manager is very forgiving of downtime. In the summer downtime's legitimate, but he's a nice guy and plays fair. Other places may not be as nice, and rental companies typically win at the game. Good luck fighting...
Jackal
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In that case you'd have documentation of actual financial impact. Visa says they would pay if provided with that documentation. We'd have no argument.
I know that agencies run short of certain classes of car from time to time, but it doesn't happen every day over a two week period at most places I'm likely to rent from.
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This FAQ fron the NY State Insurance Dept. may be of interest to New York residents http://www.ins.state.ny.us/autorent.htm
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Any updated information on this insurance subject?
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Visa Signature
Auto Rental Collision Damage Waiver (Secondary) Offers - at no additional charge - coverage for damage due to collision or theft up to the actual cash value of most rental cars. You must secure and charge the rental to your covered card, and decline the CDW/LDW offered by the rental agency. Coverage is provided to the cardholder and other authorized drivers permitted by the rental contract. Additional terms and conditions apply.
MasterRental Insurance Coverage Automatically provides, at no additional charge, coverage for collision and loss damage up to $50,000 when certain terms and conditions are met. Coverage is effective when you initiate and complete the entire rental transaction with your MasterCard and decline the car rental company's collision damage waiver. This insurance is "secondary" coverage within your domiciled country and "primary" coverage outside your domiciled country. This insurance will pay for the outstanding deductible portion or other charges not covered by your primary automobile insurance policy.
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Lot of confusion (and deliberate misinformation) on this board. Here is what I do. I have no car (hence no insurance) but rent almost 300 days a year from Hertz. For liability, I pay Gieco $50 a month (non-owner's insurance) for MAXIMUM coverage. If you have limited assets and need minimal protection, AAA provides it (see the end of this post for more details).
American Express credit card provides primary damage/theft. This valid for 30 days (not 14 days like someone mentioned) of continuous rental. Amex has also started offering loss of use coverage (again, not like someone mentioned).
Here are some additional nuggets. If you have AAA and rent from Hertz, not only do you get limited liability, 25/50/10 ($25,000 per person, $50,000 per accident and $10,000 property damage) but also a $5,000 cap on loss/damage to the vehicle (so if you total a $30,000 car, AAA limits it to $5,000 which American Express would cover).
$5,000 Limit on Liability to Vehicle
AAA members are only responsible for $5,000 for loss or damage to the Hertz vehicle rented in the U.S. even if the Loss Damage Waiver (LDW) is not purchased. Non-members may be responsible for the full value of the vehicle plus loss-of-use charges. (U.S. Only)
Primary Personal Liability Protection
AAA members receive Primary Personal Liability Protection of 25/50/10 ($25,000 per person, $50,000 per accident and $10,000 property damage) in most states. This is protection for claims filed by a third party, i.e., passenger, passenger in another vehicle, etc (U.S. Only)
No Charge for Additional Drivers
There is no charge for additional drivers who are also AAA members and meet standard rental qualifications. Additional drivers fees can be up to $12 per day for non-members or with other car rental companies. (U.S. & Canada Only)
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Lot of confusion (and deliberate misinformation) on this board. Here is what I do. I have no car (hence no insurance) but rent almost 300 days a year from Hertz.
Good on AmEx to offer loss of use. I quit using my AmEx for renting cars solely because they left me on the hook for $100 in LOU/administrative fees, even though I liked their primary coverage (although that costs an extra $25 when renting). I wonder if enough people took their business elsewhere that they reconsidered that policy. That's changed within the last year, then, because my incident happened about a year ago, and they were still not covering it then.
It looks like Hertz offers some nice benefits, at least when paired with AAA. But Hertz always seems to have highly inflated rates, anyway. I'm not sure how it works with specific discount programs like AAA (Hertz seems to partner with nearly every corporation in existence), but every time I've checked, it seems to me that it's just not economical, since you're taking 25% off of a rate that's 250% higher than everyone else. Most other companies don't offer such big discounts--because their base price is half of Hertz'. Correct me if I'm wrong...
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Thank you for responses. Any wisdom on coverage for car rentals outside of US or Canada?
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Thank you for responses. Any wisdom on coverage for car rentals outside of US or Canada?
Depends on if you're a resident of that country or not. In the cases I'm familiar with, Visa and Mastercard offer primary collision coverage outside of your country of residence. So, for example, I rented a car in Australia last year, and I was fully covered by my Visa because I live in the U.S.--no need to file any claims with my insurance company first.
When using an AmEx, be careful--there are six (I believe) countries that AmEx doesn't cover you in, due to unfavorable laws. I think that list includes Australia, New Zealand, Israel, Italy, and a couple of others--read your cardholder agreement carefully. I know Visa does cover you in those countries.
If buying coverage from the rental company overseas, be very careful to look at what is being offered before accepting it. Even other English-speaking countries use different terminology (i.e. a deductible is often called an "excess"), and (because of laws) liability coverage may already be included. Also, by law the deductible ("excess") may be limited to a certain amount (in Australia, it's A$2750, I believe, kind of like how AK01 said Hertz limits the damage responsibility to $5000 with a AAA membership). By purchasing the collision damage waiver, you reduce that excess--but not always to $0. So, you may be spending $20 per day on a product which still leaves you on the hook for $300 in damages to the car. Be careful, too, because the credit card companies want to ensure that you've declined the CDW before they will cover you. (Why, I don't know--seems like they'd encourage you to buy it, as it leaves the credit card company less responsible for the damages...)
So, it varies country to country--your best course of action would be to talk with someone who's familiar with the procedures and policies of the country you're visiting.
And if you're from outside the U.S. and need to rent here, most states do not require the rental company to provide liability insurance. You'll either need to purchase a policy (like AK01 did) to cover that or you'll need to buy it from the rental company--NO credit card covers third-party liability, and possession of third party liability is required by most states in order to drive. Your credit card may or may not cover collision/damage to the rental vehicle--read your cardholder agreement carefully. I've found that outside of the U.S., most cards DO NOT have a CDW benefit, so you may need to purchase the rental company's CDW as well (or, if you want, you can risk having to pay out of pocket for a totaled vehicle--that's perfectly legal but rather stupid, I think).
Hope this helps!
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I've found that outside of the U.S., most cards DO NOT have a CDW benefit, so you may need to purchase the rental company's CDW as well (or, if you want, you can risk having to pay out of pocket for a totaled vehicle--that's perfectly legal but rather stupid, I think).
Hope this helps!
I know you started this paragraph with "And if you're from outside the US.." but the above sentence is not clear. I think you mean,
"I've found that if your credit card is issued outside of the US..."
Most credit cards issued within the US have the CDW benefit outside the US (i.e. for renting outside the US).
Just wanted to clarify.
And most importantly, to everyone, READ your rental contract carefully before you sign and initial it. I have had at least two friends rent cars within the US (US citizens/residents) who told the rental clerk that they wanted to decline various optional coverages like CDW, supplemental liability, etc. But they initialled that they accepted them and were surprised at the end of the rental with the total charge. It does not matter what the rental clerk says he heard you saying but what you sign/initial on the rental contract. In both cases it was not a case of misunderstanding but rather of intentionally including these options when he/she knew the customer did not want them.
To be fair, most rental clerks are honest. But there are enough that are not that you need to double check everything on the front page of the rental contract.
John
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I know you started this paragraph with "And if you're from outside the US.." but the above sentence is not clear. I think you mean,
"I've found that if your credit card is issued outside of the US..."
Most credit cards issued within the US have the CDW benefit outside the US (i.e. for renting outside the US).
Thanks for clarifying. That is exactly what I meant. (I typed that response very quickly this morning before heading off to work, so I didn't proofread it or think very carefully. By the way, I'm no longer a rental CSR--I've accepted a job offer with the Alaska Railroad. SD70MAC engines don't give you grief like tired, grumpy business travelers or old, grouchy tourists. I think every American should work customer service for a year--it would give them an appreciation for dealing with nasty people and would perhaps help with the selfish and I'm-not-responsible-for-anything attitude that so plagues our society...)
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By the way, I'm no longer a rental CSR--I've accepted a job offer with the Alaska Railroad. SD70MAC engines don't give you grief like tired, grumpy business travelers or old, grouchy tourists.
Sounds like a fun job. I am heading to Alaska this summer - one of my favorite places.
I think every American should work customer service for a year--it would give them an appreciation for dealing with nasty people and would perhaps help with the selfish and I'm-not-responsible-for-anything attitude that so plagues our society...)
You are so correct. I know one person who said he made every one of his kids be a waiter/waitress when they were growing up. Having to deal with grumpy, selfish, nasty people you mentioned! It makes you see things from a different perspective.
John
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I always decline the insurance through Avis
MY credit card has insurance coverage and my personal insurance also covers any rentals I drive something I made sure I had