Say you're renting a car and you plan to rely on your credit card's built-in collision coverage. Or maybe you're even prepared to buy the rental company's wildly overpriced collision damage waiver (CDW). Either way, you think you're covered. But are you fully covered? MileCards.com just released a report on eight rental car "gotchas" that at least some credit card collision benefits won't cover.
"Upgrade" to SUV. "We're out of that midsize car you reserved, but we'll give you a Ford Expedition at no extra charge." You might hear that from a rental agent. Or maybe you just picked out an SUV from one of those "pick any available car" lots. You might even have wanted an SUV. Although most credit cards cover smaller SUVs, some credit-card collision coverage specifically excludes full-size SUV models.
"Expensive" cars. As is the case with SUVs, if you think driving a rented Corvette, Lexus, or BMW might be cool for a few days, better pay the CDW. Many credit cards do not cover collision damage to cars with a retail value of $50,000 or more. And, these days, lots of cars cost more than $50,000.
Vans and Pickups. You probably already know that almost no credit card coverage applies to trucks or large vans: If you're renting a U-Haul or some other hauling vehicle, you have to buy the CDW, regardless of the credit card you use. The main exception is American Express extra-cost "Premium coverage" that includes some trucks.
Flat tires. A blowout or flat tire may not come under the definition of "damage" to a rented car, unless the tire problem is caused by a wreck, in which case neither CDW nor credit card coverage is guaranteed to cover the associated expenses.
Unlocked car. Normally, neither a rental company's theft insurance nor a credit card will cover you if a police report or any other source notes that the car was unlocked at the time of the theft. And a related problem is that you may not be covered for theft if your car is stolen but you don't have possession of the key.
Stuck vehicle. The MileCards report cites an instance of a driver whose rented car was caught in a flash flood and isolated for several days. The driver got out by rescue helicopter, but the rental company demanded payment for the entire time until the car was returned. You can also be charged for extra days if your rented car is towed, for whatever reason.
Damage to others. Neither a credit card nor a rental company's CDW covers you for any harm you might do to any other person or damage you might do to someone else's property. That sort of claim is handled under personal liability, not collision. In this country, some states require that rental companies include a minimum level of liability as part of the rental rate, but it's almost always very small compared to the financial risk, and some states require no coverage at all.
Prepaid CDW. In some rentals -- especially outside the United States -- partial collision coverage may be included in the base rate, but with a very high deductible. Credit card coverage almost always requires that you decline the rental company's CDW, but card issuers' policies on bundled CDW differ.
In sum, collision coverage is a minefield. The rental companies know of the loopholes in credit card coverage -- and they may invent a few when they're selling you on CDW. You can avoid most problems by buying CDW, but the prices, up to $30 a day, are wildly inflated. I continue to recommend relying on a credit card, but you have to know your card's fine print before making a decision.
Send email to Ed Perkins at
eperkins@mind.net
Travel on 08/31/2014