Tuesday, December 9, 2008

Rental Car Insurance Through Visa

I know this post has nothing to do with anything faux, LA, or hipster, but I thought the info was important enough to share.

Did you know that most Visa cardholders have rental car auto collision coverage at no additional cost to you? Which means that if you get in an accident with your rental car and you used Visa to pay for it, Visa will pay for the damages!!!

I've found out this lesson the hard way. But basically, you should never accept a rental car company's offers of collision damage protection (usually at around $10/day) because your credit card can provide it to you for FREE! Some of the basic terms and conditions I've learned are:

  1. The cardholder must be the primary renter or an authorized driver
  2. The rental must be paid for through Visa
  3. Collision damage coverage offered through the rental car company must be declined
  4. The rental term must be 15days or less
  5. If you already have personal auto insurance, this coverage is supplemental and will cover only your deductible. If you don't have personal auto insurance, Visa will pay for the entire cost of damages up to the legal value of the vehicle
  6. The incident must be reported within 45days of occurrence
There are several others that I can't remember off the top of my head right now. But what an amazing benefit, that costs you the renter NOTHING! And it will not negatively impact your credit or cause an increase to your APR or anything like that.

I used Visa as the example since that's the card I used, but I think other companies like MasterCard and AmEx offer similar services. You should check to make sure. These types of services are offered directly through Visa and not through the bank issuing the card. At Visa, this group is called "Enhanced Services."

In this case, it really sounds like there is such a thing as a free lunch....

Website: http://usa.visa.com/personal/cards/benefits/bft_dmg_waiver_personal.html


Carleen said...

Mastercard has this as well - at least mine does...but I don't think ALL Mastercards do....I could be wrong, though.

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Car Rental Guy said...

Sorry but when I read inaccurate or misleading Blogs about insurance and car rental, I can not help myself.

Visa does not have any coverage for Liability and by saying so you are misleading a lot of people.

Liability coverage is for damage done to a third party. If someone sees this title they may think it will pay for some one they run into. It will not. You are talking about Collision Damage to the rental car.

You further discuss the coverage for the damage, but you do not talk about the Loss of Use or Diminished Value.

In most states, car rental companies have the right to collect for the income lost while the car or truck is being repaired. This is called Loss of Use and the clock ticks on that until the car or truck is repaired and back in service.

There is also the issue of diminished value. A car that has been in an accident is worth less at the time of sale than one that is not. A renter is also responsible for the diminished value.

Visa cards will not pay loss of use nor diminished value. The renter is responsible for that. The combination of the two in many cases can be much more than the price to repair the damage.

If you want to give someone correct advice have them call their credit card company and insurance company before they rent and ask who will pay for the damage to the rental car, Loss of Use and diminished value.

Then continue to ask who will pay for the damage done to the third party in the event they run into someone or something.

After they have the facts then discuss what is available from the rental car company and determine what is best for their situation.

fauxLAhipster said...

hey people, thanks for all your comments!

first off, i'd like to say i am definitely NOT a car rental or insurance expert, so i may not be using all the terminology correctly.

Car rental guy - you are correct, Visa won't pay for damages to the other car if you hit someone, only yours. And diminished value and loss of use was something mentioned to me during my call with the Visa lady that escaped my mind as i wrote this blog post.

my recommendation is to read the Ts&Cs in the posted link (for visa cardholders) and to call your respective cc companies for all others.

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