|
 To keep costs low, he had rejected the "collision damage waiver" (CDW)
insurance offered by the rental car company, which can run as much
as $45 a day and can include a deductible.
Nitzsche, who works for ClearPoint Credit Counseling Solutions, says
it was big relief to learn the damage was covered by his credit
card.
"That was a pretty big chunk of change," he said.
It took three months or so for the payment to be made from Visa to
Hertz, mostly because of requests for more information or the filing
of paperwork. In the end, though, the accident cost him nothing out
of pocket.
While consumers typically have coverage from their credit cards for
accidents, they often do not benefit from the full coverage Nitzsche
got. Many people have auto insurance on their regular cars, which
acts as the primary insurer in the case of loss or damage. The
credit card insurance provided full coverage for Nitzsche because,
at the time, he did not own a car.
KNOW YOUR COVERAGE
Not every card affords the same coverage. Most Visa cards will cover
theft, damage to the rental car, towing and loss-of-use charges if
you do not have a personal auto insurance policy.
However, both Visa and Mastercard exclude injury, property damage
and damage to other vehicles, according to website nerdwallet.com.
If you have your own insurance, Visa will reimburse your deductible
as well as some other charges your insurer does not cover.
Mastercard's insurance coverage varies by the issuing bank. A USAA
World MasterCard, for example, provides largely the same benefits as
Visa, but caps loss of use reimbursement at $500.
A few credit cards automatically offer primary coverage, meaning you
are covered even if you have your own car insurance. They include
Discover Escape, Chase Sapphire Preferred and United Mileage Plus
Explorer.
That could be helpful if you do not want to risk a premium increase
on your own car insurance. A study early this year by
InsuranceQuotes.com found that a single claim of $2,000 on average
boosts rates by 41 percent.
American Express card holders are afforded the opportunity to a pay
a one-time fee per rental of $16 to $25 to change their coverage
from secondary to primary. You can enroll online or by calling the
company.
Most credit card companies require you to refuse the collision
damage waiver insurance offered at the car rental counter or it
negates the card's coverage, says Robert Harrow, research analyst
for credit card and insurance analysis site ValuePenguin.com.
That can sometimes be difficult with an insistent clerk. Eva Glasrud,
who runs a travel blog (http://TheHappyTalent.com), says she
repeatedly tried to reject rental car insurance on a trip to Mexico
last November. Eventually, the San Francisco resident gave in and
took the $20-a-day additional insurance.
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"I thought maybe we could get part of it back if I complained when
we got home," she says. "But we never heard anything back.
EXCLUSIONS
The fine print can be lengthy. Among the limitations:
* Typically, only physical damage to the rental vehicle due to a
collision or theft is covered, but injuries to you or others are
not, Harrow says. Those would be covered by your auto insurance
policy; if you do not have one, you should take the rental company's
additional personal injury coverage. You can also buy a non-owner
liability policy from many auto insurance companies.
* Loss of personal items is typically excluded.
* When traveling overseas, credit cards will not cover you in
certain countries, including Australia, Ireland, Israel, Italy,
Jamaica, and New Zealand, Harrow says.
* While it might seem obvious, the card you use to pay has to be
used for the entire rental and the bill needs to be in the name of
the cardholder, notes Rachel Drake, insurance expert for the
insurance shopping site Obrella.com.
COLLECTING CLAIMS
Collecting payment from a card company can take a while, as Nitzsche
found out. Some pay directly to the rental car company while others
will reimburse cardholders.
New York media executive Andrea Garcia is still dealing with several
hundred dollars in damage to her rental car when it was broken into
during a vacation to Miami in May. She says it took some work to
file a detailed claim form, provide photographs and jump through
other bureaucratic hoops.
Unlike Nitzsche, she had to lay out cash and is still waiting to be
reimbursed.
(Editing by Beth Pinsker and Dan Grebler)
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