How to navigate car-rental insurance

If you're planning to rent a car as part of a fall trip, you need to make sure to avoid a few price gouges that the rental companies have in store for you if you aren't careful. As usual, the most vexing questions deal with insurance.

The easiest and by far most expensive way to avoid insurance hassles is to buy the rental company's "collision/loss damage waiver," or CDW. These days, that coverage is likely to set you back at least $20 a day, maybe more often as much as the base rental rate. You can easily avoid this charge by renting with a credit card that includes collision coverage at no extra cost. All Visa and Diners Club cards offer this feature, as well as almost all American Express and Discover cards and some MasterCards. But you have to be careful:

You must make sure that your card does, in fact, include this feature. Never assume you're covered; ask, if you aren't already sure.

Even if they carry a MasterCard or Visa logo, debit cards typically do not include CDW coverage. Don't use a debit card.

Credit card coverage is limited to maximum rental periods for each individual rental contract: 30/31 days for Amex, some elite MasterCards, Discover, and Visa on rentals outside your home country; the limit is 15 days on most MasterCards and on domestic Visa rentals, and it's 45 days for Diners Club. If you plan a longer rental, you can return and re-rent, but only after allowing a gap of several days (check with your card for specifics).

Most credit card coverage is secondary, meaning it pays off only what you can't first recover from your regular automobile insurance. Only Diners Club offers blanket primary coverage the card pays the entire amount but you can buy extra-cost primary coverage from Amex for an additional $25 per rental. I strongly recommend going for primary if you can.

If you're buying a travel insurance bundled policy, some companies offer primary CDW coverage at a much lower rate than the rental companies charge.

Credit card CDW works only if you (1) charge the entire rental to the card and (2) make sure you decline the rental company's CDW. That can be harder than it sounds: Some companies issue contracts with the insurance box pre-marked as "accept" and you have to enter your decline specifically. Also and I'm indebted to Bob Bestor, publisher of the excellent "Gemutlichkeit" online travel newsletter for this one make sure you don't inadvertently pay cash for some minor extra such as a ski rack, GPS system, or license sticker: That extra payment voids the entire rental requirement.

Renting outside the U.S. entails some additional traps:

Amex, most MasterCard, Diners Club, and Visa cards all exclude some countries from CDW coverage: Ireland, Israel, and Jamaica on all cards (except some high-premium MasterCards), and some combination of Australia, Italy, and New Zealand on other cards; Discover doesn't work at all in most overseas countries. If you plan to rent in one of those countries, make sure that either your card works or that you rent in a different country and drive across the border.

Many supposedly "inclusive" overseas rentals claim to include CDW, but they typically carry a very large deductible. Rental companies offer zero- or minimal-deductible "super CDW" at extra cost, but if you're relying on your credit card, buying that extra may void the entire rental requirement. The last time I checked, some cards take the position that if you can't avoid paying some CDW, they will honor the coverage as long as you don't accept any optional coverage, but other cards don't. Check your card(s) carefully.

One final suggestion. These days, when just about every wireless phone has a camera, take pictures of your rental car before you drive it off the lot. That way you can prove that you didn't cause any damage to the car after you rented it.

 

Most insurance policies up here in Canada, will cover you for a rental car aswell. If you have collision on your policy you most likely have rental coverage threw your exisiting insurance policy. All ways double check with your broker or agent. In Canada that coverage will cover you any where in Canada and the US.

 

Good call Michael, thanks for the tips.