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Rental Car Insurance: 2015’s Best Credit Card Coverage

Auto Rental InsuranceWhen most people think of credit card perks, their minds turn to rewards, low interest rates and convenience. However, credit cards provide a number of additional standard benefits that help protect cardholders from both monetary loss and unnecessary hassle. One of these benefits is car rental insurance, which is primarily driven by the card network and not the card issuer.

To provide context, roughly 20% of consumers always purchase supplemental insurance coverage when renting a car, according to a study from Progressive Insurance, and another 20% do so on occasion. The primary motivation for such purchases is confusion as to whether one’s personal auto insurance extends to rental cars. Indeed, 62% of consumers don’t believe their personal auto insurance automatically covers rental cars, according to a survey conducted by the National Association of Insurance Commissioners. Similarly, 24% aren’t sure whether their credit cards provide any sort of coverage either.

In this report, CardHub provides an in-depth examination of each major card network’s rental car insurance policies, explaining what type of coverage consumers automatically receive through their credit cards, how they can take advantage of it, which credit cards offer the best insurance coverage and whether any other forms of supplemental insurance are needed.

Main Findings

    • All four major card networks provide some form of rental car insurance coverage. MasterCard is the only network that does not provide coverage on all of its cards.
    • American Express and Visa have the best rental car insurance policy, followed closely by Discover
  • All four major networks require cardholders to charge their entire rental car purchase on their credit card and decline supplemental insurance/Collision Damage Waivers offered by their rental company in order to be eligible for coverage.
  • American Express is the only network that does not provide coverage for renting certain popular SUVs – including the Suburban and Tahoe from Chevrolet, GMC Yukon, Ford Expedition, Lincoln Navigator, Toyota Land Cruiser, Lexus LX450, Range Rover, and full-sized Ford Bronco.
  • None of the four major networks provides coverage for the rental of: 1) exotic, expensive, or antique cars; 2) trucks; 3) vehicles with open beds; or 4) off-road vehicles.
  • VISA and MasterCard only cover accidents on dirt and gravel roads if they are “regularly maintained.”
  • All card networks exclude coverage for rentals longer than 31 days and many international rentals.
  • All networks also provide roadside assistance to their cardholders for a pre-negotiated fee.

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Side-by-Side Comparison

Visa Discover MC AmEx
Covered Cards All cards All cards Only World cards All cards
Type Of Coverage Reimburses a cardholder for costs stemming from damage to or theft of a rental car
Vehicles Excluded Antique, exotic or luxury vehicles, vans, trucks, pick-ups, motorcycles, recreational or off-road vehicles Antique, exotic or luxury vehicles, vans, trucks, pick-ups, motorcycles, recreational or off-road vehicles. Automobiles with a price that exceeds $50,000 USD will not be covered Antique, exotic or luxury vehicles, vans, trucks, pick-ups, motorcycles, recreational or off-road vehicles. Automobiles with a price that exceeds $50,000 USD will not be covered Antique, exotic or luxury vehicles, vans, trucks, pick-ups, motorcycles, recreational or off-road vehicles and some popular SUVs. Automobiles with a price that exceeds $50,000 USD will not be covered
Coverage Duration Up to 15 days for rentals in your country of residence and up to 31 days otherwise Up to 31 days Up to 15 days for World cards and up to 31 days for World Elite cards Up to 30 days
Road Type Exclusions Accidents occurring on dirt and gravel roads are covered, if the roads are regularly maintained by a municipality Accidents occurring on dirt and gravel roads are covered Accidents occurring on dirt and gravel roads are covered, if the roads are regularly maintained by a municipality Accidents occurring on dirt and gravel roads are covered
Country Exclusions Rental transactions originating in Israel, Jamaica, the Republic of Ireland and Northern Ireland are not covered No country exclusions for Discover cards, except for Escape.

Escape cardholders are not covered for rental transactions originating in Israel, Jamaica, the Republic of Ireland and Northern Ireland
Rental transactions originating in Australia, Ireland, Israel, Italy, Jamaica, and New Zealand are not covered Rental transactions originating in Australia, Ireland, Israel, Italy, Jamaica, and New Zealand are not covered
Rental Company’s Loss Of Use & Your Auto Insurance Deductible Loss of use and deductible covered Loss of use not covered Loss of use and deductible covered Loss of use and deductible covered
Towing Expenses Covered Covered Covered Covered
Damage To Tires And Rims Covered Only if it results from theft, vandalism or vehicle collision Only if it results from theft, vandalism or vehicle collision Only if it results from theft, vandalism or vehicle collision
Claims Process A copy of the accident report / police report, a signed claim form, a rental agreement, an itemized bill and a receipt or statement showing to which card the rental was charged to A copy of the accident report / police report, a signed claim form, a rental agreement, an itemized bill and a receipt or statement showing to which card the rental was charged to and a photo of your driver’s licence Same as Visa and Discover
How To File A Claim 1-800-847-2911
File Online
1-800-347-2683 1-800-622-7747 1-800-847-2911
File Online
Full Policy Details Visa Rental Collision Policy Requires cardholder to log in American Express Rental Collision Policy

*We have listed the basic coverage offered by Visa, however some cards do not have the above listed country exclusions.

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Tips For Minimizing Cost & Liability When Renting A Car

Based on our findings in regard to card network rental car insurance policies as well as our knowledge of the insurance landscape and our overall money-saving expertise, CardHub’s editors recommend taking the following steps in order to minimize both the cost and liability associated with renting a car. Be safe out there!

  • Call your insurance company and find out if rentals are covered under your standard policy. Older policies may not offer this coverage.
  • Call your credit card issuer and ask what limitations apply to the car rental coverage provided by your particular type of credit card.
  • It might be wise to accept the liability insurance and collision damage waiver offered by the car rental company if you do not have personal auto insurance and your credit card does not provide sufficient coverage.
  • Long-term rentals might not be covered by your existing auto insurance, as time limitations may be imposed by your policy.
  • Your personal auto policy – if it even covers rentals – only applies when the vehicle is used for personal use, so if you’re traveling for business check what other options are available for you.
  • Rent a car of similar value to your own car in order to increase the likelihood that your existing coverage is also adequate for the rental car.
  • Sometimes, when your existing policy does not offer coverage for a particular type of rental car, you can ask about the possibility of adding an insurance rider for a small fee.
  • If you are not a car owner but drive from time to time, you might want to consider purchasing a non-owner auto insurance policy.

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Score Breakdown & Justification

 

Point Allocation Category Visa Discover MasterCard American Express
15% Cards Covered 15.00% 15.00% 7.50% 15.00%
15% Vehicles Excluded 11.00% 11.00% 11.00% 7.50%
5% Clarity on exclusions 2.00% 5.00% 5.00% 5.00%
10% Coverage Duration 8.00% 10.00% 8.00% 10.00%
5% Road Type Exclusions 3.00% 5.00% 3.00% 5.00%
5% Country Exclusions 3.00% 4.00% 3.50% 2.00%
15% Rental Company’s Loss Of Use & Your Auto Insurance Deductible 15.00% 9.00% 15.00% 15.00%
5% Towing Expenses 5.00% 5.00% 5.00% 5.00%
5% Damage To Tires And Rims 5.00% 2.50% 2.50% 2.50%
5% Activation 5.00% 5.00% 5.00% 5.00%
5% Claims Process 5.00% 5.00% 3.00% 5.00%
10% Info Accessibility 10.00% 8.50% 8.50% 10.00%
100% Total 87.00% 85.00% 77.00% 87.00%

 

Visa received an overall score of 87% because:

  • In the “Vehicles Excluded” category, we subtracted 4% because there are some exclusions attached to the benefit, even though they are standard across all credit networks.
  • Under “Clarity on Exclusions” we subtracted 3% because the maximum value of cars that are eligible for the benefit is not disclosed.
  • In the “Coverage Duration” category, the network received a score of 8% — the average obtained from scoring the network’s two policies; 10% for coverage over 31 days and 6% for coverage of 15 days.
  • Under “Road Type Exclusions,” we awarded a score of only 3% because accidents occurring on dirt or gravel roads are only covered if the road is frequently maintained by the municipality.
  • For “Country Exclusions” a 2% penalty was applied because four countries are excluded from coverage.

Discover received an overall score of 85% because:

  • In the “Vehicles Excluded” category, we subtracted 4% because there are some exclusions attached to the benefit, even though they are standard across all credit networks.
  • For “Country Exclusions” a 1% penalty was assessed because the Escape cards exclude six countries from coverage.
  • In the “Rental Company’s Loss Of Use & Your Auto Insurance Deductible” category, the network received 9% because its policy does not cover loss of use for rental cars.
  • In the “Damage to Tires and Rims” category, a score of 2.5% as awarded as the benefit only covers damage as a result of theft, vandalism or vehicle collision.
  • Under “Info Accessibility” Discover scored 8.50% because consumers need to log in to access the disclosure.

MasterCard received an overall score of 77% because:

  • Under “Card Ubiquity” we have subtracted 7.50% because the network does not provide information about the type of coverage provided for all of their cards.
  • Under the “Vehicles Excluded” category, we subtracted 4% because there are some exclusions attached to the benefit, even though they are standard across all credit networks.
  • In the “Coverage Duration” category, we awarded 8% points — the average obtained from scoring the network’s two policies; 10% for coverage over 31 days and 6% for coverage of 15 days.
  • Under “Road Type Exclusions” we awarded only 3% points because accidents occurring on dirt or gravel roads are only covered if the road is frequently maintained by the municipality.
  • For “Country Exclusions” a 3.50% score was applied – the average for both of the network’s policies; 5% points for no country exclusions and 2% points for six countries excluded from coverage.
  • Under “Damage to Tires and Rims” category, the network received a score of 2.5% as the benefit only covers damage as a result of theft, vandalism or vehicle collision.
  • Under “Claims Process” we awarded only 3% because this process requires more documents in order for a claim to be validated compared to the amount requested by the other networks.
  • MasterCard received an “Info Accessibility” score of 8.50% because consumers need to log in to access it.

American Express received an overall score of 87% because:

  • Under the “Vehicles Excluded” category, we subtracted 7.50% because there are some exclusions attached to the benefit, even though they are standard across all credit networks, and given that the benefit does not cover some popular SUV’s.
  • For “Country Exclusions” a 3% penalty was applied because six countries are excluded from coverage.
  • For “Damage to Tires and Rims” category, the network received a score of 2.5% as the benefit only covers damage as a result of theft, vandalism or vehicle collision.

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Methodology

CardHub reviewed the publicly available online car rental policies of the four major card networks and collected key information in order to answer the following questions: 1) Who is eligible for car rental insurance coverage?; 2) What vehicles are excluded?; 3) What exclusions do the policies have?; 4) What is the quality of the coverage?; 5) How does one activate the benefit?; 6) How should claims be filed?; and 7) How easy it is to obtain complete information about the policy?

Where the policies were not clear, we contacted the networks directly and requested clarification. All networks responded to our questions and confirmed the accuracy of our data.

In the case of card networks that offer more than one type of rental car insurance to participating issuers, we scored each of the packages individually and then averaged them to obtain an overall score. Each card network policy was scored using the following criteria.

1) Who is eligible for car rental insurance coverage? – Worth 15% total

  • If all cards are eligible for the benefit – 15%
  • If just some cards are eligible for the benefit – 7.5%
  • If no cards are eligible for the benefit – No points

2) What vehicles are excluded? – Worth 20% total
A. Vehicles Excluded – Worth 15%

  • If no exclusions apply – 15%
  • If regular exclusions apply (i.e. exotic, expensive, or antique cars, trucks, vehicles with open beds, or off-road vehicles) – 11%
  • If SUVs are not covered – 7.5%
  • If there is a large number of exclusions – No points

B. Clarity on exclusions – Worth 5%

  • If a full definition of excluded cars is provided (i.e. value and characteristics) – 5%
  • If a partial definitions of excluded cars is provided (i.e. just value or just characteristics) – 2.5%
  • If no description of excluded cars is provided – No points

3) What exclusions do the policies have? – Worth 20% total
A. Coverage Duration – Worth 10%

  • If the coverage duration is for 30 days and above – 10%
  • If the coverage duration is between 20 – 29 days – 8%
  • If the coverage duration is between 19 – 10 days – 6%
  • If the coverage duration is between 10 – 5 days – 2%
  • If the coverage duration is under 5 days – No points

B. Road Type Exclusions – Worth 5%

  • If Dirt and gravel roads are covered – 5%
  • If Dirt and gravel roads are partially covered – 3%
  • If Dirt and Gravel roads are not covered – No points

C. Country Exclusions – Worth 5%

  • No country excluded – 5%
  • Up to 2 countries excluded – 4%
  • Up to 4 countries excluded – 3%
  • Up to 6 countries excluded – 2%
  • Up to 8 countries excluded – 1%
  • Over 8 countries excluded – No points

4) What is the quality of the coverage? – Worth 25% total
A. Rental Company’s Loss Of Use & Your Auto Insurance Deductible – Worth 15%

  • If loss of use is covered – 15%
  • If the deductible portion on your auto insurance policy is covered – 9%
  • If the deductible from your auto insurance and loss of use not covered – No points

B. Towing Expenses – Worth 5%

  • If towing is covered – 5%
  • If towing is not covered – No points

C. Damage to tires and rims – Worth 5%

  • If damage to tires and rims is always covered – 5%
  • If damage to tires and rims is covered only when the result of theft, vandalism or vehicle collision – 5%
  • If damage to tires and rims is not covered – No points

5) How does one activate the benefit? – Worth 5%

  • If activation is standard (cardholders charge the entire rental car purchase on their credit card and decline supplemental insurance/Collision Damage Waivers (CDW) offered by the rental company) – 5%
  • If activation is more complex than the standard – No points

6) How should claims be filed? – Worth 5%

  • If filing a claim requires standard documentation ( i.e. a copy of the accident, a signed claim form, a rental agreement, an itemized bill and a receipt or statement showing to which card the rental was charged to) – 5%
  • If claims require up to 2 documents on top of the standard documentation – 3%
  • If claims require 3 or more documents on top of on top of the additional documentation – No points

7) How easy it is to obtain complete information about the policy? – Worth 10%
A. How easily can one find the info? – Worth 3%

  • Information is prominent on credit card network website – 3%
  • Information is not prominent on credit card network website; or it is prominent but users need to log in to see the full disclosure – 1.5%
  • Information cannot be easily found on website – No points

B. How easy it is to read the info? – Worth 1%

  • Information is presented in normal size font – 1%
  • Information is in small size font – No points

C. How complete are the policies provided? – Worth 4%

  • Full policy provided – 4%
  • Part of policy provided – 2%
  • Benefits briefly described – 0.5%
  • No key details provided – No points

D. How open and transparent are card networks about the policies? – Worth 2%

  • Transparent about policies – 2%
  • Not transparent about policies – No points

The network with the most accumulated points received the highest score. The maximum number of points is 100%.

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