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2014 Credit Card Auto Rental Insurance Report

CardHub 2014 Credit Card Auto Rental Insurance Study

When most people think of credit card perks, their minds turn to rewards, low interest rates and the like. However, credit cards naturally provide a number of far-reaching standard benefits that help protect cardholders from both monetary loss and unnecessary hassle. One of these benefits is car rental collision protection, 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. Sitting atop the list of reasons for such purchases is confusion as to whether personal auto insurance extends to rental cars. Indeed, 62% of consumers do not 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 policy and explains what type of rental car insurance 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.

Key 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 received the highest cumulative score (90%) for its rental car insurance policy, while Discover ranked second (88%), MasterCard ranked third (79%) and Visa ranked last (74%).
  • All four major networks require cardholders to charge their entire rental car purchase on their credit card and decline supplemental insurance/Collision Damage Waivers (CDW) offered by the rental company in order to be eligible.
  • 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 is the only network that does not cover accidents occurring on dirt and gravel roads. MasterCard only covers accidents on dirt and gravel roads if they are “regularly maintained.”
  • All card networks exclude rentals that exceed specified time limits, and a lot of cards come with country limitations as well.
  • American Express is the only network not to 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.

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Side-by-Side Comparison

 

Visa Discover MasterCard American Express
Card Ubiquity All cards All cards Only World cards All cards
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 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
AND some popular SUVs
Clarity on exclusions Antique, exotic or luxury vehicles, vans, trucks, pick-ups, motorcycles, recreational or off-road vehicles Policy provides description for antique automobiles. Automobiles with a price that exceeds $50,000 USD will not be covered Policy provides description for antique automobiles. Automobiles with a price that exceeds $50,000 USD will not be covered Policy provides description for antique automobiles. 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 outside country of residence Up to 31 days Up to 15 days for World cards and up to 31 days for World Elite cards Up to 30 days
Type of Road Exclusions Accidents occurring on dirt and gravel roads are NOT covered Accidents occurring on dirt and gravel roads are covered Accidents occurring on dirt and gravel roads frequently maintained by municipality are covered Accidents occurring on dirt and gravel roads are covered
Country Exclusions Theft or damage from rental transactions which originated in Israel, Jamaica, the Republic of Ireland, or Northern Ireland ARE NOT covered Theft or damage from rental transactions which originated in Australia, Ireland, Israel, Italy, Jamaica, and New Zealand ARE NOT covered for the Escape card. No country exclusions for the rest of the cards Theft or damage from rental transactions which originated in Israel, Jamaica, the Republic of Ireland, or Northern Ireland are not covered for Standard, Gold and Platinum cards. The World cards do not feature any country exclusions Theft or damage from rental transactions which originated in Australia, Ireland, Israel, Italy, Jamaica, and New Zealand ARE NOT covered
Loss of use and deductible on your auto insurance Loss of use and deductible covered Loss of use NOT covered Loss of use and deductible covered Loss of use and deductible covered
Towing Towing covered Towing covered Towing covered Towing covered
Damage to tires and rims Damage NOT covered Damage covered Damage covered Damage covered
How to File a Claim 1-800-847-2911
File Online
1-800-347-2683 1-800-622-7747 1-800-338-1670
File Online
Full Policy Details Visa Rental Collision Policy Consumers need to log in to their accounts Consumers need to log in to their accounts American Express Rental Collision Policy

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Score Breakdown

 

Point Allocation Category Visa Discover MasterCard American Express
15% Card Ubiquity 15% 15% 8% 15%
15% Vehicles Excluded 11% 11% 11% 8%
5% Clarity on exclusions 2% 5% 5% 5%
10% Coverage Duration 6% 10% 8% 10%
5% Type of Road Exclusions 0% 5% 3% 5%
5% Country Exclusions 3% 4% 4% 2%
15% Loss of use and deductible on your auto insurance 15% 9% 15% 15%
5% Towing 5% 5% 5% 5%
5% Damage to tires and rims 0% 5% 5% 5%
5% Activation 5% 5% 5% 5%
5% Claims Process 5% 5% 3% 5%
10% Info Accessibility 7% 9% 8% 10%
100% Total 74% 88% 79% 90%

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Score Justification

 
Visa received an overall score of 74% 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 6% because the length of coverage is limited to 15 days.
  • Under “Type of Road Exclusions,” we did not award any points because accidents occurring on dirt or gravel roads are not covered under the benefit.
  • For “Country Exclusions,” a 2% penalty was applied because four countries are excluded from coverage.
  • In the “Damage to Tires and Rims” category, no points were awarded as the benefit does not apply to this type of damage.
  • Under “Info Accessibility,” Visa scored 7% because their policy disclosure is in small print and they refused to participate when contacted for clarifications.

Discover received an overall score of 88% 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 “Loss of Use and Deductible on Your Auto Insurance” category, the network received 9% because its policy does not cover loss of use for rental cars.
  • Under “Info Accessibility,” Discover scored 9% because consumers need to log in to access the disclosure.

MasterCard received an overall score of 79% because:

  • Under “Card Ubiquity,” we have subtracted 7% 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 of19-10 days.
  • Under “Type of Road 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 4% score was applied – the average for both of the network’s policies; 5% points for no country exclusions and 3% points for four countries excluded from coverage.
  • Under “Claims Process,” we awarded only 3% because this process requires more documents in order for a claim to be validated.
  • MasterCard received an “Info Accessibility” score of 8% because the disclosure is in small print and consumers need to log in to access it./li>

American Express received an overall score of 90% because:

  • Under the “Vehicles Excluded” category, we subtracted 7% 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.

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Tips

  • 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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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. American Express, Discover and MasterCard responded to our questions and confirmed the accuracy of our data. Visa declined to clarify issues regarding its policies despite multiple attempts to contact the company.

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% points
  • If just some cards are eligible for the benefit – 7.5% points
  • 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% points
  • If regular exclusions apply (i.e. exotic, expensive, or antique cars, trucks, vehicles with open beds, or off-road vehicles) – 11.25% points
  • If SUVs are not covered – 7.5% points
  • 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% points
  • If a partial definitions of excluded cars is provided (i.e. just value or just characteristics) – 2% points
  • 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% points
  • If the coverage duration is between 20 – 29 days – 8% points
  • If the coverage duration is between 19 – 10 days – 6% points
  • If the coverage duration is between 10 – 5 days – 2% points
  • If the coverage duration is under 5 days – No points

B. Type of Road Exclusions – Worth 5%

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

C. Country Exclusions – Worth 5%

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

4) What is the quality of the coverage? – Worth 25% total
A. Loss of use and deductible on your auto insurance – Worth 15%

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

B. Towing – Worth 5%

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

C. Damage to tires and rims – Worth 5%

  • If damage to tires and rims is covered – 5% points
  • 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% points
  • 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% points
  • If claims require up to 2 documents on top of the standard documentation – 3% points
  • 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% points
  • 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% points
  • 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% point
  • Information is in small size font – No points

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

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

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

  • Transparent about policies – 2% points
  • 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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