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Monday, August 6, 2012

Comparing Credit Cards\' Auto Rental Insurance


Many credit card companies offer accident insurance when the cards are used to pay for a rental car. But details of coverage vary depending on the network behind the card, a report from CardHub.com finds.

Many people end up buying extra insurance when they rent a car because they are confused about whether their own auto policies cover them while driving rentals, as well as what sort of protection their credit cards may provide, the report says.

According to the Insurance Information Institute, an industry group, most automobile insurance policies cover a policyholder driving a rental. Details vary, though, and there are sometimes exclusions; some policies don't cover a driver, for instance, who is renting while on business. So you should check with your insurance agent or company.

Similarly, there's a great deal of variation in the coverage that credit cards provide. All four major card networks - American Express, Visa, MasterCard and Discover - provide some form of insurance coverage. (MasterCard, the report found, is the only network that does not provide coverage to all cardholders; a cardholder has to check the agreement to determine eligibility.)

CardHub ranked the networks on likelihood of coverage (maximum points: 55), quality of coverage (35 points maximum) and logistics of using the insurance and filing a claim (10 points). Visa ranked at the top over all, in part because of its coverage of towing and because it covers the charges imposed by the rental car company for the loss of use of the damaged car. Discover, American Express and MasterCard followed in the rankings.

Odysseas Papadimitriou, CardHub's chief executive, noted that all networks require that the driver decline the rental car company's supplemental insurance coverage for a card's coverage to apply. So do not take the rental company's coverage unless you are sure you nee d it, because in effect you'll be declining your card's policy, he said.

He noted that all networks generally exclude very expensive cars or antique models from coverage. But consumers should be aware that American Express also excludes popular sport utility vehicles like the Chevrolet Suburban, Lincoln Navigator and Toyota Land Cruiser.

MasterCard and Visa, furthermore, do not cover accidents on dirt or gravel roads. So beware if you are driving in rural Vermont, say, or overseas in Greece.

And again, if you're going overseas, American Express, Visa and MasterCard exclude coverage in certain countries. MasterCard, for instance, excludes the Republic of Ireland, Northern Ireland, Israel and Jamaica. Discover, which is the least accepted card network internationally, is the only network that does not have any country-specific exclusions, the report found.

Do you rely on your credit card's rental car insurance coverage? Have you ever had to file a claim under the policy?