Financial experts have always cautioned drivers about extra rental car insurance programs, saying that these are borderline scams. Car rental companies offer customers such coverage for $15 to $25 a day, which is hardly practical. If you have auto insurance coverage or own a credit card, you normally wouldn’t worry about car damage liabilities. It is a known fact that some auto insurance policies cover customers in accidents or collisions even where they are not using their own cars. In addition, many credit card companies are willing to pay for the additional expenses that are not covered by your auto insurance. In some cases, they claim that they would shoulder for all incurred costs if a customer is not covered.
Many credit card holders however should not be too complacent, as cases show that the many credit card issuers do not deliver on their promises.
All Visa and Diners Club cardholders have access to no-cost rental car collision and theft protection programs. Other major credit card companies such as Discover, American Express and Mastercard offer such coverage to their premium clients.
If you have auto insurance and you are enrolled in such programs, your credit card company would either pay for expenses that are not covered by your primary insurance, or even shoulder all of the costs incurred.
However, one component that’s left out or stated vaguely in many credit card policies are extra fees charged by rent a car companies. One credit card holder Kimberly Esquivel of San Antonio, Texas found out about it too late in the game. Esquivel rented a car for a trip with her family to Sea World in Florida. Since she didn’t have insurance with her, she called up her Discover to make sure that they would cover for any damages should she get into an accident. She was informed that the company would take care of everything as long as she pays for her rental using her credit card which she did.
Unfortunately, she got into an accident while she was backing up the car that left the vehicle partially damaged. So she talked to Discover and filled up all the necessary documentation so she would not have to pay for the repair of the car. However, after several weeks she got a bill for $1,000 for some fees that Discover refused to pay. The credit card company did pay for the repair of the vehicle but was adamant in not paying for administrative fees and loss-of-use fees that the rental car company charged them.
She later found out that Discover’s policy did not include loss-of-use fees which made her upset because the company didn’t fully explain this particular detail to her when she called them up. Other credit card issuers pay for loss-of-use fees provided that the car rental company provide them with a fleet utilization log proving that the latter didn’t have spare vehicles to replace the damaged car while it is undergoing repair. Unfortunately, this requirement is hardly met as most rent a car companies refuse to provide utilization logs to banks, which they consider as confidential and classified documents.
Esquivel is just one of the many disgruntled customers who felt they’ve been short-changed by their credit card companies into believing that they are sufficiently covered. To avoid falling prey to such deceptive schemes, it is recommended that you choose carefully credit card companies that you would be dealing with and to scout for those that offer the most fair deals.