Car Renters Beware: Credit Card Insurance May Not Have You Covered

BOSTON, Oct. 25 /PRNewswire/ -- SmarterTravel.com, a comprehensive online travel resource, has announced a three-part article series on car rental insurance that every traveler needs to read. In the past, SmarterTravel, along with other industry experts, advised travelers not to purchase collision/loss damage waivers (CDW) because it is generally overpriced and many credit cards offer identical coverage. The advice has always been: use a credit card with collision coverage and you'll be protected through its policies. Moreover, any card that covers collision damage repair also covers "loss of use" (LOU) charges. However, in taking a closer look at the no-cost collision coverage offered by several major credit cards, SmarterTravel found that some credit card companies require a vehicle log. Travelers are learning quickly that credit card coverage is not as fool proof as it sounds.

In Part One of the article on SmarterTravel.com, Ed Perkins reports on the gaps in credit card coverage offered by several major companies, including American Express, MasterCard and Visa. His findings include:

-- American Express and MasterCard do not pay LOU charges unless the rental company provides a vehicle log. Because some rental companies, including Hertz, say they do not and will not share that information with the card issuers, renting with either of those cards presumably risks not being compensated. -- Visa says compensation for each LOU claim is "evaluated on the specific circumstances and merits of the claim. The policy's underwriter will work hard on behalf of the cardholder to reach a fair and equitable settlement such that the LOU amount is considered reasonable and therefore covered by the policy." -- For more information, click on: http://www.smartertravel.com/link/car-rental-credit-card-coverage

Part Two of the report looks more closely at the rental car companies, how they assess LOU charges and their approaches. Those findings include:

-- Avis and Budget (jointly owned), like Hertz, do not provide vehicle use information to credit card issuers. However, Alamo, Enterprise and National (also jointly owned) do provide such information. -- If you opt for using a card, you can lower your risk by renting only from Alamo, Enterprise, National or some other company you know supplies credit card issuers with the required vehicle log information. Additionally, using a Visa card in preference to American Express or MasterCard may help if you find yourself in this situation. -- If you rent from Avis, Budget or Hertz with American Express or MasterCard -- and the car is damaged during your rental -- you'll almost certainly be hit with a loss-of-use charge your card won't cover. -- For more information, click on: http://www.smartertravel.com/link/car-rental-credit-card-coverage-part-2

"Given all these circumstances, car rental insurance is more confusing than ever for many travelers," said Perkins. "For consumers willing to accept some level of risk, using your credit card to cover the damage is probably still your best option. However, if you are truly uncomfortable facing any financial exposure, then my advice is to buy the CDW/LDW. Or, buy travel insurance and get a policy that includes an option to cover rental car damage for a fraction of what you would pay the rental car company."

Part three of Perkins' report, "More Rental Car Credit Card Grief," is available at http://www.smartertravel.com/link/car-rental-credit-card- coverage-part-3. In the report, Perkins will address reader questions and report on additional reader experiences. This final report will try to answer the question, "Can and will the credit card companies be able to respond to the threat posed by the rental companies?"

About SmarterTravel.com

SmarterTravel.com, a comprehensive travel resource site, offers consumers up-to-date expert advice and information for their every travel need. Created by an unbiased team of dedicated journalists, the site's goal is to help travelers better manage every aspect of their travel experience by making researched, informed decisions. Unlike other online travel resources, SmarterTravel.com brings together all the best content in one place, giving consumers the tools they need to ensure a great travel experience. For more information and travel advice, visit http://www.smartertravel.com/.