The best card for rental car collision protection is Visa, says Card Hub, followed by Discover, American Express, and MasterCard. Card Hub, the big online credit card data source, recently completed a rigorous study of "free" credit card collision damage coverage and, although I don't completely agree with the conclusion, the detailed findings are useful.
- Availability. All Visa Traditional, Rewards, and Premium Rewards cards; all Discover cards; and all AmEx consumer cards include collision protection. The majority of MasterCards also provide this coverage, but many standard cards do not. Although this factor may be a measure of an overall card system's performance, it is of less interest to individual cardholders; if you have a card with coverage, it's as good as the others, and if you don't, you need to get another card.
- Excluded Vehicles. All cards exclude expensive and exotic cars, trucks, RVs, and large vans, although they describe them in somewhat different terms. AmEx, however, also excludes "large" SUVs such as Land Cruiser and Range Rover—an important drawback for a few renters.
- Excluded Countries. AmEx excludes rentals in Australia, Ireland, Italy, Israel, Jamaica, and New Zealand; MasterCard and Visa exclude Israel, Jamaica, and Ireland (Republic and North); Discover does not exclude any countries but provides limited overseas validity. This provision could be a deal-breaker for some AmEx cardholders.
- Time Limit. AmEx covers individual rentals up to 30 days anywhere; Discover covers 30 days anywhere and 45 days on rentals charged to a business card; MasterCard limits coverage to 15 days on all rentals; and Visa limits coverage to 15 consecutive days in your home country and 31 days in other countries. Only AmEx lists rules that disallow consecutive rentals longer than 30 days.
- Driving Exclusions. AmEx, MasterCard, and Visa exclude collisions during off-road driving; Discover doesn't say. AmEx and Discover cover accidents on unpaved but publicly maintained roads; Visa does not. MasterCard excludes unpaved roads and even paved roads that are not regularly maintained—a real potential gotcha. Beyond that, all card agreements include a laundry list of the "usual suspects" of excluded driving. Notable catches here are driving that violates the contract in any way and driving by anyone not listed as a driver on the contract.
- Loss of Use Coverage. Arguments against reliance on credit card coverage often question coverage for "loss of use" charges—charges rental companies add to a collision bill to cover possible revenue loss during the repair process—and supplemental charges for towing a damaged vehicle. The good news here is that AmEx, MasterCard, and Visa cover such charges; only Discover does not—a real deal-breaker.
Card Hub also rated cards in terms of the process required to activate coverage. Since they gave the same score to all four cards, the details aren't important. For more information, log on to Card Hub.
I would add two additional points:
- All ordinary AmEx, Discover, MasterCard, and Visa collision coverage is secondary, which means that the card pays only what you can't first recover from other insurance. Diners Club, which the report did not cover, provides primary coverage on all cards—a big plus—and you can extend AmEx coverage to primary for a fee of $24.95 per rental of up to 42 consecutive days.
- All credit cards require that you refuse the rental company's collision-damage waiver (CDW), and buying CDW negates a card's coverage. But base rental rates from some foreign "discount" agencies include a mandatory, basic high-deductible CDW. The last time I checked, AmEx and Visa representatives said that as long as you do not have the option to decline the bundled CDW, the card will pick up the deductible, but MasterCard's representative said their card will not.
All in all, the Card Hub report validates what many others and I have been saying for years: Rent a car with a card that provides collision coverage and avoid the rental companies' rip-off CDW prices.
Ed Perkins on Travel is copyright (c) 2012 Tribune Media Services, Inc.
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