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DON'T WAIVER.
Navigation: Main page
Author: Solheim, Mark K.Stevenson, Alison
Section: Your Money
INSURANCE
Should you still decline RENTAL-CAR COVERAGE? Most of the time, yes.
YOU SHOP hard to rent
a car for $26 a day, and then the agent at the counter says you should
nearly double that rate by taking the collision damage waiver (CDW) to
protect your wallet if you bang up the car. You know your auto policy
covers rental cars, and your credit card will pick up the deductible,
so you turn down the extra insurance.
Did you do the right
thing? Probably. But to remove any niggling doubts, check your auto
policy and credit card benefits so you're sure about what's covered and
what's not. In fact, make sure your card offers this perk. Some don't,
as discussed later, Even if yours does, watch out for loopholes.
If you don't have
collision and comprehensive coverage on your auto policy, there's
nothing to carry over to the rental. In that case, credit card coverage
would kick in to cover all damage to the car rented with the card. If
you have your own coverage, the credit card just covers your
deductible. But card coverage tends to have more exclusions than auto
policies do. For example, some personal auto policies limit the length
of coverage on rental cars, typically to 21 or 30 consecutive days. The
protection offered when you charge a rental to a Visa or MasterCard
ends at 15 days; for American Express, it's 30 days and for Discover, 3
1.
Your auto policy may
exclude the rental of motor homes and big trucks. Card coverage is even
more strict. Amex and MasterCard won't touch any vehicle with a
suggested price over $50,000. Discover covers any vehicle, but only up
to $25,000 in damages. Most cards also ignore a host of expensive
sports cars. On its list of verboten vehicles, MasterCard even includes
Corvettes and Mercedes-Benzes. Amex nixes most sports cars and all
pickups. In other words, check carefully before you splurge on a rental
car.
If you wreck a
rental, in addition to the cost of repairs you could be liable for
"lost income"--the $35 to $50 a day in rental fees that the company
loses while the vehicle is in the shop. Your auto policy may pay, say,
$20 of such fees, often with a ceiling of several hundred dollars. Visa
and MasterCard coverage would pick up the balance, but Amex and
Discover coverage would not. CDW coverage would pay these fees.
Credit cards usually
pick up the tab if you crash a car overseas (your own auto insurance
doesn't). But not everywhere. Visa doesn't extend coverage to Ireland,
for example, but MasterCard does--in most cases. Check with your card
issuer before you turn down the CDW offer when renting abroad.
Rental companies
provide liability insurance as part of the rental agreement, but
usually at skimpy state minimums. Your auto policy would kick in for
damages beyond the limit. Credit card protection doesn't include
liability, and neither does CDW. So if you don't own a car and
therefore have no auto coverage, consider beefing up the liability
protection when you rent.
Not all credit cards
offer rental-car insurance, either. You don't have it with Visa
Classic, MasterCard Standard and Discover Classic. American Express
makes student cardholders leave home without it. Some corporate cards
leave you bate, too. MasterCard offers it to Gold and Platinum
debit-card holders, but Visa withholds it on debit cards.
Even with card
coverage, some drivers figure the CDW is worth the cost. "When I rent
for pleasure," says David Thompson of the Florida Association of
Insurance Agents. "I tend to buy the CDW because I don't want the
hassle of a claims process." Also, if you make a claim with your
insurer, you'll have another accident on your record. The CDW covers
damage without getting your insurer involved.
~~~~~~~~ By Mark K. Solheim, Reporter:: and Alison Stevenson
Some items on this website are used by permission granted
in the Fair Use guidelines of the 1976 U.S. Copyright Act.
info [at] singlearticles.com
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