Your credit card may not cover all the costs of rental damage…
Many credit cards include no-cost collision coverage on car rentals. Rental car companies are not too thrilled with the policy since it deprives them of big profits. For decades, travel advisors have suggested consumers forego the additional collision/loss damage waiver offered by rental companies and rely on the no cost coverage offered by their credit card. But beware of a loop hole in this ‘free’ coverage when there are ‘loss of use’ charges. This is the amount paid to the car rental company as compensation when a vehicle is not available for rental while undergoing repairs for damage incurred during the rental period.
American Express or MasterCard coverage includes ‘loss of use’ only if they can obtain car logs from the rental company. Because some companies, such as Hertz, do not and will not share information with card issuers, consumers may end up paying the charges themselves.
Although, many versions of Visa offer no-cost collision coverage when you use one of their cards to rent a car, Visa says compensation for each ‘loss of use’ 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 ‘loss of use’ amount is considered reasonable and therefore covered by the policy.”
Unless you’re sure your rental company will provide fleet logs, you may be better off using a Visa card rather than an American Express or MasterCard (including DinersClub.) Or, opt to pay for the collision coverage offered by the rental company. Gamblers may prefer to risk the loss-of-use charge as long as the vehicle damage is covered by their credit card, but they could be in for a big surprise when they’re hit with the charge.