While most consumers aren't aware of this membership perk, it is a standard benefit offered by the four major card networks (i.e. Visa, MasterCard, American Express, and Discover) that may make it unnecessary for cardholders to purchase expensive supplemental auto insurance whenever they rent a vehicle. In other words, it can save consumers an average of $10 - $20 per day that they have a rental car. There are, however, caveats to each network's plan - including coverage restrictions based on what type of card you have or vehicle you rent, where you rent a vehicle, how long your rental period is, and the nature of the damage done to a rental - that consumers must understand if they are to ensure protection and save money.
Below you will find some of the key takeaways from this study, which will help clarify many of these issues, along with commentary from Card Hub CEO Odysseas Papadimitriou:
Visa's rental insurance policy received the highest score in the study at 87%, followed by Discover (85%), American Express (82%), and MasterCard (73%).
Odysseas Papadimitriou (OP): "We evaluated the networks in a number of different categories, ranging from which cardholders are eligible to how claims must be filed, and compared their policies to our subjective definition of the 'ideal' policy - one where you'd know what you were getting based on common sense, without having to read the fine print. This is extremely important because we've found that far too few credit card users do indeed read their cardmember agreements. In the end, Visa's policy won out, largely due to the ubiquity of coverage on network cards and the fact that it covers towing charges and a rental company's loss of use."
MasterCard is the only network that does not provide rental insurance coverage for all cardholders.
(OP): "It really is a benefit for consumers not to have to check their credit card agreements to determine whether or not they're covered. People using a Visa, Discover, or American Express credit card have that peace of mind."
In order to be covered by any of the four networks' policies, customers must charge the entire rental purchase on their card and decline the supplemental insurance plan offered by the rental car company.
(OP): "The natural reaction from most consumers, including myself, is to think that purchasing a rental company's supplemental insurance plan would give them double the coverage. However, rather than reinforcing the coverage they already have, they'd be nullifying network coverage and paying to do so."
MasterCard does not cover accidents occurring on dirt or gravel roads, and both Visa and MasterCard state that roads must be regularly maintained by the government for coverage to apply.
(OP): "When you consider the fact that dirt and gravel roads are popular in many vacation destinations - whether they are near beaches, lakes, or mountains - the exclusion of coverage for accidents that occur on them is more significant than you might originally think. In other words, what might be considered quaint, rustic, or part of a place's charm to most vacationers is a cause for concern for those relying on the rental coverage provided by their credit card."
None of the networks cover trucks, off-road vehicles, vehicles with open beds, or cars that are considered exotic, expensive, or antique; American Express is the only network not to cover certain SUVs, including popular models like the Toyota Land Cruiser, Range Rover, GMC Yukon, and Suburban and Tahoe from Chevrolet.
(OP): "The networks do not want to cover vehicles that may be used for commercial purposes, given their increased risk of getting damaged, or cars that may be of particularly high value, for obvious reasons. It's therefore important that consumers check their network's insurance policy prior to renting a vehicle that could conceivably be excluded for these reasons. This won't be an issue for those who choose standard rentals, with the obvious exception of American Express cardholders that rent SUVs."
Discover is the only network that does not exclude coverage in certain countries; none of the other three major networks covers rentals in at least Israel, Ireland, and Jamaica.
(OP): "It's obviously common for international travelers to rent cars in order to get around, and if you have a credit card on a network that has a worldwide presence, you might expect your rental coverage to follow you wherever you go. Unfortunately, if you have a card on one of the three largest networks, you could be in for a rude awakening when visiting certain popular destinations given that coverage does not always apply. Oddly enough, Discover, the least accepted card network internationally, is the only network that does not have any country-specific exclusions."
Click here (http://bit.ly/CCautorental) to read the full study.