I Wrecked The Rental Car

[Leesbro63]

The bad news is that I backed into a tall cast iron mailbox and totally took out the tail hatch and glass of a spanking brand new 2013 Ford Escape that I rented during a short trip this past weekend. The good news is that although I NEVER EVER take the pricey, high markup insurance, I decided to do so as the place I was in was predicting terrible weather and it was only a 2 day rental ($12.50 per day or $25 for the insurance for the whole trip). Figured I DO have good insurance at home, but with the extra risk and a strange car might as well add some protection. Ironically, backing into the mailbox had nothing to do with the weather, just a blind spot. Anyway, the good news is that the major rental car company basically just laughed and said "good thing you bought our (overpriced, over sold) insurance. Everyone should. You're covered. Bye bye". I agreed that everyone should buy and it breathed a sigh of relief and turned the car in.

That being said, if I had NOT purchased their coverage, they could have inflated the claim and would have also charged me for down time. I would have also had an accident on my own insurance record (unless I was willing to pay for the big claim). I am no repair guy, but I'd bet there was at least $3000 damage. So even though I have coverage through my own insurance, I can see that someone in this situation doesn't have the same control as they have when pricing out a repair of their own car in their hometown. In other words, it really is NOT the same coverage.

So it got me thinking that I need a credit card that has this coverage. Not Mickey Mouse coverage that merely picks up my deductible, but full primary insurance for renting cars. A friend says he has some "special, non-advertised Amex" where you pay $25 per rental (regardless if it's one day or a month) for primary coverage. I'm not sure if you have to call them to opt in or if Amex automatically charges your account when you charge a rental car.

Any tips on what credit card to get would be appreciated.

[runner9]

No specific advice, but last week I searched the box in the upper right for rental car insurance and rental car credit card etc and learned about the regular AMEX $24.99 insurance as well as the built in insurance that comes with VISA, etc.

Just drove 1,028 miles over 4 days on the rental with no issues, thankfully

[understandingJH]

I use the Blue Cash Everyday card from AMEX and it offers this type of protection, they call it Premium Car Rental Protection. If you get that card you have to opt in for the car insurance feature. You will get charged $25 when you use your AMEX card at the rental agency. It is primary coverage, but I don't think it covers other vehicles, only the one you are driving (i.e. just don't hit other cars).

AMEX Premium Car Rental Protection.

[mudfud]

So it got me thinking that I need a credit card that has this coverage. Not Mickey Mouse coverage that merely picks up my deductible, but full primary insurance for renting cars. A friend says he has some "special, non-advertised Amex" where you pay $25 per rental (regardless if it's one day or a month) for primary coverage. I'm not sure if you have to call them to opt in or if Amex automatically charges your account when you charge a rental car.

Any tips on what credit card to get would be appreciated.

Check out this previous thread on this exact issue:

http://www.bogleheads.org/forum/viewtopic.php?f=11&t=96609

[ryuns]

I'd think that the "special" $25 extra insurance is still just insurance, and is probably unnecessary unless you're keeping the rental for a longer period. Assuming you have your own insurance and a card that covers your deductible. So the prospect is, you pay $25 and then you happen to get in an at-fault accident while driving, and, then sum total of the benefit to you is that the accident stays off your record? That sounds like the kind of limited upside insurance that Bogleheads avoid. What am I missing?

All that said, if you're in a situation where you WOULD be responsible for the cost if you had an accident, do make sure you get covered! My only at-fault accident in my driving career was a fender bender with a gentleman driving a rental car. I needed no repairs on my car (I have no coverage anyway, but I fixed a small dent), but the bill from Enterprise was $1500, including a ridiculous long period of down time at a high price, all new parts, expensive labor, processing fees, etc. My insurance company paid it, and because it had been so long since I'd had a claim, my premiums were not raised.

[WendyW]

Free insurance coverage from your credit card seems too good to be true, but isn't:

I rented a minivan a couple years back: had no insurance myself, declined the car rental place's insurance, and relied on the free insurance offered by my Visa card to cover me.

Managed to scrape the side off the vehicle. Whoops! Thousands of dollars in damages.

I had to fill out a 1-page form, no cost to me, and Visa took care of everything else. So now I am a believer in the free insurance.

[RenoJay]

I have no advice about your particular story, but just wanted to related an anecdote. The one time I have ever taken out the over-priced, over-sold insurance from a rental company was when I was traveling in Brazil. Being that I was in a foreign country, I just figured, "better safe than sorry." An hour after renting the car, I parked for ten minutes to go take some pictures. Literally behind my back and in very little time, some thugs broke the lock on the door, got into the trunk, and stole all my stuff. Fortunately, damage to the car was covered. I guess when that little voice says, "Buy the ridiculous insurance this one time" it actually makes sense to listen.

[neurosphere]

I have a Discover Escape card ($60 annual fee; but with signup bonus was free for 2 year). This card offers PRIMARY car rental insurance. I rent cars about 3-4 times year, and thus is somewhat cheaper than using the $25 Amex primary.

This card also offers double miles on all transactions (which can be used 1 mile = 1 penny at Amazon.com). Thus it can also be a good card to get 2% "cash" back on purchases at Amazon, and travel purchases on the card (10,000 miles minimum though).

[lindisfarne]

Free insurance coverage from your credit card seems too good to be true, but isn't:

I rented a minivan a couple years back: had no insurance myself, declined the car rental place's insurance, and relied on the free insurance offered by my Visa card to cover me.

You have to be a little careful when renting a car if you don't carry insurance yourself. Not all states require rental car companies to provide liability coverage - CA is one of those states (at least, it was a few years ago); there are at least a few others. Credit cards usually do not provide liability coverage.

[Leesbro63]

What about "Insure your Bubble": http://tus.protectyourbubble.com/rental ... l-car.html

[armeliusc]

What I'd be interested to hear is some anecdottal stories of someone who has their own full-coverage car insurace and also uses insurace from credit card (e.g. VISA) to rent a car and then had accident / damage to the car. How do they fare ? Have this situation ever been "tested" ?
I've always declined the damage waiver when I rent a car and rely on both my own insurance and VISA's; thankfully I've never had accident. But I always wonder if I'm covered enough.

AC

[ryuns]

What I'd be interested to hear is some anecdottal stories of someone who has their own full-coverage car insurace and also uses insurace from credit card (e.g. VISA) to rent a car and then had accident / damage to the car. How do they fare ? Have this situation ever been "tested" ?
I've always declined the damage waiver when I rent a car and rely on both my own insurance and VISA's; thankfully I've never had accident. But I always wonder if I'm covered enough.

AC

I can offer that my mom, several years ago, had her parked rental clobbered in a hit-and-run. Her insurance co, USAA, paid the bills to the rental car company and VISA ponied up the entire deductible ($500 or 1000, I don't remember), apparently without incident. I'm not sure what VISA would have offered if she either did not have insurance or pushed harder for VISA to pay, but I imagine that USAA would have explored that, were it an option, to keep themselves from having to pay. While free to her, this obviously wasn't completely ideal, as I imagine it appears on her insurance record. That's comfort enough to me that I'm convinced additional coverage is not necessary, but I also do not have collision coverage in my own, rather ragged, car, and would be awfully sad to have wrecked a rental.

[Leesbro63]

OK, I have researched this extensively and here is what I have concluded...(some of this has already been discussed above):

For frequent travelers, AMEX has a program (not available to all card holders...I don't know who is and who is not eligible) where you pay about $25 PER RENTAL, regardless if the rental is 1 day or up to 42 days. It covers damage to their car as well as charges for down time. For infrequent renters (me) and for 1 or 2 day rentals, it's probably cheaper and easier just to pay the juice at the counter. Because even with Amex, you get billed then Amex pays. Versus just walking away, like I did, if you take the insurance offered by the rental company. There is a CapitalOne Venture card ($60/year) with a similar program and maybe some other too that I missed.

Unfortunately if you hit someone or something, your own insurance (or you, out of pocket) has to pay for that unless you take a REALLY expensive package at the rental counter. So there is no way to totally protect against having to put in a claim with your own company (unless you go with the REALLY expensive counter stuff). But the majority are what I did...banged up an unfamiliar car on unfamiliar roads.

My main point, however, is that I believe for most affluent Bogleheads, this is a risk (damage to the rental car) that is worth separately insuring. I did not believe this before really thinking this through in light of my recent "incident". What changed is that I realized that we have no control over the repair process. And I realized that the risk of an accident is greater in an unfamiliar car on unfamiliar roads. It's not a catastrophic risk, however...the worst that can happen is that our insurance company pays more than would be if we had control over the process. And we have to pay the deductible and we get demerits that can raise our rates with less ability to do damage control (such as paying out-of-pocket for an accident that might cost just over your deductible, which you might do with your own car and not have to report the claim). Also ALL Visa cards have coverage that covers your deductible, by the way. You still pay then can submit a claim to VISA. Which is odd, because if you wreck your own car, there is no way to get your deductible covered. Again, risk asymmetry in wrecking your own car versus wrecking one owned by AVIS/HERTZ/ETC

But I have changed my thinking and now believe "collision damage wavier" coverage, either thru a pay-per-rental credit card program or at the counter, is worth doing. And in my case, since I generally only rent for 1 or 2 days and even that is only a few times per year...and I have no real use for a pricey Amex or CapOneVenture card...sucking it up at the counter now seems to be the least of all evils. And there is the bonus that if you do suck it up at the counter and have an "incident", you can just "walk away", versus being in the middle of a credit card vs rental company ying-yang over the damage amount.

One more thing: This changes how to shop for a rental car. I now will look at the price including the collision damage wavier.

[Peter Foley]

I signed up for the insurance option through AmEx. As you state it is $25/rental when you pay for your rental with a AmEx card. I tend to rent for longer periods - a week at a time, and I also do foreign rentals. The AmEx insurance does not cover you in Ireland, Great Britain, or Italy. In France, Ireland, Italy and Spain, where I have rented, the daily cost of the agency insurance was equal to the cost of the car rental.

[markpa]

I'm surprised at how many bogleheads enjoy overpaying.

My car insurance that I purchase at home covers me 365 days a year, in whatever vehicle I drive/rent (NOTE: check your policy language carefully. Mine covers me as long as it's not a TRUCK, VAN, or worth over $65k MSRP) This costs me about $2 a day, with a deductible that I'm comfortable with plus a $1 million combined single limit of insurance, and full tort.

I agree that a credit card offering FREE, primary rental car coverage would be ideal (so as not to involve my insurance), but those seem few and far between. I believe Diners club cards, which are no longer issued, provide that coverage. I drive a rental as carefully (or carelessly, as some would accuse me) as my daily driver. If I had the skills to predict what would happen on what day, I'd spend those insurance dollars on the lottery numbers rather than insurance.

If I'm in an accident that I cause, more than likely my insurance will already find out about it as they monitor my drivers record. If they don't find it on their own, I will be required to disclose it when I call around to compare rates or change coverage levels. There goes most of the benefit of paid car rental insurance.

The car rental companies offer this at a price, so does Amex, because the have studied the statistics and are all making an ridiculous profit margin on it. I've seen many at the rental kiosks hit yes too many times and then their $100 a week rental is now over $500. The look on people's faces when they get the upsell "you wouldn't want to have to put a CLAIM on your insurance, would you?" is amazing.

I've had over 200 successful car rentals. Three cracked windshields, one flat tire, one scratched rim, one broken door handle, three valet-inflicted scratches/dents. I have never been charged once. I agree that you'll hear of intimidation stories online about rental companies charging for loss of daily use. Those disappear rapidly when your own insurance company states they will only pay them with fleet utilization records.

Ask a rental company how many wrecked cars come in, after a days' returns. Probably less than 1 in 2000. Even those paying Amex's reasonable $25 a rental, that's $50,000 in insurance paid out for those $300 bumper repaints or $1000 door replacements.

Note: there is one scenario which I have strongly considered: Most cards indicate their coverage is secondary IF you have primary insurance through other means. If I do not have a personal policy, because all my automobiles are owned by a corporation that I control, then I automatically qualify for their primary insurance benefit. However, since most card benefits only pay for the car itself, not liability caused to others, it' still not a good plan

[Leesbro63]

Am I really obligated to report minor accidents to my own insurance company, or when shopping for insurnace, that I make whole with rental counter insurance? Or if I back my own car into a mailbox and pay for the repair out of pocket?

Another question related: Lets say I am shopping for a new auto insurance policy and I DO report the accident that I had...backed a rental car into a mailbox but did not need to put in a claim on my current insurance. Will an insurer still penalize me for that if it does not turn up on some sort of insurance claim registry?

What if I open my door into a pole in a garage and pay the Dent Wizard (paintless repair) fix it? Do I need to report that? A few years ago I hit a big pothole, filled with water (couldn't see it). Had to buy a new tire and wheel and have the car aligned. Must I report that?

I don't disagree that rental counter insurance has an unBogleheadish markup. But I do now believe the risk of damaging in unfamiliar car on unfamiliar roads is "enough greater" than driving my own car at home to justify the cost. Unless my own insurance company will STILL penalize me even though they did not have to pay, which I have never heard of happening.

[Easy Rhino]

aren't there still some super premium credit cards (amex platinum, perhaps) that offer primary insurance on rentals?

[tadamsmar]

You can sometimes get discounts and benefits in terms of additional rental car insurance by renting through you auto insurance affiliation program. Here's the program for USAA that I use:

https://www.usaa.com/inet/pages/rental_cars_main_public

http://www.budget.com/budgetWeb/html/br ... a/faq.html

[RustyShackleford]

Not quite comparable, but I trashed a tire (naughty boy, driving on a bad dirt road) and rental car co billed my for $100+. My Penfed VISA covered it (but I think it's any VISA). A fair amount of paperwork, but not too bad. Not sure how it'd work on a much larger claim. Good luck.

[freebeer]

My main point, however, is that I believe for most affluent Bogleheads, this is a risk (damage to the rental car) that is worth separately insuring. I did not believe this before really thinking this through in light of my recent "incident". What changed is that I realized that we have no control over the repair process. ...

OK so you say it's "worth separately insuring". How about some analysis? My simplistic math is that $12.50 per day means in 200 rental days you are out $2,500 which is the ballpark of your "incident". I'm a daily driver and decades of evidence tells me the chances of me having a $2,500 accident are far, far less than once every 7 months - less than once every 7 years. Sure being in an unfamiliar car on unfamiliar turf must up the odds of damage but I've never ever damaged a rental car and I've done a lot of business and personal travel. And you suggest that you have no control over the repair process but that's not necessarily the case because the car rental company has to think about PR and repeat business and you can always challenge the credit card bill - they could even be incented to settle for less than their costs to avoid the hassle and costs of a dispute.

So to me an affluent person who doesn't carry collision insurance on their personal car shouldn't buy the much less efficient rental car collision insurance (liability of course is another matter altogether!). That they are affluent is precisely the reason they can self-insure.

To me the moral of the story is more that one random incident shouldn't change a calculation about risk. The insurance is a hugely profitable offering for the car insurance companies aka "unfair", and for Bogleheads any such "sucker offer" should on first principles not be taken. Just like you shouldn't buy insurance in Blackjack even though the last time the dealer had an ace up she did have one. (Unless you are counting cards so know that the rest of the deck is especially rich in 10's in the latter case, or I suppose know you are a terrible driver in the former case).

[555]

"The bad news is that I backed into a tall cast iron mailbox and totally took out the tail hatch and glass of a spanking brand new 2013 Ford Escape that I rented during a short trip this past weekend. The good news is that although I NEVER EVER take the pricey, high markup insurance, I decided to do so as the place I was in was predicting terrible weather and it was only a 2 day rental ($12.50 per day or $25 for the insurance for the whole trip)."

This sounds like market timing.

[centrifuge41]

Full primary coverage? United MileagePlus Explorer card, $95 year is another option. Not sure how the coverage is compared to Escape by Discover, or whether some rental agencies may take Visa but not Discover, etc.

[JMacDonald]

I do not rent cars very often, but it has happen twice in the past year or so. I am planning on renting a car this July. So this conversation got me to investigate my insurance for renting a car.

I have AAA, and I talked to my agent today. I was concerned about the "lost of use" that I might get hit if the car was damaged. She told me that they would want to see that all the cars were rented for the car rental company to make that claim.

She also suggested that just before I go on my trip that I come in and change my deductible to $100. Right now it is $1000. She said to change it back after the trip. After talking to her, if the car happens to get damaged, I will just deal with it through AAA.

[ragabnh]

Can't you buy collision and liability insurance at other places rather than the rental agency, may be that way you can get a better deal.

[Cyclone]

How do you sign up for the Amex $25 a day coverage? I am not finding it on the website.

[JMacDonald]

How do you sign up for the Amex $25 a day coverage? I am not finding it on the website.

American Express does not make it easy to fund out information. I had to google to find this link: https://www295.americanexpress.com/prem ... -LearnMore

[Cyclone]

I just signed up. The cost is $18 for California residents, if that changes anyone's cost/benefit analysis.

[interplanetjanet]

My simplistic math is that $12.50 per day means in 200 rental days you are out $2,500 which is the ballpark of your "incident". I'm a daily driver and decades of evidence tells me the chances of me having a $2,500 accident are far, far less than once every 7 months - less than once every 7 years.

I think that the "terrible weather" part of the story is relevant. Accident rates, both at-fault and not, rise during exceptional weather conditions. While I've driven in blizzards before, I haven't in almost ten years, and if I was faced with bad snowfall or likely black ice I would rate my risk as much higher than normal. I can see the utility of purchasing a LDW in such circumstances since its cost does not vary with prevailing conditions; it may not be such a slam-dunk for the insurance company in this case.

[Leesbro63]

Exactly. Which is why I took the CDW, when I never do otherwise. The irony is that my accident was not wearher related, however.