Car rental alert: You may need insurance after all

BOSTON (10/30/07)--For years, you've made the wise decision not to buy expensive collision damage waivers (CDW) for car rentals if your credit card company already has identical coverage. Now, despite what seemed like good advice, many consumers are finding out the hard way that they're not covered for loss-of-use (LOU) charges (smartertravel.com Oct. 25).

SmarterTravel.com expert Ed Perkins did some investigating, and discovered some gaps in credit card coverage (PR Newswire Oct. 25). Many people believed that if a credit card covers collision damage repair, it also covers loss of use charges. However, some credit card companies require that the car rental company provide a vehicle log for the credit card company's coverage to work. If the car rental company refuses to supply the log, the credit card company can refuse to cover any charges for loss of use, and you're stuck with the bill.

Anecdotes posted on the SmarterTravel Website provide several expensive scenarios. In one, some car rental companies charged LOU at the full, undiscounted, short-term rental rate rather than using the discounted rate on the renter's contract. In another example, the car rental company imposed LOU charges even though there were plenty of other cars in the lot and it didn't lose any revenue while the damaged car was being fixed.

Which companies aren't sharing vehicle logs? Perkins writes that Avis, Budget and Hertz don't share logs with either credit card or insurance companies. Although American Express and MasterCard must have logs to honor their coverage, Visa--according to Perkins--indicated it will try for an equitable solution. And even if you have American Express' Premium Car Rental Protection plan, you'd still need the vehicle log to be covered.

Here's some advice:

• If you want to rent from a car rental company that does provide vehicle logs to credit card issuers, stick with Alamo, Enterprise or National. Others may provide logs--check before you rent.
• Using Visa may give you the opportunity to negotiate coverage for LOU; using American Express and MasterCard won't.
• If you want to avoid financial exposure, buy CDW when you rent, or purchase separate travel insurance that covers rental car damage--you may pay a fraction of what you'd pay the car rental company for the same coverage.

For more information, read, "Research, Plan, and Budget for That Special Vacation" in Home & Family Finance Resource Center.

courtesy of cuna.org