Hertz - Car rental insurance interesting info

• Oops, you just backed into a parking meter. Not to worry, your personal auto insurance covers damages to your rental. True or False?

The answer in most cases is true, but with a big warning from us. Credit card companies promote their promise to cover your insurance if you rent a car using their card. As a result, a number of unsuspecting renters who don’t own a car—and thus don’t have their own insurance—think they are covered by their card. Not so. Almost all credit card companies offer something called “secondary insurance,” which only kicks in when you’ve exhausted all the limits of your primary policy. And if you don’t have a primary policy, then you are not covered at all. Even if you are covered, check your policy limits. If the car you own (for which you pay personal insurance) is only worth $5,000 and you total a car worth $20,000, you’re out $15,000.

source yahoo

Even if you are covered, check your policy limits. If the car you own (for which you pay personal insurance) is only worth $5,000 and you total a car worth $20,000, you’re out $15,000.

This is not completely true. Other coverages have an impact on this, as do various state laws. In short, I wouldn't be concerned of damage you may cause to your rental, including theft or total loss if you have full coverage.

I don't own a car. I checked with Visa, albeit only by phone, and was told that since I had no car insurance the coverage provided by them would be applied... was I misinformed? I have not had an accident and never filed a claim. Anyone with no car of their own have direct experience with a claim?

And if you don’t have a primary policy, then you are not covered at all.
This is so untrue. Go read the actual section explaining the coverage in the cardmember agreement or benefits guide that came with your card. It does say that the coverage comes after all other insurance coverages have been exhausted but nowhere does it say that you are out of luck if you don't have a "primary" insurance. For all intent and purpose, this will become your primary coverage if you don't have any other coverage.

By the way, I have read the actual benefits guide for visa and amex cards. Both are more or less explicit in that respect:

Visa Guide to Benefits
How does this benefit apply?

Within your country of residence, Visa Auto Rental CDW supplements, and applies excess of, any valid and collectible insurance or reimbursement from any source. It does not duplicate insurance provided by or purchased through the auto rental company; it will not pay for losses reimbursed by your own insurer, employer, employer's insurance, or any other valid and collectible insurance; however, it will pay for the outstanding deductible portion or other charges, including valid administration and loss-of-use charges not covered by your applicable automobile insurance policy. Outside your country of residence or if you do not have automobile insurance, this benefit is primary in those countries where it is available, and in that case, you do not have to claim payment from any other source of insurance before receiving the benefits.

Amex card agreement
What Excess Coverage Means

Car Rental Loss and Damage Insurance is an excess insurance plan. This means that this excess coverage will reimburse the Cardmember only for losses/expenses not covered by plans, such as a partial collision damage waiver, any personal auto insurance, employer's auto insurance or reimbursement plan or other sources of insurance. When these other plans apply, a Cardmember must first seek payment or reimbursement and receive a determination based on the stated terms of such other Plans, that any such Plans do not provide coverage before this excess coverage will reimburse the Cardmember.

Highlighting in italic done by me. Also, any typo that might be in the quotations would be my fault as I transcribed the documents that I have by typing them in. :p

While we're on the subject, worth pointing out is that some credit card insurance companies have significant restrictions on their car rental insurance -- in some cases an SUV might not be covered when a car is; often trucks are excluded.

Check your fine print!

lets say you didn't have any personal insurance to cover a rental car and you totaled a rental car, i can't see how a credit card company would absorb the cost of a $25,000 vehicle, they would be losing tons of $$$, its make perfect sense that you would not be covered on a credit card if you didn't have any personal insurance to cover the rental car first. Share any of your stories about it

lets say you didn't have any personal insurance to cover a rental car and you totaled a rental car, i can't see how a credit card company would absorb the cost of a $25,000 vehicle, they would be losing tons of $$$, its make perfect sense that you would not be covered on a credit card if you didn't have any personal insurance to cover the rental car first. Share any of your stories about it

The thing is, people rarely total cars when compared to the number of total rentals. I think it is rare that the credit card company has to pick up the tab since most people have primary coverage.

In college a friend caused about 3K worth of damage to a rental car. While it took a few conversations to explain to the rental company and credit card company that she did not have her own car insurance policy nor a car which is why she was renting a car in the first place, eventually the credit card company absorbed the total cost of the damage and paid the rental company.

Not sure if this will always work but it did in this instance.

I don't own a car. I checked with Visa, albeit only by phone, and was told that since I had no car insurance the coverage provided by them would be applied... was I misinformed? I have not had an accident and never filed a claim. Anyone with no car of their own have direct experience with a claim?

If you do not have primary insurance, your secondary will become primary. I don't believe the statement is at all accurate that if you don't have primary you will get no coverage at all from the secondary.

Though it's a typical car rental counter tactic to push the insurance on you.

Check with your card issuer before falling for the statements that may or may not be true.

While we're on the subject, worth pointing out is that some credit card insurance companies have significant restrictions on their car rental insurance -- in some cases an SUV might not be covered when a car is; often trucks are excluded.

Check your fine print!

Also, premium and expensive sports cars are usually not covered either. Your agreement will have exhaustive list of brands (like BMW, Mercedes-Benz, etc.) and/or specific car models from more "ordinary" brands (like Nissan 350z).

lets say you didn't have any personal insurance to cover a rental car and you totaled a rental car, i can't see how a credit card company would absorb the cost of a $25,000 vehicle, they would be losing tons of $$$, its make perfect sense that you would not be covered on a credit card if you didn't have any personal insurance to cover the rental car first. Share any of your stories about it

From what I understand, the credit card companies pay a certain amount of money to another insurance company to provide the coverage. I have also heard (read: I'm not sure... :D) that if you are determined to be a "high-risk", for example, you have submitted a certain number of high-amount claims :eek:, the card company will cancel your account outright or at least drop the coverage.

I'm sure you will be able to search this forum for a couple of stories related to this topic.

...i can't see how a credit card company would absorb the cost of a $25,000 vehicle, they would be losing tons of $$$...

I can't imagine my insurance costing me only $2 a day for a car that's worth $40,000.

I can't imagine my insurance costing me only $2 a day for a car that's worth $40,000.

Why not? That's fundamentally $730/year just for comprehensive and collision to the car itself, which is a lot more than I pay for that portion of insurance on my car with my regular policy.

Throw in the additional facts that 1) most programs are secondary, so in general (as most people have some insurance themselves) they are only covering the deductible, and 2) if there's any CDW of any form, they let themselves off the hook, and 3) most of the people don't even know about the coverage, and you've got quite the money-making endeavour.

Steve

lets say you didn't have any personal insurance to cover a rental car and you totaled a rental car, i can't see how a credit card company would absorb the cost of a $25,000 vehicle, they would be losing tons of $$$, its make perfect sense that you would not be covered on a credit card if you didn't have any personal insurance to cover the rental car first. Share any of your stories about it

Personal experience with AMEX car rental insurance coverage - we dont have primary coverage, they paid the rental car company for damages to rented car. Did not even ask me if I had primary coverage or not.

Incidenatally, the other point to watch out for is that the car rental company will dump additional charges for "loss of use" when the car was in the workshop, as well as "administration charges" for processing the claim etc. AMEX (and I think other credit card insurers) will not pick up the tab for these incidentals unless "substantiated" by the car rental company, and the car rental companies will not send any "proof" of loss of use or administration charges to AMEX, and you will end up having to pay these!

Incidenatally, the other point to watch out for is that the car rental company will dump additional charges for "loss of use" when the car was in the workshop, as well as "administration charges" for processing the claim etc. AMEX (and I think other credit card insurers) will not pick up the tab for these incidentals unless "substantiated" by the car rental company, and the car rental companies will not send any "proof" of loss of use or administration charges to AMEX, and you will end up having to pay these!

You have a right to these calculatons, just as AMEX does, so don't pay, unless they can substantiate these charges. And if they then substantiate these charges, just provide it to AMEX to handle.

I do not have car and therefore no car insurance, got into a small fender-bender with a rental car recently, and MasterCard, as per the terms of its policy, covered the damage to the car, as others here have noted. A few things are worth noting:

1) As SingaporeDon has noted, the rental car company and the credit card will fight over the loss of use and administrative charges. In my case, I wound up settling with the rental car company for less than the actual charges because I wanted to get it over with and didn't feel like fighting. Maybe I let them bully me into it, but after a couple of months of claim forms and phone calls, I wanted it over with and didn't want any unpaid debts hanging over my head (I'm finishing up law school and applying to the bar and didn't want any stuff like that coming up in a background check).

2) Policies differ depending on your card. ALWAYS check with your card company before depending on them for insurance (i.e. before you rent). I'm pretty sure that in most cases it is primary (it was with my Mastercard), but check. Better cards (e.g. "Platinum" types) tend to have better benefits.

3) The credit card company covers insurance for the car YOU rent. It does not cover liability insurance (i.e. if you hit someone or something, insurance for damages to the person or thing). This is mostly not a problem. ALMOST all states require liability insurance, and the rental car agreement will say that if the driver does not have liability insurance, the rental car company provides liability insurance, where required by law, at the amount of the standard policy in the state where the accident occurs (otherwise you would be driving the car illegally). Most of the time, that will be more than enough, but you should make sure that the state where you're driving requires liability insurance (I believe Wisconsin and New Hampshire are the only ones that don't). Also, obviously, if you inflict serious injury or damage in an amount that exceeds the amount of the state's standard liability insurance policy, you will be on the hook for the remainder.

4) Most states require you to have liability insurance, but I believe most don't require you to have insurance for the car you're driving. So, if (a) the insurance provided by your card is only secondary and never primary, and (b) the state you're in does not require you to have insurance for your own car, you will be on the hook as if you paid for the car in cash.

Overall, the most important things, if you're otherwise uninsured, are:'

1) Check with your card company first regarding the extent of the insurance, and
2) Make sure you are not driving in one of the few states without liability insurance. If you are, it's probably worth it to get the liability insurance offered by the rental car company as your credit card will not cover it.

One more thing --

If you rent the car using Priceline, Hotwire, or some entity other than the rental car company itself, confirm with your credit card company that they will cover you in such a case. I did not have a problem in my case, and I used Hotwire, but I've seen anecdotes (I think somewhere else on FlyerTalk) where the credit card companies have tried to claim that in such cases, you're not actually using your card to pay for the rental car (since you're paying for a voucher, which is then used to pay for the car). Again -- wasn't a problem for me at all, but different card companies may have different policies.

It's much simpler just to have a credit card that provides primary coverage. :)

It's much simpler just to have a credit card that provides primary coverage. :)

Yes -- but even those that provide primary coverage don't provide liability insurance, which is something to keep in mind if you're in one of the few states that doesn't require it by law.

They dont issue cars with a base price of over $50,000. Also no jeep trucks or SUVs

Also, premium and expensive sports cars are usually not covered either. Your agreement will have exhaustive list of brands (like BMW, Mercedes-Benz, etc.) and/or specific car models from more "ordinary" brands (like Nissan 350z).

They dont issue cars with a base price of over $50,000. Also no jeep trucks or SUVs

Repeat in English? Seriously though, insurance offered by credit card companies varies as much as insurance in the general market place. Just make sure you read what is and is not covered.

They dont issue cars with a base price of over $50,000. Also no jeep trucks or SUVsRepeat in English? Seriously though, insurance offered by credit card companies varies as much as insurance in the general market place. Just make sure you read what is and is not covered.I think issue = insure

These are some very important issues, and anyone really concerned should seek professional advice from a qualified professional (lawyer or insurance agent -- someone to sue if things go bad for you).

That said, I think the OP is completely wrong on this issue, and agree with the refutations I've read.

Something new to add is that if you have your own car insurance your coverage for the rental car is through your liability policy, since you are liable for damage to other person's property (the agency's car).

Also there is sometimes a "loss of use" claim. Most car insurance (mine at least: State Farm) don't cover loss of use, only actual cost to repair or replace. So whatever the agency says is their lost income while the car is repaired or replaced come out of your pocket.

Finally, if you don't own a car and therefore don't have an auto liability policy, the credit card will cover only the loss to the car but not to anyone injured or killed in the accident (if there is a credit card that covers liability, let me know!). If found liable you could be on the hook for millions. So you may want to purchase personal liability insurance, possibly through renter's insurance or homeowner's insurance, or even the over-priced liablity coverage from the rental company.

Again, check with a professional.

Here's the thing most renters don't know about..

If you have your own insurance that transfers over to rental cars, and have full comprehensive collision; you would be covered in a rental...However, if the fact the vehicle is damaged, you have to have a claim filed through your own insurance if our coverage was declined. The renters personal insurance carrier would have the renter pay out his full deductible to the carrier. As Hertz's car is the repair shop getting fixed there is something called "Loss of Down or Use Time" which simply means this:

When the rental car is being repaired, the contract the renter had with Hertz is extended for the amount of time the car is being repaired. Let's say you rent a car for 2 days at $39/d. You decline Hertz's LDW and something happens to the vehicle. If the rental car goes into the repair shop and takes 9 days to be repaired, you not only paid your deductible, but now have an additional 9 days added on your rental contract. This is valid, as most insurance companies are familiar with this term IF AND ONLY IF you bring it up to them, as they will admit, most of insurance companies DO NOT cover this fee. Hertz can charge this, because we no longer have access to the vehicle that has been damaged when the renter has been assigned to vehicle. It's not scare tactics for rental agents to insist upon LDW, it's just the truth. Ask any Hertz employee when they rent cars, they will always always admit they accept LDW because we all know what happens to rental cars, and the fees that come upon damaged vehicles.

So lets take your example of Hertz hitting me up for nine days at $39 a day.

Lets also say the LDW is $25 a day as it was recently in Atlanta.


Lets also say I've got 50 days rental in the past year (probably have more, but lets keep the math easy)

39 times nine is $351

25 times 50 is $1,250

Unless I have four or five accidents requiring the car to be in the shop for nine days each time a year I'm still wasting money buying the coverage.

This loss of use is part of the scare tactic. It's only valid if my car happens to be the very last car on the lot. If any of those nine days Hertz has cars left to rent, they are not losing any business from the car being in the shop. Bet they will still charge me for the loss of a car that would probably just sit on the lot anyways though.

It's only there because so many people are refusing insurance with credit card coverage or their own auto insurance. Hertz, and the other companies needed to up the ante and get people so scared that if they did back into the parking meter it would cost them fifty thousand dollars by the end of it all to get the car fixed.

Yes, it may be valid should it be needed, but at the same time it's also a huge money maker for the company when it's not needed.

More people would take the coverage if it was more reasonably priced. $25 a day for loss damage, another $13 for liability supplement, and another $5.50 for personal accident insurance, for a total of $43 a day is insane.

$43 times 365 days a year is over $16,000 a year for insurance. It's nothing more then a huge profit center, sold by trying to scare people like is being done in this thread, with things that just aren't true.

So lets take your example of Hertz hitting me up for nine days at $39 a day.

Lets also say the LDW is $25 a day as it was recently in Atlanta.


Lets also say I've got 50 days rental in the past year (probably have more, but lets keep the math easy)

39 times nine is $351

25 times 50 is $1,250

Unless I have four or five accidents requiring the car to be in the shop for nine days each time a year I'm still wasting money buying the coverage.

This loss of use is part of the scare tactic. It's only valid if my car happens to be the very last car on the lot. If any of those nine days Hertz has cars left to rent, they are not losing any business from the car being in the shop. Bet they will still charge me for the loss of a car that would probably just sit on the lot anyways though.

It's only there because so many people are refusing insurance with credit card coverage or their own auto insurance. Hertz, and the other companies needed to up the ante and get people so scared that if they did back into the parking meter it would cost them fifty thousand dollars by the end of it all to get the car fixed.

Yes, it may be valid should it be needed, but at the same time it's also a huge money maker for the company when it's not needed.

More people would take the coverage if it was more reasonably priced. $25 a day for loss damage, another $13 for liability supplement, and another $5.50 for personal accident insurance, for a total of $43 a day is insane.

$43 times 365 days a year is over $16,000 a year for insurance. It's nothing more then a huge profit center, sold by trying to scare people like is being done in this thread, with things that just aren't true.

Excellent point and well taken. The LDW is priced a bit high, which is why I personally recommend it if you're only renting the car for two or three days, because if you're renting it for 3-4 weeks and pay that waiver every day is close to $700 - $750 for the rental. It's a well known point that rental car coverage is the most profitable aspect of rental cars, but in the same factor is a substantial factor to take in consideration if you would be renting especially being out of state nevertheless out of the country. I completely understand why customers would not want to pay an additional $700 for coverage on a vehicle that they feel they already have, however, as stated before, if you are renting for 3 days or so, $75 - $100 for coverage where you don't need to get your insurance company involved is something to think about, especially in highly populated areas. Well taken point though Mike.

It's much simpler just to have a credit card that provides primary coverage. :)

I have never heard of a credit card that provides primary coverage, if anyone knows of any could you please post them? Thanks.

I have never heard of a credit card that provides primary coverage, if anyone knows of any could you please post them? Thanks.

Diners Club provides primary coverage

This loss of use is part of the scare tactic. It's only valid if my car happens to be the very last car on the lot. If any of those nine days Hertz has cars left to rent, they are not losing any business from the car being in the shop. Bet they will still charge me for the loss of a car that would probably just sit on the lot anyways though.

Hertz still has the burden of proof when it comes to these charges. No one should assume that these charges cannot be disputed and usually they are completely overstated.

i find it interesting that when customers of mine decline the LDW/LIS and then wreck the rental car, when i see them renting a car again they always purchase the LDW/LIS.

Stats: wreck a rental car insurance typically increases at least 40 % for minimum 3 years

1000 *0.40= $400 X 3= $1200 I would be out if i wreck the rental car and my insurance decides not to drop me ( 40 % being conservative)

My insurance runs $1000 per year for two cars, i have 3 speeding tickets on file, i wreck the rental car, hmm lets see my insurance drops me chances are pretty good.

I always go rate shopping and the next lowest insurance company is $2,000 per year

$2,000 X 0.40 increase premium for the wreck= 2800 X 3 years = $8400- $3000 that i would of paid =$5400 if i wrecked a rental car yikes

Hertz employees get a discount on the LDW $7/day all car classes except shelby mustang, so when i rented that $60,000 brand new convette convertible i didn't think about twice accepting the LDW,

I always take it, 99 % of hertz employees do too, we know all the fees assoicated with a car rental accident

-your insurance going up
-loss of use fees
-tons of forms to fill out insurance, credit card ,etc
-fighting with your own insurance company
-towing, i always see $400+ towing fees, typical insurance pays up to $50
-admin fees with the claims department
-by the time your through, your so exhausted and tired from it

Stats: wreck a rental car insurance typically increases at least 40 % for minimum 3 years

40% is grossly overstating at least in NY. I pay $750 for full coverage, I had an accident a few years ago, my increase in my rate per year was $169 which is roughly 23%. Increases are not based on your entire premium but on your liability and collision only. It does not affect your other then collision or other riders. So for me, three years is about $500. It would only take 16 days of rentals to equal that, which is about 5 per year. This also doesn't factor that a quite a few insurance companies now have an accident foregiveness program.


-your insurance going up
-loss of use fees
-tons of forms to fill out insurance, credit card ,etc
-fighting with your own insurance company
-towing, i always see $400+ towing fees, typical insurance pays up to $50
-admin fees with the claims department
-by the time your through, your so exhausted and tired from it

Loss of use fees has been discussed to no end...they are negotiable and usually extremely over inflated by the rental company.

Forms, it doesn't matter who your coverage is through, you're going to get tons of paperwork, if you wreck the car, the rental company is going to make you fill out a damage claim. If you get into a personal injury scenario, you're going to need to fill out other forms. You may save yourself one or two by having just one carrier, but it doesn't eliminate the paperwork all together.

Fighting your insurance company should be a moot point if you have a good agent or a good company to work with. My carrier is wonderful even when I've needed to file a claim. I guess your mileage will vary, but I'm guessing the ones who will be fighting will be the rental car company and the insurance company, which is probably why you have this negative opinion because you're on the receiving end.

Towing is included at least in NY, one tow to safety and one tow to the shop of your choice. Most other states are similar in the law, even with just liability coverage. You are confusing roadside assistance/towing coverage that is a rider on a policy with the base line towing that you are guaranteed under your main coverage. The roadside assistance/towing coverage is for really all other needs, like out of gas, mechanical breakdown, etc. This is not covered under your base policy.

Like loss of use admin fees are usually negotiated down or dropped because in the end its part of doing business and its hard to pass those expenses onto another person. If their minor charges, most coverages will just pay them, but if they are high, expect them to be fought tooth and nail.

In the end everyone has to make a choice, and most of the people on this board who rent often, know which choice they choose. The coverage Hertz and other carriers offer is overly expensive and offers a low value for the dollar.

This is getting totally out of hand and the moderators need to step in. This has become a forum of untrue scare tactics by a Hertz Employee to sell insurance, so far removed from factual basis.

My insurance will not go up 40% if I damage a rental car, nor will I be dropped.

Filling out a few forms is still way better then me wasting thousands of dollars on overinflated insurance

You are honestly saying if I'm in an accident with a Hertz car I don't have to fill out any forms at all, just drop the car off and go? Really?

I have AAA to cover the towing, though I very seriously doubt the $400 number is even remotly realistic unless I'm hundreds of miles from where the car needs to be.


You would be much better to practice these scare tactics on unsuspecting tourists at your rental counter, you are pretty much wasting your energy trying to get the experienced people from FlyerTalk to waste hundreds of dollars a week on something so totally overpriced and completly un-needed by most of us.

I have save many $1000's by not taking LDW. Almost enough in the past 27 years to buy a cheaper new car. :)^ I have various credit cards where I am covered and personal auto policy w/$1K deductible.

I have a $1K deductible comp/collison on my personal policy because I only had 2 accidents in 33 years of driving. (one was in 1977 as an inexperienced 19 year old--no claim to insurance as damage to other car was <$20 and the other accident 2 years ago when a lady backed into me at a shopping ctr). With the later accident, I ended up paying half of the deductible ($500) because lady worked in insurance and knew the system well. My insurer got half deductible back from her insurance because they determined it was not my fault. Rest is still under dispute. My rates did not go up. Spending only $500 for 32 years of personal car driving is very cheap. Zero for rental car accidents.

Bottom line: I am decently covered in case of any future accident and if I have to pay something out of pocket for a future accident, I still have saved alot of $$ in the last 33 years. :) As for towing, my wife have 100 mile towing so we are well covered.