OK, I should have known better. That said -- here is the story.

We booked a package with Hapuna Prince Hotel that included car. I was given a special code to use when I booked the car rental with Avis. The package provided at credit for a specific sum of money towards the car. If we choose an intermediate sized car, we would end up only owing taxes and fees; if we wanted to upgrade we could choose to do so and simply pay balance. I booked the reservation online at Avis.com and entered the code. I got a confirmation with TOTAL costs [rental, fees etc]. No credit card was required at the time of making reservation.

We declined CDW when we picked up our car in Kona in October. We gave them our Mastercard when we picked up the car. WE used our Mastercard to pay the fees when we turned in the car.

In between picking up the car and returning it, we had a close encounter with what I believe is called a "lava toe" at VNP. DH was backing up to exit parking space at end of Chain of Craters road and scrapped the bumper.

When we got back to the Prince, we went to the Avis desk there and reported the damage and filled out a report.

When we turned in the car at Kona airport, we gave a copy of the report to Avis checkin person.

We were under the belief that Mastercard would pay for this damage under their MasterRental insurance program.

I submitted all the required paperwork and have now been notified by Mastercard that they are declining payment because we did not "use the card to initiate and pay for the entire rental agreement/contract {tax, gas, and airport fees are not considered rental charges] with your mastercard."

I have been protesting this denial for over 4 months now -- I keep sending MC more documents to show that I did use the card to reserve, and pay for car as part of the package, but I am sure I won't get anywhere. I even submitted paperwork from Hapuna Prince Hotel showing that the invoice to AVIS was paid [as MC requested} and the exact daily rate that we were paying.

So -- the lesson to be learned here -- if you get a car as part of a package deal, it appears your credit card will not cover damages should you decline CDW.

There are lots of other conditions that invalidate the insurance [like having car for more than 15 consecutive days; rental vehicles must have msrp of $50,000 or less etc etc.]Better check these out before you falsely believe that your credit card will protect you.

I know that I can report this to my car insurance [USAA] BUT we have a $500 deductible on our cars for collision and I really hate to report anything to them...for fear of them hiking our premiums. I just talked to them and they said that the rental is treated just like your personal car, so deductibles are same.

The scrapes were not all that bad, but by the time they included loss of use, administrative fees it totaled almost $700. I don't think it is worth having insurance pay the $200 above deductible and risk raising rates. This amount includes admin costs and loss of use costs.

I am thinking of following this line of reasoning with Mastercard. We did in fact use the same mastercard to pay for the package at the Hapuna Prince and will pursue that as argument that I did in fact use my card to pay for everything. I should have known that "free" benefits/coverage is "you get what you pay for" and that they will do everything possible not to pay out, but I will try to reason with them.

It appears that MC is doing everything NOT to pay; to deny and drag this out hoping I will just pay AVIS. I recently got a letter from AVIS saying that we owe this money as credit card company hasn't paid. To AVIS' credit, this is only the second bill from them; the first being the original one.

And as far as using MC when making car rental reservation [which is one of the requirements for their covering claim; as it was stated above... you do not need a card to make a reservation so that seems like it would be an automatic out for the CC company.