Credit Card Rental Car Insurance Coverage Gaps

I said I have a weak point for sob stories because I keep getting drawn to them. Someone on Twitter led me to this story on

Don’t automatically refuse extra rental car insurance coverage

Kim rented a car from Alamo. She paid with her Discover card. Kim damaged the rental car when she backed it into a pole. Alamo charged her $4,000. Discover paid $3,000 because the card’s rental car insurance doesn’t cover the loss-of-use charges and administrative fees Alamo tacked on.

Now Kim is mad at Discover for not covering her in full.

Don’t they say “don’t look a gift horse in the mouth”? The rental car insurance from the credit card is free. She got $3,000 out of it already. For all we know, the $1,000 loss-of-use and administrative charges may be completely bogus. She should ask Alamo to prove to her there had been loss of use and that she agreed to the administrative charges in the rental agreement.

I don’t understand why Kim doesn’t blame herself for damaging the rental car or blame Alamo for tacking on undisclosed and unsubstantiated charges, but instead she blames Discover, who paid $3,000 on her behalf. Because everybody knows credit card companies are evil? If they are evil, don’t use them!

Knowing that there may be some gaps in a credit card’s rental car insurance, would I still rely on my credit card for rental car coverage? Yes, absolutely. Paying the rental car company’s CDW at $15 per day is crazy. If my auto insurance charges me at that rate I’d be paying $5,500 per car per year.

I’m going to do exactly the opposite of what the title of that article suggested. I will still automatically refuse extra rental car insurance coverage.

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  1. schmoe says

    It depends on how common it is for rental car companies to charge loss-of-use charges and administrative fees. If this is standard policy across all rental car companies, than I would expect my credit card company to disclose that their insurance policy does not include the standard fees, and I would drop the credit card company immediately afterwards.

  2. schmoe says

    I may have missed it because I haven’t had my first cup of caffeine, but in the VISA link that Sammy_M provided, under the ‘What is not covered’ clauses, I didn’t see loss of use. If loss of use and administrative charges are standard across all rental car companies, than I would expect the VISA link to mention it. It may not be standard, who knows.

    Additionally, a consumer who doesn’t even know about loss of use charges would not know to look for it in the Visa statement.

  3. Harry Sit says

    schmoe – Under “what is covered” it says “Valid loss-of-use charges imposed and substantiated by the auto rental company through a fleet utilization log.” The keywords are “valid” and “substantiated.” If the rental car company just throws in some loss of use charges without substantiation, I agree Visa shouldn’t cover it and the consumer shouldn’t pay it either.

  4. Sammy_M says

    Take a look at Discover’s terms:

    “What is not covered…
    Loss of use of the rental automobile”

    The ‘fine print’ tells all. We should take the time to read it.

  5. Iain says

    This has been going on a long time i.e. being charged for “Loss Of Use” and most people only find out about it after they have had an accident. The reason being – they do not read all the fine print *that it is why it is fine! Another big concern is the medical coverage which should also be read. Usually you are lucky if it will cover $5,000 which is about the cost of one person being admitted to emergency before any major operation etc. This can be worse if traveling out of the country as your medical may not cover the costs. Read the print – that is why it is there – to cover the company not YOU.

  6. Harry Sit says

    @anon – It pays your deductible if your regular car insurance covers collision and comprehensive. It pays for the damage if your regular car insurance has only liability coverage.

  7. C Gajowski says

    came to this a bit after the fact. Good Grief – i upped my deductible to $1000 to cut insurance costs — and she did the damage herself, yet has it paid for/ Good deal. I will try to remember to look for this particular small print about loss of use … and I also would not do the CDW without some extreme fear of being locked away in a foreign jail….

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