It's okay, my credit card has coverage: a foray into credit card rental car insurance

Rental cars are often an integral part of travel, and the ol' insurance waiver salesmanship is one that rental car agencies seem to stress pretty hard.  We (almost) never get the rental car insurance because we believe that our credit card will cover any damages.  But will they?  What follows is my recent experience with a rental car insurance claim and some notes on what I learned.  

Spoiler alert: that wasn't so bad, after all!

If you've been following this blog, you know we took the Nissan Armageddon on some crazy back roads.  Well, while we were driving down one of the National Forest roads (not even one of the wild ones), a limb from a fallen tree scraped the side of the car.  The car was so filthy that we didn't even notice it until we washed the car just before returning it.  I thought it would buff out and crossed my fingers that I wouldn't hear anything about it.

The most obvious scratch in the picture was on the front door, just behind the wheel well, but there were 2-3 other scratches that don't show in this picture.

Several weeks went by and the charge for the rental had gone through on my credit card.  I hadn't heard a thing, so thought I was in the clear.  Then I got a call out of the blue from a firm that handles Hertz's claims.  The damages were just over $700, but the surprise was that the added "loss of use" and administrative fees brought the total claim up another $500.  The collector at the claim company had actually given me a break on the "loss of use" because it was originally more than the damages.  I was grateful for that.  She explained to me that I had 30 days, so to take my time researching my options with my credit card and auto insurance.

I will add here that it is important to note that many credit cards and possibly auto insurance companies require that you report the incident within a certain timeframe.  I think that mine were about 60 or 90 days, but some are shorter.  If I hadn't filed a claim within that window of the incident, not the contact with the collector, then I would have been burdened with the costs.

When I called my Master Card support line, they were mostly useless, simply directing me on how to make a claim, but not able at all to explain how it works or how I might find out.  As I researched online, reading forums and blogs, I learned that most credit card rental car coverages are not primary.  What that means is that they will cover the full claim if you do not have insurance.  So if you don't own a car, they'll take care of it.  That's pretty cool.  But if you have auto insurance, the claim has to go through your auto insurance and then the credit card covers whatever the auto insurance won't, essentially taking care of the deductible ($1000 for me).  I don't hold any of the elite cards that have primary coverage, and finally uncovered that my coverage was secondary.  I'd have to file with State Farm in addition to the credit card company.

Before I did that, I wanted to know if it was going to be worth it to file a claim.  You always here that if you file a claim with your car insurance company that your rates will shoot up.  There's also adds preaching accident forgiveness recently.  So what would happen?

I tried searching the internet, but there are too many variables involved to compare my claim to any other specific experience.  Maybe the other person had a different plan, different history, or different damages.  I eventually decided to go to the source.  I called my local State Farm agent and asked them about a hypothetical claim.  After speaking with a few different departments (one handles claims, one handles rates), they gave me the best info that they could based on the lack of details and a hypothetical claim.  Here were the options:

• File a claim on Laura's car, which would fall under the 8-year accident forgiveness for her car.  We would see no change in premium.  But, if we filed a second claim anytime soon, the first claim would pop back up and we'd get a double whammy, losing her 25% safe driver discount and having the premiums impacted by both claims at once.
• File a claim on my truck, which has a 15% safe driver discount and no accident forgiveness.  In this case, we'd lose the discount that only amounts to about $100 per year.
• Don't file a claim, pay the ~$1200.

We chose to file a claim on my truck's policy.  At $100 per year, it would take 12 years to pay back the $1200, and that's not factoring for the restoration of safe driving discounts after a few years without incident.

Filing with the Master Card was pretty straightforward; I went to mycardbenefits.com and followed the logical steps.  The claim required lots of detailed information including the claim from the rental company, my rental agreement and receipt, any police reports, my account of the incident, my insurance info, a credit card statement showing that I had been billed on that card, etc.  It was not easy, but it was mostly straightforward.  I will note that I read warnings on some blogs suggesting that it's important to keep up with the claim because it's not in the credit card company's interest to hunt you down for a missing document.  If you fail to ensure that they have everything they need for the claim, it may expire, and it will be on you.

I sent the claims from the Master Card and State Farm to the rental collector.  A couple of days later, I got a call from State Farm explaining that they would not be paying out for the claim because my policy doesn't cover loss of use or administrative fees.  But, on the bright side, they have an agreement with Hertz that their customers will not be charged those fees either.  So, the total claim fell below my deductible and they closed it with $0 paid.  They clarified that even though they had a record of an incident, the fact that they didn't pay it out and because it was not an accident involving a police report or injuries meant that it wouldn't go against me and I would keep my safe driving discount.  Sweet!

A few days later, I checked the Master Card claims site to make sure that they received all necessary paperwork and was pleasantly surprised to see that they had already paid it out to the collector.  They actually paid for the damages and also some of the fees over the $1000 mark.  I don't know why the fees were still assessed, but that's not for me to worry about. 

So, all in all, this worked out well.  I spent some time on the phone and on the web, trying to research my options and make the best decision, and it seems to have paid off.  I saved ~$1200 without any major drama or hassle.

Disclaimer: I am not stating that what worked for me will work for you.  What I suggest is that you do your research, including talking with your local insurance agent, before taking action.  That way you won't be too surprised by the outcome.