How rental car companies undermine credit card insurance

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Imagine that you crashed your rental car, and—thankfully—no one was injured. The repair bill may be picked up by an insurer. But you may be stuck with paying "administrative fees" that the rental car company charges, which can total hundreds of dollars.

As we noted in our recent article "How to Survive 10 Travel Emergencies," if you had declined collision damage waiver (CDW) insurance coverage when reserving your vehicle, your auto insurance policy should cover damages.

Alternately, if you declined rental coverage and don't have auto insurance, you may expect your credit card to pay for the damage to the vehicle. All Visa cards come with rental car collision and theft protection if you use them to pay your rental in full (and assuming that you follow common sense rules). Mastercard and American Express provide the same coverage to select customers.

But there's a wrinkle: Neither your auto insurance nor your credit card coverage will reimburse you for "administrative fees," such as a "loss-of-use" fee and a "diminished value fee," which may add $600 to $1,000 to the typical repair bill.

According to, Visa, American Express and MasterCard will only pay the fees

"if they can get 'fleet utilization logs' from the rental company showing it didn't have other cars available to replace the damaged one. They say they shouldn't have to pay the fee if the rental agency isn't suffering any loss from not having the car on the lot."

So if your rental car company sends you a bill for unpaid administrative fees, don't pay it until you speak with your credit card company. Insist that your credit card company receive the documentation it needs from the car rental agency to process the claim. You'll likely be referred to a third-party agency, not a staff member of your credit card issuer, and you may have be persistent to defend yourself.

Another tip: Be sure to file your paperwork right away. Many credit card companies put a time limit on turning in your paperwork, usually capped at 45 days from the accident. Rental car companies may delay sending you the invoice and other paperwork until after that period has passed, so be assertive in contacting the national franchise you rented from and asking them to send the bill immediately. Or else you may be stuck with the tab.


How to survive 10 travel emergencies

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