Rental Car Runaround

Michael Flack

IF YOU’VE EVER RENTED a car, you’ll inevitability have heard the collision damage waiver (CDW) sales pitch. It sounds something like this: “I assume you want us to protect you bumper to bumper on the car, right?”

If you say, “yes, please,” then—for anywhere between $10 and $30 a day—the rental car will be covered for losses due to theft or damage, except for damage to certain portions of the car. Hint: Read the fine print. If you say, “no, thank you,” you need to be prepared to take on the risk yourself.

I don’t buy the CDW from car rental companies. I’ve studied the issue extensively, and I feel adequately covered by my auto insurance and by the auto rental collision damage waiver offered by the credit card I use to rent the car. You need to review all of this yourself to determine what’s best for you.

Auto rental CDW is a benefit offered by almost all credit cards. The benefit provides reimbursement, subject to the terms and conditions detailed in each card’s benefits guide, for damage due to theft or damage up to the actual cash value of most rental vehicles. Prior to renting a car, you should review the benefits guide for your credit card.

What happens if you file an auto rental CDW claim with your credit card company for damage to a rental car? I’ve checked the internet and I can’t find a single actual example of someone making a claim. So….

Prior to COVID-19, I rented a car in Edinburgh, Scotland, from Hertz using my USAA Visa credit card. I declined the auto rental CDW offered at the rental counter. Two days later, while driving entirely too fast on the Isle of Skye in an effort to reach Coruisk House before sundown, I clipped the only section of curb on the isle, resulting in a puncture to the sidewall of my left rear tire. I drove on the spare uneventfully but slowly for the balance of the trip.

When I returned the car to Hertz, I mentioned the flat tire. The attendant filled out a form describing the damage. She provided me with a hardcopy. I took a photo of it and the tire. Subsequently, Hertz charged my credit card $160 to cover the “tyre” damage.

When I returned to the U.S., I called USAA and—after numerous phone transfers—initiated an auto rental CDW claim. It was all pretty straightforward. USAA sent me an email with my claim number in the subject line. I then replied to the email with all relevant documents: contract, damage form, photos of the damage, credit card statement and so on. As it’s easy to leave your rental car contract in the car when you return it, be sure to photograph it as soon as you receive it at the rental car counter.

About two weeks later, I was contacted by a USAA representative, who was following up on my claim. The conversation was a little odd. He asked if I had purchased the CDW from Hertz, to which I replied, “No, because I was relying on the auto rental CDW insurance via my USAA Visa credit card.” He offered that, “I always get the CDW from the rental car company myself. Call me a belt-and-suspenders kind of guy.” He then asked if I still wanted to make a claim, to which I replied with a measured, “Yes… I do.”

Subsequently, USAA informed me that it was waiting on documentation from Hertz that detailed the cost of the tire repair. While that seemed reasonable, I asked USAA why Hertz would be in a rush to provide such documentation and was met with silence. After waiting for resolution for more than a month, I decided to take matters into my own hands. As my father once said, “If you want something done right….” I contacted USAA to dispute the Hertz credit card charge for $160. I asked that Hertz provide documentation that detailed the cost of the tire repair.

About a month later, USAA informed me that my credit card dispute was resolved in my favor for the full $160. A few weeks after that, USAA informed me that my auto rental CDW claim was resolved in my favor—but this time for a lesser amount, $120. USAA couldn’t give me the full $160 for some reason or another. I’m not sure exactly why and I didn’t want to push it.

Planning to rent a car? Keep these three additional points in mind:

  1. Normally, credit card auto rental CDW insurance is secondary to your auto insurance policy. Since my auto insurance policy does not provide overseas coverage—and neither does yours—my credit card auto rental CDW became the primary.
  2. Prior to relying on your credit card for auto rental CDW insurance, read the fine print to fully understand what is and isn’t covered. Some credit cards do not provide coverage in Ireland, Jamaica or Israel. Some provide coverage for 15 days and others for 31 days. Almost all do not provide coverage for pickup trucks, vans and other high-end vehicles.
  3. Your auto insurance should provide you liability insurance for your rental car in the U.S., though you should confirm this. If you don’t currently own a car, you may want to ask your insurance company about rental car liability insurance.

Michael Flack blogs at He’s a former naval officer and 20-year veteran of the oil and gas industry. Now retired, Mike enjoys traveling, blogging and spreadsheets. Check out his earlier articles.

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