Car rental insurance glitch

I rented a car in Australia, Oct. 17-29, 2007, where I had a minor accident. The car was parked legally and I wasn’t in it when it was sideswiped.

I had paid US$864 for the car rental, which was from Europcar at the Sydney airport.

I filed a claim with Diners Club, invoking the insurance benefits that come with that credit card. However, my claim was denied even though I had declined the rental company’s collision-damage waiver and done everything else I knew I needed to do to qualify for the insurance.

The reason? According to Diners Club, in Australia and several other countries some car rental companies in some locations build into the basic rental rate some collision-damage coverage.

According to Diners Club, you probably won’t be told about this at the time of rental (I wasn’t), nor can you decline it. But because that gives you some coverage, it invalidates any coverage you may have from your credit card company.

The Diners Club representative said that the only way I could have found out in advance if there were such a provision in my rental contract was to have phoned the office in Australia where I intended to pick up the car.

You also may encounter this problem in Ireland, Israel, Italy, Jamaica and New Zealand. My credit card “guide to benefits” mentions that cardholders “may be unable to receive benefits” in these countries, but it doesn’t explain why.

Furthermore, as it was explained to me by Diners Club, you can’t simply phone your credit card company in advance to find out if your coverage will be valid in one of these countries because it may vary from company to company and from one rental location to another.

The best I can recommend is that, before leaving the U.S., you phone your credit card company and ask if there are any special situations like this in the country where you will be renting a car. If there are, then ask what you should do to avoid having your insurance coverage invalidated, as mine was.

Also, make the best effort you can to find out about the policy of the car rental company you intend to use. You may need to rent with a different company or rent at a different location or swallow hard and pay for the additional coverage that the rental company will offer you. (I don’t know what the CDW would have cost me.)

When I returned the car at the Sydney airport, Europcar insisted on charging me US$3,022, which I gather was the maximum they could recover from me. They assured me that when the repair was completed, they would reimburse my credit card account for the difference between the $3,022 and what the repairs actually cost.

To their credit, that’s what they did, so the total cost to me was only $436. This was the amount that Diners Club wouldn’t or couldn’t reimburse because I had unknowingly received some collision-damage coverage as an integral part of my rental charge.

To this day, I don’t know exactly what coverage I received without being aware of it and how that affected how much I ultimately had to pay for the repairs.

STAN BACH

Washington, D.C.