Do you need car-rental insurance? Evaluate coverage each time

By Bruce Mohl, Globe Staff, 02/03/02

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One of the things I most dislike about traveling is renting a car and hearing the agent say: "Are you sure you don't want the insurance coverage?"

It's one of those questions to which I think I know the answer, but I'm never sure. At anywhere from $9 to $25 a day, I know the insurance offered by rental car companies is outrageously expensive. But can I run the risk of renting a car without it?

"Even I've gotten confused," said Victor Fanikos, an assistant general counsel with the Massachusetts Division of Insurance. "The key is to do your homework before you get to the counter."

The first step is knowing what type of insurance coverage you have on your car at home, since it usually transfers to the rental car. In Massachusetts, Fanikos said, personal car insurance transfers to cars rented in the United States and Canada, but not abroad.

Most policies include liability insurance, which protects you financially in case you hit and injure someone else. Make sure you also have personal coverage and health insurance sufficient to cover injuries to yourself and others traveling with you.

The comprehensive and collision coverages of your policy are what you need to study most closely. These coverages protect you when your car is damaged or stolen. Some drivers with older, less valuable cars don't opt for these coverages at all. Some buy it, but with a $1,000 deductible. The question to keep in mind is whether the coverage you have on your own car is adequate when renting a relatively new car worth $15,000 to $20,000.

If your own auto insurance is inadequate, find out what coverage is provided by the credit card you use to rent the car. Coverage varies quite dramatically between credit cards, so don't automatically assume anything just because the card is gold, platinum, or titanium.

I learned this lesson the hard way. I have an American Express platinum card that is affiliated with a major retailer. I assumed, since it was platinum, that it would offer top-notch protection. But, in the course of writing this story, I called American Express and was shocked to discover that no coverage at all was offered with the card.

Most credit card coverage is secondary to your personal comprehensive and collision coverage, meaning it fills in where your own coverage leaves off. It typically covers deductibles and "loss of use" fees that rental car companies charge when one of their vehicles is involved in an accident and not earning money while it's being repaired.

Some questions to ask your credit card company include how long the coverage lasts (Visa is 15 consecutive days in the United States and 31 abroad, while MasterCard is 15 in the United States only); how high it goes (MasterCard's upper limit is $50,000, while Visa covers the actual cash value of the vehicle); which vehicles are covered (many cards don't cover expensive SUVs or trucks); and when it is voided (in certain countries, when driving off-road, or when damage is caused by hail or fire).

If you decide to purchase insurance from your rental car company, it pays to read the fine print. Enterprise Rent a Car, for example, offers a collision damage waiver that may not cover theft in every state, and a lawsuit filed recently against the company alleges the waiver may be virtually worthless in Massachusetts.

The Boston law firm of Grant and Roddy has filed a class action lawsuit against Enterprise, alleging that the company's collision damage waiver is voided if the customer uses the vehicle in an "imprudent manner" or "in violation of any law, ordinance, or regulation." The lawsuit contends the language gives Enterprise enough room to wiggle out of virtually any claim, but an Enterprise spokeswoman said the company is in compliance with Massachusetts law.

hdbriefTaxes included?

if12State Representative Daniel Bosley, a Democrat from North Adams, has a tale of caution for anyone forced to cancel a hotel reservation at the last minute.

He had booked a room at the Washington Hilton for a December conference on telecommunications, but was forced to cancel the reservation when the Legislature remained in session to take up some of Acting Governor Jane Swift's vetoes. When he received his American Express bill, Bosley discovered two room charges, one for $125 and the other for $11.50.

Bosley had canceled two days before his arrival date, but a call to the Hilton revealed that the hotel chain has a 72-hour cancellation policy; any room canceled later than that incurs a one-night charge. He learned there were two charges on his bill because Hilton initially had undercharged him, so they added the $11.50 to bring his bill to the correct total of $136.50.

Just as Bosley was about to hang up, he told the Hilton representative that he thought the room charge had been less than $136.50. She said he was correct. With taxes included, the total came to $136.50, she said.

"You can't charge me tax when I didn't really stay there," he remembers saying. The service representative said that was company policy.

Bosley asked to talk to a supervisor and ultimately got the charge removed from his bill, but he's convinced it was no mistake.

"I bet you they all do it," he said.

Bruce Mohl's e-mail address is mohl@globe.com.