“But I’m covered by my credit card, aren’t I?”

You’ve heard this line a thousand times. And if the renter declines your collision/loss damage waiver and ends up damaging the vehicle, you’re probably well aware of the hassle of trying to collect from a credit card insurance program.

“It’s like getting Congress to agree on drilling for oil in Alaska,” complains one operator, whose settlements on two claims stretched out to almost nine months. “They use stall tactics, blame it on the renter and turn over every rock looking for alternate coverage or a way to get out of paying the claim.”

In addition, credit card companies generally limit loss of use but will not allow the operator to pursue the customer for loss of use or diminished value.

How then can you and the customer avoid this sticky situation altogether?

The best solution is for the renter to take your collision/loss damage waiver. The enclosed chart, provided courtesy of Creditcards.com, outlines the specifics of rental car coverage from the major credit card companies. Understanding each card’s limits and exclusions can help your counter reps show the renter the value of CDW/LDW.

In addition, rental operators share their real-world tips on how to educate the customer about insurance issues at the front counter.

[PAGEBREAK] Tips from the Trenches

After inquiring about the full protection package, quite often a customer will quickly respond that their credit card provides insurance for them. However, a lot of times it is obvious from the customer’s tone of voice that they are not 100 percent sure just how much they are covered. We are also frequently asked if we know if their credit card provides them with insurance. This is a great opportunity to present our coverage options. I always recommend our full protection package, especially when their credit card does not provide coverage or if a customer is not sure about their coverage.

If they ask if I know about their credit card coverage I explain that each credit card differs from the next. I explain that reading the fine print will uncover some information their credit card company may not have told them. This includes an exclusion of coverage on certain types of vehicles, exclusions on expensive rentals and the lack of full coverage. Also, benefits are subject to change.

Most renters do not check with their credit card companies to understand their coverage and will begin to lean toward our protection options once these issues are brought to their attention. At this point I explain our full protection package and its benefits, which include peace of mind, no deductible and no increased premiums if an accident happened.

The other type of customer is the frequent business traveler renting on a weekly basis. Typically these customers have done their research and know what their credit cards cover. They typically give a firm no to the full protection package, specifically LDW. At this point I suggest the supplemental liability and emphasize that many card holders at least take this option because they are covered for up to $1 million dollars for any injury or property damage. I emphasize that liability coverage is in general always good to have.
- Scott Roof AVIS, Birmingham, Ala.

I always told the customers that resisted the CDW if they were to get a claim against their auto insurance for a non-owned car the premium they would pay on a future insurance bill would cost them more than CDW today. “What do you say about $40 or $50 now versus surcharges or possible insurance cancellation later?”

When they said their credit card would cover them, I told them it is usually a reimbursement and they would have to wait for payment. They would still have to claim with their insurance company if the accident were their fault. Spending a few dollars now might save you many phone calls, grief and headaches later.
- Andy Batchelor, Midwest Auto, Southern Ill.

As far as overcoming objections, I show renters a photo of a totaled 2007 Nissan Altima valued at $18,000.00. The renter’s insurance company declined to pay, so it left her on the hook to us. I ask renters, does she think the CDW is worth it?

I also explain how a $250.00 windshield could be covered simply by taking the CDW. For anyone renting for less than two weeks it should be a no-brainer, because most people have at least a $250.00 deductible or greater in North Carolina. Also, insurance companies have the right to adjust premiums if the insured has more than three claims within a five-year period. Taking the CDW could save thousands of dollars if there is a claim.

I stress to renters that they are not only responsible for damage they cause, but also for any damage the world could cause our vehicle until it is returned to us.
- John Leadingham, Carolina RAC, Charlotte, N.C.

When offering the damage waiver, we stress that if they decline it, they are fully responsible for any and all damage, regardless of negligence, including theft and vandalism.

When customers say that they have credit card coverage, we ask if they have checked the details of the coverage as there are exclusions not only with the type of vehicle rented, but also with the length of the rental. We have local renters that will be out for more than 30 days at a time.
- Sherrie Coleman. Allstate Auto Rentals, Owings Mills, Md.

Once a customer says they are fully covered the agent’s response should be that the coverage we offer is not insurance but a “waiver of financial responsibility” for damages to the rental vehicle and any associated expenses. Benefits for accepting LDW/CDW include not reporting to the customer’s insurance company, no premiums to pay, no deductibles and coverage above and beyond what some insurance companies or credit cards offer.

Our agents are taught to believe in the product so they can assist the customer to understand the benefits of accepting the coverage.
- Steve Badilla, Budget Rental & Sales, Las Vegas, Nev.