Top reasons your free credit card travel insurance could be denied

Common knock-back 1: “Oh, you actually think you can claim on that?”

I’m starting with the “automatic” insurance often offered domestically that reimburses nose-bleed car hire excesses (and saves you buying the rental company’s extortionate insurance) … if it’s worth the paper it’s fine-printed on.  more…..

Car rental insurance better than credit cards

Growth of New Insurance Category in Australia

GivingSeedling (1)
Over the last 4 years there has been the sprouting of a new category in Australia in the car insurance – car rental industry, that of car rental excess insurance.

Initiated  by Des and Steve Sherlock of Tripcover, at the start of 2012, it now includes some 5 players in the Australian market. They inlcude:

  1. Tripcover – Car Rental Excess Insurance
  2. Allianz Rental Vehicle Excess Cover
  3. Hiccup
  4. Rental Cover
  5. Car Trawler

This category has the potential to eat into the large profits that the car rental companies have been enjoying for decades. What is different about this category is that unlike using
travel insurance or credit cards to hope you are covered for what you think you should be covered for, this car rental excess insurance is designed specifically for  competing head to head with the car rental companies.

The main difference between the insurance product and the car rental companys’ product, is that in the event of an accident you would need to claim with the insurers such as Allianz Global Assistance, QBE, whereas if you use the more expensive car rental companies waiver (CDW) they handle any damage issues.

And by expensive we mean very expensive. The car rental companies waiver can cost as much if not more than the rental per day with the car rental excess insurance supplied by Tripcover coming in as low as $5.60 per day.

The category has seen amazing growth over the last 4 years with estimates that some
$12M in sales in the last financial year, from these companies. This represents about 200,000 policies sold out of 6.5M rentals in Australia per year or around of 3% of the market so far.

It is predicted that by 2020 the car rental excess insurance market in Australia will be 10% of the car rental market, worth $38M.

Another Kangaroo Review….

Australia Northern Territory outback Kangaroo road sign
5 out of 5, reviewed on Nov 02, 2015
http://www.productreview.com.au/r/tripcover/830125.html
Though we only went to Darwin for 11-days, I thought not to take a chance of taking extra insurance that is reasonable and affordable. I must admit I had apprehension in taking insurance. Often I heard dodgy stories but after searching online review, Tripcover appeared on the toplist and opted to take insurance through them. We hired a car through Thrifty but unfortunately our car was hit by kanga roo on our way to Katherine Gorge and damaged and split the front skirt. Upon our return, I rang Tripcover and reported the incident. Immediately they sent me the Claim # and all the requirements. I submitted all the official and necessary documents to expedite my claim. Within 5-working days, I was refunded all the expense I incurred. Tripcover has kept to its standard of honesty and integrity….I’ll definitely make another transaction again with them in our future trip and would highly recommend. Thanks to all Tripcover staff as each of those I talked to, were very helpful…”

Clarifying Your Car Rental Insurance Choices

Loss Adjuster Inspecting Car Involved In Accident
When renting a car in Australia or New Zealand, it is very important to have quality car rental excess insurance coverage for the vehicle. You have several options available, and by comparing and contrasting the different types of insurance, you can have a better idea of what you might need.

Credit Card
Many times, the credit cards you already have in your wallet will actually have collision coverage included on them. If you choose the right credit card to pay for the rental, you could actually receive coverage with zero deductible, or at least a very low deductible. This is quite different from the high cost of insurance through the car rental companies. The right card has the potential to provide coverage for the costs for which you might be liable, such as damage to the car, or even a theft but a lot of times does not cover the general exclusions such as windscreen, tyres, single vehicle accidents or undercarriage damage.

Another issue is that some that use this method of coverage for their rental vehicles have is that it can be a hassle to deal with the credit card companies. Still, given the amount that you could possibly save in the event of an accident, it does make sense at least to consider utilizing credit card coverage for the rental.

Make sure that your credit card company offers this type of coverage, as some do and some do not. Look through the policies regarding the coverage it offers, and make sure it is applicable in Australia or New Zealand – or any country you might be visiting for that matter.

Standard Travel Insurance
In some cases, you may also have collision coverage available through your travel company. If you buy a travel insurance policy for your vacation through many companies in Australia and New Zealand, you will have the option of adding on insurance for your car rentals. However, it is important to make sure that the travel insurance policy that you are considering using actually cover all the normal exclusions that the car rental companies exclude, such as windscreens and single vehicle accidents.

Dedicated Car Rental Excess Insurance
Of course, there’s always the option of buying your car rental excess cover (usually called CDW or Collision Damage Waiver) from the car rental company. This is something they will actually encourage you to do. It’s a simple solution since you can do it right at the counter. However, that does not necessarily mean it is the best solution. The cost of the insurance through the company is expensive, and could be close to the cost of the rental itself, which could double your overall expenditure. When you buy insurance through the rental company, you should not think that it will automatically cover the entire cost of damage or theft. Look at what your excess or deductible will be. It can be in the thousands in many cases. Car rental companies will sometimes offer an additional form of coverage that will drop the deductible to zero. Of course, this adds to the cost of your rental substantially.

Dedicated car rental excess cover is also offered now by such companies as Tripcover and this can be less than half the cost of the car rental companies’ rates.
However there is also the hassle of making a claim with their insurance provider Allianz Global Assistance in the event of an accident.

Take the time to research all of your options for your car rental insurance, and then choose the one that makes the best financial sense for you.

Resources:
https://www.ricksteves.com/travel-tips/transportation/car-rental-cdw
http://www.tripadvisor.com.au/ShowTopic-g255103-i531-k5982489-Car_rental_excess_reduction_Tripcover-Perth_Greater_Perth_Western_Australia.html

 

 

ANZ Car Rental Cover – leaves you exposed to excess risk

Many people use their credit cards to cover their rental car excess. Renters assume that they are fully covered, but are they really?

Let’s have a closer look at ANZ’s actual car rental cover policy, which a Tripcover customer brought to our attention, asking if they should still take out a Tripcover policy or use the ANZ rental car coverage.

ANZ car rental cover policy

What’s covered and what not by ANZ credit cards?

Here’s the thing, most of the large car rental companies, such as Thrifty, have what they describe as a “standard excess”. This excess covers basic damage to the car if it involved in a multi car accident or is stolen, for example. Though there are a number of items not included in the standard excess, and that’s the loophole in credit card travel insurance.

Hence it becomes a problem for anyone who is relying on their ANZ credit card insurance (or other credit cards aswell) because items such as windscreens, tyre damage, undercarriage damage are not considered to actually be part of the excess.

On top of that, most rental firms in Australia have an excess amount between $3500 and $4000. The ANZ car rental cover falls short by nearly $2000.

car rental excess coverage amount

ANZ only covers $2050 excess.

The above screen grab from the ANZ Car Rental Cover terms and conditions, shows the maximum excess insured is just $2400, minus the applicable policy excess, leaves the rental customer will only $2050 maximum coverage. So if the rental car excess is $4000, then there is a gap of $1950 to pay. Ouch!

Credit card car rental insurance leaves you exposed

Single Vehicle Accidents are not covered by ANZ

In the above screen grab from ANZ’s terms and conditions, you will notice two things. Firstly that the coverage only includes items covered under the collision excess, and as mentioned earlier there are multiple items that rental companies do not include in their excess, but still charge you for, like windscreen and tyre damage etc.

Secondly you’ll notice that Single Vehicle accidents aren’t covered by the ANZ policy, which effectively means, if you damage the car in a car park against a static item or you hit a kangaroo on the open road, you wont be covered because there is only one vehicle involved in the accident, namely you!

As we previously wrote in our blog post about the pros and cons of car rental insurance via credit cards, there are benefits to using credit cards, especially if you choose the right credit card to pay for the rental, you could actually receive coverage with zero deductible. That being said, its worth looking into the detail, as we have done here with ANZ, to really understand what level of coverage you do have, as opposed to assuming you’re covered, and then being surprised when there is a sizable gap in the coverage.