Rental Car Insurance Offered On All Visa Cards
By Michael Ha
NU Online News Service, March 2, 4:00 p.m. EST?Visa U.S.A., part of credit-card giant Visa International, said it is extending its auto rental insurance program to all of its Visa consumer credit cardholders, a benefit previously reserved only for select Visa cards.[@@]
"We do have an underwriter for the program, obviously, that provides the benefit. For competitive reasons, we don't disclose who it is or what our pricing arrangement is," said Kenny Thomas, a spokesman for Visa U.S.A. "But we do collectively manage the benefit for our issuing banks that issue our credit cards. It is a centrally managed program to Visa so that we can negotiate for terms on behalf of all of our issuers."
Mr. Thomas explained that the insurance covers the entire cost of the rented vehicle. "It really covers just about any type of loss?collision, theft, damage to the car that would normally be covered under a comprehensive type of auto insurance policy," he said.
He stressed that the coverage is not liability insurance. "It's just what is called a collision damage waiver, meaning it covers the cost of the vehicle. It is also secondary to your own auto policy?if you have auto insurance, typically that insurance extends to rental cars. So what that means is your own auto insurance applies first and this would apply second," according to Mr. Thomas.
He added that one important thing to know is that on international rentals, rental insurance typically becomes the primary insurance, because usually the auto insurance of the cardholders will not apply to car rentals outside the United States.
To qualify for the coverage, consumers must pay for their rental car with their Visa card and also decline the rental car company's collision damage coverage. There is no cost to the cardholders to take advantage of the benefit.
Auto rental insurance is currently one of the most popular credit card benefits among cardholders. Mr. Thomas said that Visa's competitors?namely American Express and Master Card?also provide the benefit, but only on a select basis.
Al Banisch, senior vice president of consumer credit products at Visa U.S.A., added that as a result of these changes, an additional 75 million Visa cardholders, and more than 185 million in total, will be eligible to use Visa's auto rental insurance.
Visa U.S.A. said it estimates that cardholders who utilize this auto-rental insurance benefit will save more than $10 per day on average, when compared with paying for the same type of coverage provided by car rental companies.
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