25 SEP 2017: I happened to walk past the back door of a rental car office at the airport in Jacksonville FL recently. The door was open and I could see inside, and what dominated the room was a huge whiteboard featuring a table setting out which employees had sold the most add-ons; add-ons like insurance, like upgrades, like prepaid fuel, a GPS, or pre-paid tolls. “Or similar” to quote the rental car industry’s own language.

Those add-ons can represent a whole lot of extra revenue in a highly competitive market. And when it comes to insurance the desk agents can be more-than-somewhat aggressive and fear-mongering when you’re signing the rental car contract, and initialing here … here … and here.

Let’s face it – one’s options should be relatively simple when it comes to rental car insurance for the client:

(i) buy the rental car company’s insurance (which is almost always very pricey),
(ii) go with a policy offered through your agency, or
(iii) go with insurance offered by the client’s credit card.

(There’s sometimes a fourth option – some personal umbrella policies cover one’s home, property and personal car, and that policy covers rental cars as well.)

But I came across two incidents recently that few of us ever consider, and that could leave your client seriously out of pocket.

The first happened to an agency-owner I know – he took his family to Boston. He reserved an SUV, and relied on his super-duper-kryptonite credit card for insurance. While driving on the highway he hit one of those orange rubber road-cones, which left an ugly dent in the bodywork.

“No problem” he thought “I have super-duper-kryptonite insurance through my credit card”

And indeed the credit card company paid for the damage to be repaired.

The surprise came when the rental car company turned around and said “the vehicle was in the shop for three days, and we couldn’t rent it out. So, Mr So-and-So, we are charging you for three days’ lost revenue”.

The credit card company refused to cover that. He had to pay for an extra three days’ car rental on a car he wasn’t even renting!

The policy offered by our agency would have covered it, and some credit cards do cover it. But make sure your client checks his coverage.

The second surprise happened to a neighbour who used points to rent a car. She paid the taxes and fees using her point-earning credit card. She picked up the rental at the airport and relied on that same credit card for coverage. Ten minutes out of the airport a drunken driver did a U-turn in front of her, and effectively wrote the rental car off. Fortunately, no-one was hurt.

“No problem” thought my neighbour. “I have coverage through my credit card”

Except that credit card coverage only applies – and this is important - if the full cost of the rental, including all taxes and fees, is paid with the credit card used.

She hadn’t read the terms and conditions. But then again, who does?

My neighbour found herself facing the full cost of a Nissan Rogue to replace the written-off rental. She would have been on the hook for $45,000-odd - for a car that could not even be repaired!

(Fortunately, as it turned out, her home-umbrella policy provided rental-car coverage, but she had a couple of sleepless nights before her home insurance agent came through for her).

I didn’t sign up to be an insurance salesman when I joined the travel industry. The powers-that-be, however, have made us, as agents, responsible for protecting travellers from themselves.

So, take the extra step – if your client is making his own arrangements for insurance next time you make a rental-car reservation for him or her, have him make a call to whoever is insuring him.

In addition to making sure he doesn’t get into trouble you’ll make yourself look good.

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Derrick Bloch

A regular contributer to Travel Industry Today, Derrick has been recognized by National Geographic Traveler as one of the top 80 travel agents in North America. 

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