Understanding the Risks of Using Loyalty Points for Car Rentals and Insurance Claims
In today’s travel landscape, utilizing loyalty points to cut costs on car rentals has become a common practice. However, recent experience highlights some potential pitfalls, particularly concerning insurance coverage when damages occur. Here’s a detailed account and some insights for travelers considering similar strategies.
Case Overview
Recently, a traveler rented a vehicle from a well-known rental agency through their online platform, applying loyalty points to significantly reduce the rental fee. At the counter, the final charge was only $5.47, which was paid in full using a premium credit card—specifically, the Chase Sapphire Reserve.
Key Benefits of the Credit Card
The Chase Sapphire Reserve (CSR) offers primary coverage for rental vehicles, provided that:
- The entire rental cost is charged to the card.
- The renter declines the rental company’s optional collision damage waiver (CDW).
In this case, both conditions were met. The full amount charged to the card was just $5.47, and the renter opted out of additional coverage.
The Unexpected Issue
During the rental period, an unforeseen minor collision occurred. The vehicle was returned, and a claim was filed with CSR’s insurance partner. While this coverage has been reliable in the past, complications have now arisen.
Insurance provider, Virginia Surety/Assurant, is requesting detailed proof that the full rental amount was charged. The renter has submitted the credit card statement showing the $5.47 charge, matching the rental date. Despite this, the insurer continues to ask for additional documentation, raising concerns about the legitimacy of the claim.
Potential Complications
The core concern is whether using loyalty points to reduce the rental fee affects the insurer’s view of the “full cost” of the rental. Some key points include:
- The total paid at the counter was only $5.47.
- No additional charges or fees appeared on the billing statement.
- The renter declined the rental company’s CDW, aligning with policy requirements.
- The card’s terms specify that as long as the full rental amount is charged, coverage applies—without explicitly forbidding the use of points or discounts.
Legal and Practical Considerations
While policies vary, many credit card travel protections rely on the actual charged amount rather than the original rental rate. If the statement reflects the actual transaction—$5.47—the insurance provider’s denial seems to hinge on whether they consider this sufficient proof of full coverage.
Tips for Travelers:
- Document Everything:
