Title: Navigating Insurance Claims When Using Loyalty Points for Car Rentals
Are you leveraging loyalty points to minimize your vehicle rental costs? Recent experience highlights some important considerations when it comes to insurance coverage and rental expenses.
Imagine this scenario: You rent a vehicle from a major agency, such as Enterprise, using their online platform. You apply your loyalty points to significantly reduce the rental fee. On the day of pickup, the total due is just a small amount—say, $5.47—and you settle this charge entirely with a premium credit card that offers built-in rental insurance, like the Chase Sapphire Reserve.
Typically, such credit cards provide primary coverage for rental cars—meaning they can handle claims independently, provided you meet certain conditions. These conditions usually include charging the full rental amount to the card and declining the rental agency’s own Collision Damage Waiver (CDW). In this case, both conditions were met.
However, complications can arise if a minor accident occurs during the rental period. You might then file a claim with your credit card’s insurance provider. But what if the insurance company raises hurdles?
In a recent case, the claimant faced persistent rejection from their insurer, Virginia Surety/Assurant, despite providing documentation—the billing statement showing the full rental amount of $5.47, identical to what was charged at the counter. The insurer requested this proof repeatedly, seemingly ignoring the evidence provided.
This situation raises an important question: Could insurance providers deny coverage simply because the total rental cost was discounted through loyalty points? Could they interpret the actual amount charged as insufficient for full coverage eligibility?
Key considerations include:
- The total amount paid to the rental company was precisely $5.47.
- The renter actively declined the agency’s CDW.
- The credit card’s terms specify that the full rental amount must be charged to qualify for coverage, with no explicit limitations concerning discounts or points use.
In practice, the decision to use points to lower rental costs is common. Yet, some insurance policies or providers might interpret “full rental” as the original amount before discounts or points application, potentially leading to coverage denial.
Lessons learned:
- Always review your credit card’s insurance policy and terms carefully, especially regarding discounts or loyalty point redemptions.
- Keep detailed documentation of the full rental charges, including billing statements showing the exact amount paid.
- If disputes arise, consult with an insurance professional or legal expert familiar with credit card benefits and
