In Saturday's mail came a promo piece from the Citibank AAdvantage credit card people. The back of the outer envelope proclaimed “Big News.” On the front, “Things are about to change for the better.” Yeah sure, was my brain's cynical response. Nonetheless I took a look inside. Surprisingly, the envelope's claim comes pretty close to being true.
Starting November 23, 2014, the Citibank AAdvantage credit card will cover collision damage waiver (CDW) and theft insurance on ANY RENTAL CAR, including luxury models, in ANY COUNTRY, for losses up to $100,000 on rentals as long as 31 days. A key bit of fine print says that if the rental company requires the purchase of CDW and theft insurance, then the card will cover any deductible charged to the cardholder.
Indeed, this is a change for the better. First, it solves a big problem for Italy travelers. In that country renters are required to purchase CDW and theft insurance, but with a €1000 to €2000 deductible or “excess.” To reduce that deductible to zero they must purchase expensive “Super CDW and Theft.” For example, you can now rent a midsize Hertz car in Italy for two weeks from Gemut.com for $580. The deductible, however, is €1,800 or nearly $2,300. If the car is damaged you pay the first $2,300 of the repair costs. In order to get that same car with zero deductible the rental price jumps from $580 to $667. But after November 23, Citibank AAdvantage will reimburse cardholders for any out-of-pocket deductible costs thereby making the purchase of Super CDW unnecessary.
The same goes for Ireland, another country with confusing rental insurance requirements. Currently, only holders of MasterCard World Card, MasterCard Business Card, and Diners can decline the purchase of insurance...provided they also present a letter from MasterCard certifying coverage. Though it remains to be seen if Irish rental companies will allow customers with the Citibank AAdvantage card to decline insurance, cardholders can take a pass on the purchase of Super CDW/theft.
Citibank has also closed the luxury car and nine-passenger van insurance loophole. Currently, Visa, MasterCard, and most American Express cards don't cover vehicles valued at more than $50,000, nor do they cover nine-passenger vans.
For rentals in Europe, the AAdvantage card is “primary,” meaning it provides coverage even if you have other insurance. With most other credit cards, if you decide to buy insurance at the rental counter in, say, Germany or France, your credit card insurance steps out of the picture and you have no coverage other than what you purchased from the rental company...with its high deductible and many exclusions (wheels, glass, interior, side mirror, undercarriage, roof).
Another credit card that provides “primary” coverage is American Express enrollees in its Premium Protection program. Its coverage is broader than the Amex regular CDWTheft insurance because it is, as previously noted, primary. It also covers rentals up to 42 days in length and provides coverage of many expensive cars, as well as nine-passenger vans. What it won't cover, however, is the deductible in Italy or Ireland. It also isn't free; costing from $19 to $25 per rental, depending on your state of residence.
If you're a frequent European car rental customer, it might not be a bad idea to carry both cards.