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. Last Updated: 07/27/2016

Amex Tightens Up on Rental Risk

With auto insurance ever-costlier, car rental firms and credit card companies keep seeking ways to lighten their burden -- which invariably adds to yours.


American Express, which pioneered free credit card collision coverage, recently stopped providing it in Ireland, Israel and Jamaica as a cost-cutting measure. That will force most travelers who don't have other credit cards or personal insurance that covers crash damage to buy a rental company's waiver in these countries -- adding as much as $20 a day to the bill.


Amex has scratched places with "higher than average incidences of claims'' so it can continue offering damage coverage elsewhere, a spokeswoman said. The company had previously withdrawn its loss and damage coverage in Italy. The rental firms that don't insist customers purchase insurance may freeze their credit line up to the full value of the car to protect themselves in view of the country's high auto-theft rate. Credit cards also don't offer damage coverage in Australia and New Zealand, where it's built into the rental price.


Irish rental firms were about to reject all credit card protection plans this month due to "various operational difficulties'' but reversed the decision after the tourist board intervened, a board spokeswoman said. Amex had already announced it was dropping out there, but MasterCard and Visa maintain that their gold cards and similarly premium plastic will continue to provide worldwide coverage wherever it's not precluded by local law. Travelers whose employers subscribe to American Express' special corporate-card loss and damage program also can get card coverage in countries other Amex cards exclude.


The complexities of the international insurance scene are further compounded by the fact that damage and theft protection are usually sold separately abroad rather than combined in a single U.S.-style Loss Damage Waiver, or LDW. Vacation packages that include a car may come with one coverage and not the other. Any coverage on rental cars usually is limited to a maximum of 15 to 30 consecutive days. Find out for sure. And don't expect it to cover a totaled Ferrari -- or even a four-wheel-drive vehicle. If you have an accident abroad, credit-card coverage is "primary''; any policy you have on your own car is tapped only as a "secondary'' source to cover excess costs. It's just the opposite with rentals in America, unless you lack personal insurance. But always clarify the extent of your insurer's rental coverage whenever you leave home.