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CDW coverage when you book your car rental with points. Are you covered?

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  1. I’m always trying to think about topics to cover where I once had a question and it took some research and phone calls to find the answer.

Let’s talk about car rentals that you book with points or certificates. That could be paying for your rental with Citi Thank You points, Chase Ultimate Rewards points, or American Express Membership Rewards points – or it could be using frequent flyer miles or even free day certificates from your car rental company of choice – i.e. from Hertz #1 Gold.

So you booked a great car for a few days and you get to the counter and your cost is zero.  And then they ask if you need the supplemental insurance.

“No,” you say. “I have insurance with my credit card.”

But you DO NOT.  The terms and conditions of the insurance that come with your credit card require that you “book and pay for” your rental in full with that credit card.

I’ll quote from the Visa CDW benefit guidebook:

How do I activate this benefit?
For the benefit to be in effect, you must :
• Initiate and complete the entire rental transaction with your eligible Visa card, and
• Decline the auto rental company’s collision damage waiver
(CDW/ LDW) option or similar provision

So if you paid for the rental with points or certificates, you are NOT covered.

You’ll need to pay for the car rental company’s insurance to be covered in that case (unless you want to rely on your own personal insurance which may or may not cover it and may have a high deductible anyway). That can be an additional cost on your free rental of $15-$30 a day.

For this reason, I never use points from any program to get a free rental.  It costs as much as I’d pay just using Priceline and having included CDW/LDW from my card!  But I will use free rental certificates I may earn (and use them for the Premium level car, of course) because there is no lost opportunity cost associated there (I’m not using points I could have used elsewhere).

How about you? Do you avoid using your points on car rentals for the same reason?