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Credit-Card CDW Insurance Slipping

June 29, 1997

Americans' ability to use their credit cards to avoid paying extra for collision insurance from car rental companies abroad is being whittled away on two fronts.

Citing "an unusually high incidence of claims" in Jamaica, Ireland and Israel, American Express this month stopped insuring rental cars in those countries. Spokeswoman Gail Wasserman said that there are no current plans to eliminate more countries but that a review is done annually. Two years ago, the firm dropped coverage in Italy. Spokespersons for MasterCard and Visa, which offer the insurance with their premium-class cards, denied plans to follow suit. All three firms exclude Australia and New Zealand, where purchase of local collision damage waiver (CDW) insurance is required by law.

Meanwhile, in Ireland, the Car Rental Council, which represents 31 companies controlling 95% of the market there, yielded to appeals by the Irish Tourist Board and backed off from plans to begin rejecting CDW insurance by U.S. credit cards this month. But the council's chief executive, Robert Prole, said members "are still fed up" with the complexities of settling claims with overseas companies and may consider imposing the ban next year. He said local companies charge about $8 to $13 per day for CDW in Ireland.

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