Think your car rental coverage covers you? Think again.

By | February 7th, 2016

When Tien Doan recently rented a car from Hertz at Paris’ Orly Airport, he took every precaution he could to protect himself. But it wasn’t enough.

Doan inspected the car and pointed out several scratches on the right side. He trusted the Hertz agent to make a note of these scratches as she said she would, but didn’t check the final rental agreement to make sure that the scratches had been noted. After all, he and his wife had just disembarked after a very long U.S. to Paris flight and wanted to get on with their trip.

He even bought Hertz’ optional Collision Damage Waiver (CDW).

When the Doans returned the car four days later, they were told by Hertz that “everything was fine.” But the CDW deposit made using their VISA card was never refunded. The Doans called Visa, and Visa credited their account for the CDW deposit amount.

End of story? Not exactly.

A few weeks later, the Doans received a 226 euro bill from Hertz, along with a not-so-subtle threat of turning the matter over to a collection agency if the amount was not paid immediately. The Doans obviously were upset – first, for having to pay to repair scratches that Doan had pointed out but the Hertz agent had failed to document (Doan had not caught this omission when signing the final rental paperwork), and second, because the CDW did not cover the repairs.


The Doans contacted us and our advocates went to work. We got in touch with Hertz and were told that the European CDW purchased by the Doans only covered part of the repair costs. Had the Doans spent extra money and purchased a full coverage policy called SuperCover from Hertz, all of the repair work would have been covered.
Moral of the story:

  • Make sure that all vehicle damage (interior and exterior) is fully documented by the car rental agency before signing the final rental paperwork.
  • Make sure that you know exactly what the rental company’s CDW actually covers. As the Doans have learned, all car rental CDWs are not created equal.
Related story:   Is it mandatory to purchase CDW insurance from your car rental agency in Mexico?

Remarkably, you can buy a car rental company’s pricey insurance and make all the notations you want — and it still might not be enough. If you don’t believe me, ask Doan.

Did Hertz charge Tien Doan correctly?

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  • Alan Gore

    Only a dedicated masochist would rent a car in Europe, where there are alternatives to driving. When you can’t even trust Hertz there, who can you trust?

    But is there any sign that this new escalation, use of the phony damage claim against rental customers who used the company insurance, is spreading Stateside? In an election year, we especially need to know.

  • MarkKelling

    First, the CDW is NOT a “deposit”, it is a purchase of an insurance product and is not refunded. Wouldn’t it be great if you got a refund of all your insurance premiums every year you don’t file a claim? Sure, but it doesn’t work that way. If they were referring to the large hold placed on the Visa account that many European rental agencies now do if you don’t buy the full coverage, that would have expired anyway in a few days. Second, there is a separate “dent & scratch” form that gets filled out at Hertz to indicate the pre-existing damage of which the renter receives 2 copies and is instructed to return one copy with the vehicle at the end of the rental. It is never noted within the rental agreement the renter receives. No form, no proof.

    Given this, do I feel the renter is being charged only for damage he may have caused? Can’t say.

  • MarkKelling

    If I really, really, had to drive in Europe, I would even in the countries that drive on the wrong side. But I agree that it would not be an enjoyable experience. I would much rather leave the driving to someone else either on a bus or train so I can look at and enjoy the sights around me.

  • Éamon deValera

    What is a CDW deposit? If he purchased the CDW and then had it refunded he owes for any damage, including existing damage that he didn’t insist was on the rental agreement.

    Renting a car has become adversarial, treat them like you would an opponent in court. Get evidence – take photographs of the car from all angles while they are watching, get everything in writing – if you ask a question make them note the answer on the contract. Don’t start off the rental in a losing position.

    I also find it beneficial to use first party insurance from a credit card – Amex has it for ~$20 per rental if you opt in at their website, some other cards like the Chase Sapphire have it automatically I’m sure others do to, but those are the ones I use.

  • Annie M

    Better advise is to take pictures when picking up the car and when dropping it back off. Then you have proof and don’t have to rely on the word of anyone at the car rental place.

  • Pesobill

    Should have used the Amex special insurance you sign up for previously as a cardholder. It is a primary insurance not backing your insurance on your car. Works well. I have had numerous problems primarily in Mexihole as the crooks outnumber normal rental companies. Another reason I don’t travel s hole places like México.. Check out the insurance on Amex or suckered up and pay the full ripoff..

  • Purchase of CDW in virtually all countries other than the US comes with an excess/deductible, just like on your personal car insurance. Most car rental companies will also sell a “Super CDW” product at a higher price (or sometimes in addition to standard CDW) that reduces the excess/deductible to a lower amount or more often than not, zero. This catches a lot of US renters out as here the excess if you buy the car rental companies insurance is usually zero right off the bat.

    The “deposit” in this case will have been for the value of the excess/deductible plus the cost of a tank of fuel in all likelihood in case the renter returned the car empty.

    Excess/deductible amounts vary widely from one country to another. In some countries in Europe it can be as low as €150-250 however, in others it can certainly sting if the car is damaged during the rental. Even a small cheap rental car in the UK will usually have a deductible of £700 or more, in others like Spain and Iceland it’s well over €1000 and in Australia you are looking at close to AUD$2,500.

    Also note that the car rental insurance coverage that comes with most US credit cards won’t cover you at all if you buy the rental companies insurance.

  • Tricia K

    I’m curious why they expected the CDW to be refunded. That is a policy you purchase to cover the term of your rental period. It is seriously over priced compared to your own car insurance, but they don’t give you a refund if you don’t have any claims for the year either. I learned the hard way that if you are going to rent a car in Europe, make sure you suck it up and pay for the “super” coverage (again, seriously over priced), and for any car rental, take your phone or video camera and take pictures when signing out the car and when you are returning it, and keep that video for at least six months.Make sure you include a picture of the VIN number so you can make sure they aren’t hitting you up
    for the wrong car. We are going back to Ireland in April (my mistake last year cost over $2,000). I learned from the advocates that Auto Europe was a good way to go, and they offered liability insurance in case someone in the other car is injured. I don’t know if they all do that. And, since $600 is better than $2,000, we are going to suck it up and buy the super coverage when we get there (Ireland is one of the countries that require you to buy the insurance there). I’m hoping it will reduce the stress of driving and leave me enough money to go see a game at Fenway this summer.

  • Tricia K

    My rental im Ireland came with a 2400 euro limit to the liability with the regular CDW coverage (which was about 400 euros. It would have been at least 600 more euros for the Super coverage (I stupidly tried to save money because my brother was on a tight budget). I believe could be fixed for $500-1,000 here, I was hit up for I think 2100 euros total. Kind of like in the US, where your deductible is &500 and the damages are $480.

  • Peter

    I recently had a very similar experience, renting from Hertz in Spain. I booked the car (and took all the available coverages) in the US. When I arrived in Barcelona, I was told that I needed additional “Super” coverage (something like an extra 50 Euros a day) or that I would be liable for any damage up to 1300 Euros. When I filled out the paperwork, I was shown a car damage form, noting something like 20 different tiny nicks and marks on both sides of the car (most smaller than 1/4 inch in length and barely noticeable). When I asked the clerk at the counter if I added an additional mark, what the cost would be, he said with a smile, something like 200-300 Euros.

    I took full photos of the car and did not buy the “extra” coverage, and fortunately didn’t get charged extra when I returned the car. It does make me wonder why, if they charged for each of these so called “damages”, they never repaired anything and just collected the money from each customer (which by my calculation, would have been something like 4000-6000 Euros for these tiny nicks and marks).

    I had no alternative to renting because I needed to go pretty far out of town, but it’s really just terrible what the car rental companies do to their customers in Europe. I have been Hertz Gold for over 20 years and never damage a car. But these are local franchisees, and they play their little tricks on visiting tourists to their hearts’ content. It’s really disappointing that Hertz lets this go on.

  • Michael__K

    There is ALSO a deposit if the T&C’s say there is one (as they do for this outfit)–

    We will reserve credit on your credit card at pick up to cover the estimated charges arising from your rental, including (i) a full tank of fuel and (ii) € 500.00 towards potential damage (unless you have taken Super Cover to eliminate your liability to us for damage). The reserved amount will be released on final calculation and payment of your rental charges on return.

  • Michael__K

    It’s the mandatory “€ 500.00 deposit towards potential damage” that they presumably expected to be refunded and disputed with Visa.

  • MarkKelling

    I thought I said that. :-)

    “If they were referring to the large hold …”

  • Michael__K

    A hold would be understandable, but if “Visa credited their account for the CDW deposit amount“, that makes it sound like it was more than a hold.

    In any case, the terms state that the amount should have been released immediately when the rental was paid for on return.

  • LonnieC

    For the last few years, in addition to photographing our rental cars, my wife has taken the rental car form with her to the car and noted (“x”-ed) every single spot where there is even a smudge. The form ends up with marks absolutely everywhere (hey, we can be as picky as the rental companies, can’t we?). Then she has the rental clerk sign/initial the form before we check out. The first few times she did that I thought she was overly cautious. However, after reading all of the horror stories on this site, I’m glad she does that. Now, short of a fender falling off, there is no way a rental company can tell me after we’ve returned the car that there is a new mark on it. Every single location is already marked. So far, we’ve had no problems with being charged after return with any damages.

  • MarkKelling

    I think it is terminology. To “reserve credit” is a British English way of saying “place a hold”. The customer saw something on his online credit card statement that reduced his available credit by €500+ from Hertz and assumed it was charge. So he called Visa and they said it was removed. (Happens all the time, a side effect of instant internet access and being able to see things you used to have to wait for the mailed bill to see). Unless he can show a monthly statement with a €500 charge from Hertz and a corresponding €500 credit, it was only a hold.

    Yes, the way holds are supposed to work and the way they do sometime don’t agree. The merchant requests a certain amount which will be over and above the final bill that is held temporarily (depending on the merchant they can ask for various hold lengths up to weeks). Restaurants always do this so that the tip doesn’t require an additional authorization from the credit card issuer. Hotels do it to cover anything charged to the room. Rental car companies now do it to cover the deductible. Then when you sign the final bill, the final amount is sent on to the credit card company and any excess is released when the merchant does their end of business day close out. But many times the completion doesn’t exactly match the original authorization so they don’t match off. When this happens the hold does not disappear until it expires based on the original hold time frame. I believe that is what happened here.

  • Bill___A

    Actually I have rented Hertz cars on that side of the Atlantic and the contract is VERY EXPLICIT about the difference between the “CDW” and the “Super Cover”. This article starts out to say he “took every precaution he could to protect himself”. Reading further into the article, it is apparent that he didn’t.
    He didn’t make sure the scratches were noted.
    He didn’t read the agreement obviously or he’d know about the two levels of CDW.
    He didn’t take any pictures of the car upon rental which could be used to prove the scratches were there.

    How are they supposed to know the scratches weren’t him? There’s no paperwork to show it and they have his signature agreeing that they weren’t there when he rented it (because of his signature and no note of the damage).

    Although I hate to take the side of the rental car company, there are two sides to every story and when you take a car, agreeing in writing that it is in good shape, and return it with scratches…..how are they supposed to believe you?

  • Noah Kimmel

    the Amex Platinum does as well

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