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Uh-oh! Optional car rental insurance isn’t

April 25, 2009

Question: I hope you can help me with a problem I encountered with Hertz on my honeymoon in Croatia. My husband and I rented a car through AutoEurope and Hertz, but things didn’t turn out like we planned.

The price of the car was supposed to include all mandatory insurance. I called my credit card and double-checked that we would also be covered. But when we arrived at the Hertz counter in Zagreb, an agent refused to give us the car unless I paid an extra $207 for insurance that was listed as “optional” on the rental agreement.

I said I did not want this insurance and was told that if I did not purchase it, we would not get the car. I would have appealed to a manager, but she was the manager. We decided to pay the fee so we could go on our honeymoon and discuss the issue with Hertz upon returning to the States.

I contacted Hertz, which claimed I was clearly told the insurance was optional (not true) and had signed the rental agreement and therefore they had no obligation to return my money. I think Hertz owes me for the insurance. Could you help us? — Jessica Santangelo, Richmond, Ky.

Answer: Hertz shouldn’t have forced you to buy “optional” insurance. In fact, the moment you ran out of appeals, you should have taken your business to another car rental company. Several other agencies have locations in the Croatian capital, including Alamo, Avis, Budget, Dollar, and National.

But did you exhaust all of your appeals? You could have phoned Hertz and AutoEurope before caving in and buying the extra insurance. It’s worth the cost of the international call (although AutoEurope has a local number in Zagreb). That might have cleared things up quickly, allowing you to get on with the most important vacation of your life.

Another question: Where was your travel agent? When you take a honeymoon, you must use a travel agent. No two ways about it. Why? Because a trusted travel adviser will help you fix any problems with your vacation. If you’d phoned your travel adviser from the airport, you might have been able to sort this out.

Waiting until you returned made a successful resolution difficult. I’m not surprised that Hertz turned down your request for a refund. But I was curious about why it rejected your appeal. So I asked.

Hertz agreed that insurance in Croatia is optional. But customers refusing insurance are required to sign a document that says they’re liable for the full value of the car. When you sign that document, the preauthorization amount to your credit card is “substantially higher,” according to Hertz.

The company’s records say you signed that document and were advised of the higher pre-authorization. In order to lower that amount, you were offered insurance, which you agreed to buy.

That contradicts your account. You say you were never asked to sign any such document, nor did Hertz ever try to preauthorize your card.

It’s possible that you’re both right. Maybe the Hertz supervisor in Zagreb thought she had told you about the preauthorization and offered you the insurance, which you accepted. I mean, it’s a fair bet that English wasn’t her first language. Or maybe your Croatian was a little rusty. Either way, this looks like a simple misunderstanding because of language.

Next time you rent a car overseas, make sure you ask for the terms and conditions in your language. If you have a question, ask a representative — and if you’re having a hard time understanding the paperwork, call your agent or the car rental company’s corporate office.

Hertz sent you two $75 vouchers.

Christopher Elliott is the author of Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals. Critics have called it “eye-opening” and “inspiring” — it’ll “grab your attention and won’t let go.” Order your copy now on Amazon, Barnes & Noble or iTunes.

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15 comments

  • carver

    I’m a little confused. Did Hertz try to get an authorization on the card for the larger amount and it failed? If that’s the story, then the OP should be able to find out from her credit card company whether that’s true or not.

    Admittedly without any evidence, I’m going to believe the OP. I was at a U-haul and the owner demanded that I take out insurance or she wouldnt’t let me rentthe van. As she was the owner and insurance was only $5-$10 argueing didn’t make sense, especially since I had all my friends ready and willing to help with the move that day.

  • Amy

    The car rental companies have gotten much pushier in the US too. The rep last week was quite demanding. FIrst he insisted on walking me out to the car with the unsigned contract, seemed courtious, it was 9 pm and the parking lot was dark. He started up the mini-van – only car left, at my price – unless I wanted to upgrade for a higher cost. He started it up and left it run. Now this was April in Washington, DC, not December in Boston, so certainly not necessary to warm up the car, just a waste of gas and extra pollution. Then he started discussing the insurance, which I declined saying I was covered, The barrage of questions started now! Did I know I would be responsible for the deductible , how much was my deductible, which he proceeded to write down in very large lettering on the margin of the contract, who was my insurance comapny, what is their phone number, what are my limits on and on. I am paying for this rental with Amex and have their extra cost insurance and tell him so, my personal car insurance is not needed. Meanwhile we are walking around the car to check for dents or scratches, which we really cannot see well, the car is not under a light, but the car was new and in great condition. He hands me the contract to sign and initial in several places, still going on about the dangers I am putting myself into by not getting their insurance. It is too dark to easily read the contract so I pulled out my flashlight on my key chain. You’d think it was a crime to actually read the contract, he was livid! But I just kept reading and signing whatever I needed to while I reminded him that he said he had promised me a map of the airport and surrounding area while we were still at the desk. He had to head back to the office for that while I finally turned the engine off and continued reading. I had also refused the prepay for the full tank of gas, I knew I would have time to refill and could see how close the gas station was to the airport – the sign was huge! Now the tirade about the costs if I did not buy his gas deal. i just gave him the look I give my dog when he is barking his fool head off at a squirrel and it worked on this guy too. He finally shut up, gave me my contract and I said thanks and good night. Still, I kept thinking about the various ways things could go wrong and all the potential costs and second guessing my decisions. Nothing adverse happened, and the credit card charge was correct on my on line statement, but all the pleasure of driving that car was gone. It is so tiring to have to be on the defense all the time.

  • carver

    @Amy

    That;s just messed up. You can avoid that by signing up for the frequent renter program. You bypass the counter and all that nonsense.

  • Chicky

    Hehehe, Amy. I loved the line, “I just gave him the look I give my dog when he is barking his fool head off at a squirrel and it worked on this guy too.” Too good. I’ll have to remember that.

    One other good defense against any “damage” claims is to get your handy-dandy cell phone or digital camera and just videotape the car, or snap several photos, which ever is easier, the day you return it. Put a copy of that day’s newspaper on the hood to verify the date. Save the photos to a CD or flash drive and have them on ready-five to produce, if necessary.

    So far, thank goodness, I haven’t had these sorts of problems with rental car agencies. But thanks to this Web site, I’ll be prepared if I do have them!!

  • Jesse

    Is it just me or is it real sad we have to go through these great lenghts to protect ourselves from the predatory tactics of car rental companies???

  • Chicky

    No, it’s sad. Really, really sad.

  • DN

    @Carver: Not true. Some airports are too small to have the “bypass the counter” option (Boise, ID and Billings, MT are two that come to mind) and I am an Executive Elite with National. I do carry a digital camera with me to photograph any major damage because a number of these counters make you sign the paperwork and the damage waiver before you get your key or your parking assignment. I also carry a flashlight with me so that I can inspect the car in dark rental garages or lots. It’s amazing how many potentially billable scratches, dents, and the like show up in the morning sun!

    In Billings, they marked all of the damage on the car and had me sign the damage waiver before I received the keys to the Subaru Forester. I walked to the car, inspected the car, and was quite amused that they did not notice the large 8″x3″ dent on the front quarter-panel. I took photographs of the dent from a few angles, walked back to the counter, and had them append the damage waiver and initial it before I would accept the car.

  • DN

    @Chicky, the newspaper is a great idea. I never thought about that one!

  • Carver

    @Chicky

    You are technically correct. Not every airport has a bypass counter. However, the advice remains correct. Bypassing the rental counter happens at the overwhelming majority of major airports and allows you to avoid the high pressure sales tactic.

  • Kooshie

    Just sounding off for two of the other posters that sound like they do a ton of corporate travel. Over the years I have had 4 “accidents” in rental cars. 2 weren’t my fault, 1 I filed under my corporate insurance with Farmer’s and 1 was a personal rental that ended up going through Allstate. 1 that wasn’t my fault wasn’t that big of a deal but the other 3 were all horrible experiences. Both Visa and AMEX totally left me holding the bag after the incidents and I ended up paying a bunch of “uncovered expenses” on the 2 that were my fault. So what I ended up doing was buying the LDW for several months until one of my accounts convinced me into getting a corporate account with one of the rental companies (Enterprise). Now I have the LDW included in every rental, I get the same rates at all the airports (means I pay a slight bit more sometimes of the year but waaay less during the summer and in busy airports), and finally, my rate has the insurance included so there isn’t even the conversation. Super easy and fast everytime. Has made my life easier so I’ll pass that little nugget of info on.

  • Carver

    @kooshie

    What I don’t understand is where was your regular insurance company? It should have convered the expenses except for the basically fradulent loss of use charge which should be fairly easy to dispute.

    Notwithstanding international travel, I see no good reason to get the car rental insurance policies. If you are a frequent renter, just make sure that your primary insurance policy covers rental cars.

  • Bryson

    @ Carver

    What do you mean fradulent (sic) loss of use charge? That charge is for the time the vehicle spends in the shop while being fixed, because it obviously isn’t getting rented out…. if you damage the company’s vehicle, why should the company be losing revenue?

  • joe

    You guys are confused. I’ve been working for Budget for 3 months and have watched a dozen people buy totalled cars from this company. I used to work for a credit card company too, and unless you have the black card (you know, the one that Oprah has) then your credit card coverage is secondary to your own insurance. This means that unless the damage to the car exceeds what your insuarance will cover, then your credit card will not help you at all. Rental car agencies are not competing with your credit card nor your insurance. We are offering you an option to not have to risk paying your insurance deductible, and risk having your premiums going up over a rental car. I look at people that don’t get the damage waiver as big gamblers, as you are gambling the money you could end up having to pay over the few dollars you could pay to know it wasn’t ever going to be an issue. Oh, and don’t forget that if you put one of our cars in the shop, you pay loss of use fees. No insurance company, nor credit card will cover loss of use. Loss of use isn’t at the discounted rate we give you, it’s at the premium. So that $50 a day car could cost you $90 a day while it’s in the shop – straight out of your pocket. The worst part about this is that a few people will read this stuff and think that you ranters know what you are talking about. Then they will say no to the damage waiver, and buy another car from my boss.

  • JustMeee

    All that, or maybe it’s the fact that corruption in Croatia is rampant and lying to cover it up is business as usual.

  • Carver

    Loss of use is only appropriate when the vendor is sold out. Otherwise the vendor has not loss any revenue.

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