Is the car rental industry’s damage claims process fair to travelers?

Always, always, always take pictures of your rental car.

Oh, I know, I sound like a broken record by now, but consider what happened to David Balovich when he rented a car through Alamo at the San Antonio airport recently.

Balovich, who was in town on business, would normally take a cab into town, but he’d found a mid-size rental for just $10 a day through Priceline’s Name Your Own Price site – a real bargain.

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“I declined the insurance several times as I read through the rental agreement,” he says. “The pressure to purchase the insurance by the counter clerk was unbelievable. I think he must have sold timeshares at one time.”

The rental was uneventful and accident-free. Balovich returned the vehicle two days later.

“I asked the Alamo employee to inspect the car while I took pictures with my Blackberry (see image, above),” he said. “After he finished his inspection and said there was no damage I had him write on the receipt ‘no damage’ and had him initial the receipt.”

Almost two weeks later, Balovich received vaguely worded letter from Alamo, saying he should file a claim with his insurance company or pay the damages with his credit card. But the letter did not describe the damage or the cost of the repair.

I’m going to hand the mike over to Balovich for a minute to let him annotate the letter with his comments.

Dear Sir/Madam:

They addressed the letter to me and they can’t figure out if “David” is a sir or a madam?

Thank you for recent your recent rental. Our Damage Recovery Unit has received notification of damages or loss to the vehicle you rented.

Notification from who? I have a dated, signed receipt that says “no damage.”

If you have not already done so, please contact your insurance company and/or credit card company to report this claim. Failure to report in a timely manner may void any coverage you may have. Once reported, please contact us to provide your claim information.

Report what? How does one file a claim when there is no information as to what the damage is and they do not provide a dollar amount? Not even an estimate.

If you do not have insurance or wish to pay this claim yourself, we will send you a bill along with supporting documents. If you have any questions regarding your responsibility, please contact our office.

What is this? Lets Make A Deal?

Door number 1, file a claim for an unknown amount and damages that we are not going to inform you of, OR Door number, 2 agree to pay the unknown amount yourself and WE WILL THEN send you a bill with supporting documents.

Are they for real?

Thank you in advance for your cooperation.


Alamo Rent A Car

Yes, they are for real. I’ve seen this form letter before. It scares the living daylights out of customers.

So Balovich phoned Alamo to straighten everything out.

I first spoke with Shawn and after providing her with the claim number she told me she did not have the details or the estimate of the damage and transferred me to Derrick.

Derrick said the windshield on the driver’s side of the vehicle was cracked and the estimate to fix it, not replace it, was $600. He told me I could file a claim with my insurance company or pay the $600 right then with a credit card.

At this point, most people would pay up. But not Balovich.

When I told him I had pictures of the vehicle, when it was returned, and a receipt from the intake attendant stating there was no damage to the vehicle he put me on hold for about ten minutes.

I then found myself talking to Crystal who told me that I had opted not to take the insurance and I was responsible for any damages while the car was in my care. She offered to send me a copy of the damage report along with the estimate for the repairs.

Again, I repeated that I not only had pictures of the vehicle when it was returned but I also had a receipt initialed by an Alamo employee stating there were no damages to the vehicle when I returned it.

This statement was met with silence for almost a minute and then Crystal said, “Well it’s only a chip and we’re going to close the file is that OK with you?”

So that’s how it ended. Alamo dropped the claim after he offered to show it pictures and a signed receipt. I really like the “just a chip” line, and have no trouble believing a claims person said it.

Balovich can’t believe what happened. He says he’s troubled by two things.

“First, when they discovered I had pictures and an initialed ‘no damage’ receipt, the cracked windshield became a chip,” he says. “Second, before now I never even considered taking pictures of the windshield. After this incident, I’m not only going to photograph the body of the car and front and rear license plates but also the windshield and all the windows.”

Kudos to Balovich for taking the pictures, getting a signed receipt and resolving this on his own.

And for anyone else renting a car this summer, you could learn a lot from his story. Take pictures of everything. Get everything in writing.

You never know what might happen if you don’t.

45 thoughts on “Is the car rental industry’s damage claims process fair to travelers?

  1. I know I shouldn’t be surprised by this…I mean this is only the 1 billionth article like this we’ve read on Christopher’s site. (Alright alright, so what’s a little hyperbole among friends?) 😉

    But seriously, this one takes the cake. They’re not even TRYING to hide that it’s a scam anymore! Vague form letter that they clearly send out en masse, no dollar figure or description of the damage, just an in-your-face demand that their victim accept responsibility for…something, with an ominous threat of “voiding coverage” if they don’t capitulate.

    And the best part is, when they got busted…DOH! They just crumbled and blatantly ADMITTED it! “Oh, yeah, well, it’s just a [cough cough] chip, not even worth the $600 we were trying to squeeze out of you…I guess we’re caught, so we’ll just stop trying to rip you off now…is that OK with you?”

    Is that OK with you? BAHAHAHAHA!!!

    Yeah, we laugh, but it’s also sickening. The sad part is that we know full well there are infrequent travelers out there who are terrorized into falling for this scam.

    Seriously, this needs to stop.

    1. The super scary thing is that the NEXT poor renter of this vehicle is going to get the same bill for this ‘chipped’ windshield. Sooner or later they’ll find someone who wasn’t so diligent about documenting the condition of the car when they picked it up, and then, BLAMO – they own the chipped windshield.

  2. I’d consider reporting this to the police and attorney general — this sounds like an insurance scam to me. They are hoping you’ll give up your insurance/credit card info before sending any details, so they can file a claim and have it settled before you even have a chance to dispute it. I’ll bet they get a high enough rate to make it worth it, even if they have to drop a few like this.

    I wonder if the proper response to these damage claim is a strongly worded definitive letter, something like “There was no damage to this car at the time of return, as confirmed and documented by your employee YYY and my personal photographs. Please close this file immediately and reply confirming such. If you dispute this finding, send all supporting documentation, which must include dated photographs from the time of return, within N days.” Perhaps our resident lawyers can help wordsmith something better.

    I wish we could threaten personal prosecution and lawsuits against the employees perpetrating these scams (along with the company), but I know that’s not realistic.

    1. I’m with you on this one. I would have asked them to mail me all the “documentation” on the “damage” and then turned the whole thing over to the attorney general for fraud.
      Even if you keep good documentation, it still takes time to fight these things. It looks like this location is using the damage as a revenue generator.

  3. Insurance scam much? I hope the OP posts this far and wide and that Alamo enjoys all of the well deserved publicity. Isn’t this the second case in a week involving Scamalo??

  4. I’ll be the first one to say that you own damage that occurred while the car was in you care. However, this case points out that there’s no downside to the rental agency coming after a renter for questionable damage. All they have to do is say sorry and move on. This one needs a look by an AG office.
    Sadly I rented this week and due to a screw up by the rental agency, I was pressed for time. I also was going to end up leaving the car in an after hours drop off so I paid the insurance eventhough I’m covered by three separate policies for rental car damage.
    Sad but true.

  5. It appears that someone should be speaking to Alamo about this. Does this location send out a form letter to all customers and hope they will pay out. I think some sharp-eyed investigative reporter could make quite a story out of this. I wonder if there was really was an ‘estimate for repair’ as stated. Shawn, Derrick and Crystal have some explaining to do.

  6. I’d like to know who the 5 people are who, currently, have voted that the process is fair. Because if you think the above situation is fair, then you basically believe a company should be allowed to say and do whatever the hell they want to a customer and get away with it.

          1. Apparently some people love a good scam… as long as it happens to somebody else (which sounds a lot like those supporters of a certain government agency, too).

  7. Other than the entire damage claim process by rental car companies is a total scam with overly inflated prices for repairs and added items that have no bearing on what it really costs to fix the issue, the thing that bothers me the most is it is always weeks after you return the car that the damages letter is sent to you. Even if the damage you cause is to the underside of the car and is not obvious at return, there is no reason the claim should not be sent to you within 48 hours if not sooner.

    The rental car company claiming it takes time for them to determine who to send the bill to (not for this incident, but others have stated this) is total bull. They know exactly who had the car at any given time. I completely believe that what happens in many of these cases is the next renter or two do take out the insurance coverage but in order to not have to pay for the repairs themselves, the rental companies find the most previous renter who did not take out the insurance and blame the damage on him or her. If there is over 1 mile on the odometer more than when you returned the vehicle, the damage is not your responsibility because that means someone else drove it and therefore could have caused the damage.

    One rental company I have rented from charges the renters for damage and then doesn’t fix it and attempts to charge the next renter for the same damage — it happened to me when I got the same car twice within a two month period and both times they wanted me to pay for the same damage! Luckily I had filled out the damage form and gotten it signed before leaving the lot each time. I have not rented from them since.

  8. I think someone needs to take it a step further and sue Alamo and the other car rental agencies for making false claims of damage against renters (assuming that’s legally possible, maybe it is under “bad faith,” I’m not a lawyer so I don’t know). Making clear to the car rental agencies that there are negative consequences for them if they keep jerking around customers other than those customers not renting again (which isn’t much of a consequence since those customers usually do it on a one-time basis, not an ongoing basis) might help put a stop to their games.

  9. I’m not a lawyer, so I have no idea if the following would be legitimate/successful, but…here goes:

    1. Call Alamo and ask what the damages are. When they say, “Cracked windshield” tell them to send you the bill with documentation. (But be sure NOT to agree to pay, or make any admission that you own the damage.)
    2. When they send you the bill, sue them for fraud.
    3. Profit.

  10. I am a conservative, keep the government off our backs sort of person, but I’ve reluctantly come to the conclusion that a Federal law is needed to regulate this aspect of the car rental business. There need to be standard procedures, forms, and maybe even insurance policies, and an absolute prohibition against charging for any damage unless said damage is noted before the renter leaves the premises. There also needs to be a prohibition against charging the renter for anything beyond his control, like the clutch failure case Chris recently had. While such a law wouldn’t help when renting outside the US, it would clean up the business here.

  11. Since reading your column, Chris, I have been taking pictures of the vehicle before leaving the lot. When I was in Vegas last spring, there were so many dings and scratches, I actually asked for another car. I will now take more detailed pictures AND have the rep sign off that there is no damage (or that specific damage was already there). This is very timely for me. I have a funeral to go to next week and will be renting a car. Rental car problems would just make it a more difficult trip. Thank you.

  12. I certainly take pictures of my car when renting, but honestly how much do they help. Here they clearly were not needed, the check in receipt with “No Damage” was FAR more important. I don’t see why a car rental company would ever accept photos as evidence if it comes down to it.

    Either you have a
    A) Photos of the car with damage which you presumably took when checking the car out. Unless the rental agent happens to be in the photo (or perhaps the yellow copy of your rental agreement), wouldn’t Alamo just say “Nice Photos you must have taken these just after your accident”


    B) Photos of the car with no damage. Alamo would then say “Nice Photos you probably took these when checking out the car”.

    So how do photos help? They prove to you that you didn’t cause the damage but presumably you already knew that.

    1. The photos are date/timestamped, and you would attest to the time they were taken. Yes, EXIF stamps can be forged, however if it comes down to a court of law, if you’re standing there with photos that appear to back your case, that you affirm the time of, and the rental company has none, the evidence should tip in your favor

      By the same token, I don’t accept a written-only damage “report” from an employee, taken hours later perhaps. It’s highly likely that they damaged it on the lot — if the agency wants their own evidence, they should be taking photos of the alleged damage when discovered…at the rental return time. In the absence of that, I’d argue that my photos should trump.

      It’s not perfect, but it certainly can’t hurt to take your own photos, if only to show that you’re paying attention and they aren’t going to scam you without a fight.

      1. To me the word forging misconvey’s just how easy it is todo. Really your just right clicking on a photo and editing its properties. I do agree you might as well take photos as everyone has a camera. I just don’t expect those photos to hold much weight after the fact. Getting the receipt seems a lot more important, until someone comes out with a phone app that allows you to securely take those photos and immediately upload them in their pure form.

        1. Well, if the customer’s photos shouldn’t hold much weight after the fact, than neither should the rental company’s photos. 🙂

  13. Just curious — does anyone get into these kinds of problems with the “real” car rental companies? I use Avis (I’m willing to pay a little more for a top-flight experience, quality cars, quick service, etc.) and I’ve never ever had anything like this happen. The only time I’ve had issues like this is with the Cheap Charlie folks, when I’m trying to get a really low price. Alamo, Budget, Enterprise, etc. I’ve pretty much given up on using them because the stress and frustration are just too much for me, and make my trip a real unhappy experience.

  14. Kudos on standing up to the worse segment of the travel industry. Brilliant to advise that their agent signed off on the return. I would bet that 75% of the renters in today’s world would have accepted the letter. WOW!

  15. I rent over 75 cars a year from Hertz.
    I list pre existing damage on my contract, and have a rep sign it. Also include windshield stone chips, as they can turn into cracks. If I receive a notice, I photocopy the contract, and send it back to them.
    If they try to hit me for additional damage, I inform them that their rep inspected the car upon return, and found no damage at the time. It has never gone any further. I keep my receipts for 6 months before I throw them away.

  16. I recently signed up for a KLM frequent flyer number and once enrolled (2 minutes) they give you access to Partner discounts. They have a National Car contract number that not only gives hefty discounts, the code also includes the CDW and, I think, a couple of other insurances for free.

    Rented out of SFO in June and no problems.

  17. I always take pictures…also of the odometer. I think there should be a standard way of the car rental company doing a walk thru when you return a vehicle…period. It would probably mean hiring more employees, more training, etc, but you can bet I’d lean towards renting from a company that has such a return process with a signed sheet I can take with me, showing I am free and clear….also a full tank of gas. Didn’t they used to do this a long time ago?

  18. I’m surprised that the bill came in for $600. Usually on these, they come in at right under $500 (a very common deductible amount) to minimize their chances that they have to deal with an insurance company and their inconvenient questions.

  19. “I think he must have sold timeshares at one time” Priceless…

    I don’t know I can add anything more here than has already been said. I believe @LeeAnneClark:disqus has the best response to it all.

    However, I do want to say, the original letter the rental agency sent read more like a ransom note than corporate correspondence. Sadly, I’m sure Alamo paid a company to write that letter and others since it seems to be a form letter.

    When we take photos of our cars now, before and after the rental, do we need to include a photo of one of the employees holding the current day’s newspaper, showing the headline?

  20. Can’t vote because car rental business is not monolithic monster. Alamo, Enterprise and a couple others get out the microscope. I use Hertz where the Hertz-owned station managers (not franchised stations) tell me directly, eyeball to eyeball, we are not in the nickle-and-diming business. And it’s true for me over many rentals.

    1. Hertz tried another scam on me. I had rented a car for a week from them and on the first day of the rental, I started to feel sick and wanted my wife to drive. Since she wasn’t authorized on the car, we stopped at a Hertz airport location and asked if my wife could be added. The agent said that doing so would cost $14.99 PER DAY. I thought that the price was outrageous and declined to add her. The agent was very upset (probably because he wouldn’t get a spiff) and said that if she were caught driving the vehicle, I would be responsible for all damage and blacklisted from ever driving a Hertz car again.

      Seven days later when I dropped off the car, I was given a receipt that showed a charge of $104.93 for “additional driver”. The next day, I called Hertz where I had to tell my story to three levels of supervisors before it was finally agreed that the charge would be removed. Hertz may not play the “car damage” game, but they have other games that can bring them extra revenue.

  21. I dunno about you but when I travel on business I have my PDA which has a camera. So I photo the car before driving off – and note any damage on the forms or the contract. When you SIGN for the car: “Subject to Inspection” if there is no inspection before getting the keys. Right? When I return from my trip and sync my phone all the photos come off cleaning out the phone and putting them on my laptop whcih then goes into the Cloud. 6 months later – or thereafter- when I am poking through my photos one day I realize there is no claim being made and they get deleted.

    When I travel for pleasure – well – I usually then travel with a nicer camera than the one in my phone – but the procedure is the same. Take he photos – download them – off they come in 6-12 months.

    Its pretty routine now. The AMAZING is the one time I DID return a car with damage and filled out a report about another rental company [same company] vehicle hitting me in a parking lot, and filled out their damage form – they made zero claims and just kind of said ‘that stuff happens all the time.’

    Which leads me to the belief that with a newer vehicle which thy intend to keep little dings and dents are not a problem. I’d be willing to be that the claims made on cars have more than 15k miles and are in the queue to be cycled off the lot and for sale – so they want someone to pay for the dings and dents and small damage so they don’t have to . . .

  22. Wow… unbelievable story. Not good PR for Alamo, that’s for sure, although this could of course happen with any car rental company.

  23. I use Avis almost every week and never had a problem. When i see damage I take pictures of it, but I have to say I don’t make a habit of it. I always wonder how Avis could say damage came from me because as a Avis Preferred member I do not sign anything when I pick up the car, and no one looks at the car before I leave the lot.

  24. According to the current vote, three percent of the respondents believe that the rental car industry’s damage claims process is fair to travelers. They must all work for rental car companies.

    1. Just because they don’t agree with you doesn’t mean they “must” work for rental car companies. They may have other disagreements. For example, maybe the car rental business is franchised and this Alamo outlet is not actually following the claims process properly.

      One thing that is likely – this Alamo outlet appears to have been trying to scam this guy for insurance money.

  25. I recently had an insurance company recommended glass company send a technician to my home to repair a small crack in my windshield. Cost was only $62 or about 10% of the $600 that Alamo quoted their customer. What a rip-off!

  26. Taking pictures before and after, and making them inspect the vehicle, is a good idea. Unfortunately there isn’t always someone from the rental car company available to sign the document. I returned a car before 6 a.m. to catch a flight from Colorado Springs and there was no one there. I had to put the agreement and the key into a box and hope for the best.

  27. And really…a rental car for ten bucks a day? Of *COURSE* the rental company would try and pull a scam! I mean, they certainly aren’t making any money on the rental, so pull the damage card and really suck the dough out of the unsuspecting customer! Especially if the insurance company is going to pay!

  28. OMG!! I’m reading the comments and mouth hanging open!! My friend rented a car at ALAMO RENT A CAR, IN FORT WAYNE, IN…2 months ago. When he took the car he was told where to find it on the lot. When he brought the car back NO ONE went over the car with him, no one was on the lot he went inside to turn in the keys. He wasn’t asked if there was gas, etc.. THEN… 4 – (FOUR) days later he gets a call from ALAMO saying there was a scratch on the rear bumper…on the bottom under it ….by the rear camera! It would be $480.00. They would give him a $30.00 break on “loss of use.”

    My friend asked for a picture, of the scratch, the *claims rep* said, “EVEN HE DIDN’T get a picture of the damage.” I almost blew my top. This reeks of FRAUD!!!

    But my friend is thinking of paying it because he would have to fly into Indiana from MI and then fly back out.

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