Is mandatory car rental insurance a “bait and switch” scheme?

When Michael Kestan rented a car in Israel through Expedia, he went through all the steps necessary to ensure he was insured. That included buying travel insurance through Expedia, which, he was assured, would cover him.

It didn’t.

Elliott Advocacy is underwritten by battleface -- At battleface, we deliver insurance that doesn’t quit when circumstances change. We provide specialty travel insurance services and benefits to travelers visiting or working internationally, including in the world’s most hard to reach places. Currently selling in 54 countries and growing, our mission is to deliver simple solutions to travelers worldwide heading out on their next adventure.

“When I arrived in Israel I was advised that Hertz had a mandatory insurance,” he says. “The insurance was $29 per day — twice as much as the car rental. At no time did Expedia advise me of these charges and at no time was I given an opportunity to shop around.”

This isn’t the first complaint I’ve had about Expedia or its lax disclosure of mandatory car rental insurance. Here’s a case I mediated back in 2011.

Just for kicks, I went shopping for a rental car in Tel Aviv for next month. At the bottom of the rate sheet, in fine print, it says, “May not include mandatory insurance charges that are required for certain international rentals.”

Is that enough disclosure? Maybe.

But the fact that Expedia would sell a travel insurance policy that purports to cover Kestan — I find that problematic.

Of course, he had no choice but to pay the $29-a-day insurance, which significantly increased the cost of his rental. When he asked Expedia to cover the cost, it refused.

He adds,

They have only refunded the $72 for the insurance I bought through Expedia. At least that’s what they said on the phone — I have not seen evidence of this yet.

Expedia, as I understand, has known about this “bait and switch” and is simply refusing to live up to its responsibility to ensure that they deliver what they promise.

I do not understand how they can offer this insurance when they know it is not accepted. They need to live up to their commitment. I firmly believe that Expedia should reimburse me the mandatory insurance charge.”

I see his point. Why sell a product that won’t cover you? Why quote a rate when you know everyone renting a car from the United States will be forced to pay for the insurance?

Expedia is the largest, most successful, and arguably the most technologically sophisticated of the online travel agencies. If there’s a way to squeeze a profit out of something using technology, you can bet it’ll find it.

A few years ago, I might have given Expedia the benefit of the doubt. There were just so many products it offered on its site, and asking it to do something like Kestan wants seemed unrealistic. But I believe it has the technology to pull something like this off. I also think it has an obligation to make sure these “misunderstandings” — which only benefit Expedia — don’t happen.

“What is most upsetting is that Expedia is allowing customers to believe they are renting a car at a price of $14 per day and when they arrive in Israel the charge is more than three times the price,” he says.

I agree.

I contacted Expedia on his behalf. Here’s how it responded:

The customer service team has taken a closer look at Mr. Kestan’s case and has confirmed that a refund was processed for the insurance not honored by Hertz in the amount of $72. In addition, Expedia is offering the customer a $50 travel voucher for future travel.

A $50 travel voucher is nice, but I’m not sure it’s enough.

Is mandatory car rental insurance a "bait and switch" scheme?

View Results

Loading ... Loading ...

Note: We are experiencing some latency with new comments posting today. We’re working on a fix. Thanks for your patience.