Are car rental companies forcing you to buy insurance you don’t need?

Every road leads to ... a surcharge? / Photo by John Peacock - Flickr
Question: My wife rented a car at the Orlando airport from Budget recently. Even though she said she did not want or need the extra loss damage waiver insurance, she was informed that her car insurance was “invalid” and that in order to rent the car she needed Florida insurance.

She reluctantly accepted the loss-damage waiver. It was on the flight home she noticed the paperwork stated she did not need the insurance. I contacted Budget and it sent me a form denial, saying, “We have checked our records carefully and find that the LDW or CDW option was offered to you, and you indeed signed the agreement.”

Can you help us get our money back? — Todd Ramsdell, Omaha, Neb.

Answer: It sounds as if Budget pulled a fast one on your wife. The employee’s statements contradict the company’s own website, which clearly says the loss-damage waiver is optional, and “if you don’t need LDW, don’t buy it.”

Elliott Advocacy is underwritten by Allianz Travel Insurance. The Allianz Travel Insurance company has built its reputation on partnering with agents all around the world to provide comprehensive travel insurance for their clients. Contact Allianz Travel Insurance for a comprehensive list of coverage.

I don’t know what happened to your wife at the car rental counter, because I wasn’t there. But I’ve heard stories about the white lies car rental employees tell customers in tourist towns like Orlando and Las Vegas.

They apparently prey on people who look like they’re from out of town and don’t know any better, trying to upsell them on profitable insurance policies. By the time the scam is discovered, it’s too late — they’re on a plane back home. Out of sight, out of mind.

Is that what happened to your wife? Maybe. What I am certain about is this: She bought insurance she didn’t need.

Of course Budget’s records will show she signed the agreement. Everyone does. But Budget can’t know what the employee told your wife before she did, and that’s the important thing. Did Budget refuse to rent her a car until she purchased the loss-damage waiver agreement?

The only way to prevent this from happening is to know your rights. Insurance is an optional product. Your wife was covered under her car insurance and chances are, her credit card offered her some protection, too. There’s no such thing as a Florida insurance requirement, at least as it applies to your wife’s rental.

I contacted Budget on your behalf. It called you, apologized, and refunded your wife’s insurance policy.

64 thoughts on “Are car rental companies forcing you to buy insurance you don’t need?

  1. Car rental agencies are among THE most corrupt businesses in America today.  Between the fraudulent damage claim scams and the lying about unneeded insurance scams, they are stealing millions from travelers every year. 

    While I’m not an advocate for a nanny government, I am getting sick and tired of reading these stories week after week of these crimes perpetrated against us.  Something needs to be done.  I don’t know the answer, other than for we as consumers to take the initiative to be as educated as possible, and protect ourselves.

    Take time-stamped pictures before you drive off the lot, and when you return. If you get a damage claim after-the-fact, refuse to pay it, report it to the Insurance Commissioner and the state’s Attorney General. Investigate insurance requirements for where you are going to be renting, and don’t give in to the lies. Refuse to be ripped off.  Stand up to these criminals.  If these tactics weren’t profitable, they wouldn’t keep doing it.

    1. I would also file a complaint with the BBB.  Regardless of the outcome, the complaint goes on their record.

        1. I’ve never tried to use the BBB against a national business, but I’ve actually had some success with them in dealing with small businesses.

          Or it could simply be that small businesses still actually care about their customers in the end.

  2. Car rental agencies are not above outright lying to sell you the CDW.  That’s because they know it’s almost pure profit.  I had an Enterprise agent in Pensacola tell me that my insurance wasn’t any good in FL because it’s a “no-fault” state.

    It happened again at a different rental agency. I pulled out my iPod, hit the video record feature and asked the agent to repeat himself. He changed his tune pretty quick.

    1. Brilliant, Cybrsk8r!  You ROCK!  That’s what we ALL need to do!  If they’re speaking the truth, they certainly can’t object…

  3. It’s a shame that it’s come to this, but the best way to fight back is to be informed. At the very least, phone up your car insurance or credit card on the spot to verify. Have the agent sign something to the effect that s/he is denying you the rental if you do not buy their insurance. Knowledge is power. I think this is the human equivalent to the pre-ticked checkbox.

  4. I have a different take on this.  Are some car rental companies guilty of this behavior?  Without a doubt. My question is, how prevalent is this in non-tourist towns?  I grew up in a tourist town.  Tourists are generally reviled.  Tourist towns often develop a culture of commercial thievery, i.e. prey on tourist at any opportunity.  Whether its taxis taking the “scenic” route to get a higher fare or business charging higher prices to out of towners, the car rental scam may just be a symptom of a larger problem in the locale

    1. I also wonder how prevalent it is even in tourist towns. Granted, it was only one time each, but I’ve rented from Enterprise in Orlando and Reno, NV. I had no problems with either location.

    2. You’re dead-on regarding the “tourist town” mentality.  I live near a major tourist destination in Connecticut, and the price-gouging that goes on is disgusting. And then there’s the “Mystic Mariott,” which isn’t in Mystic but next to an industrial park in another town.

  5. The solution to dealing with car rental companies, especially if you fall for high pressure sales tactics is to join the loyalty program (Chris is cringing) and limit your rentals to locations which allow you to bypass the rental counter.  As such you will avoid most if not all of the sales tactics and certainly the high pressure ones.

    1. Good advice, but I’ve found that even the locations that drop you off at the car still make you deal with an idiot as you leave the lot. I was bugged to buy extra insurance in BOS two weeks ago by an Avis worker who was at the gate. He was well schooled in the high pressure sales nonsense and let me tell you…it’s easy to feel trapped sitting in a car talking to a guy in a booth who won’t just push a button to raise the barrier.

      They are getting trickier…

  6. What if you wrote next to your initials. Under duress because “Name of employee” said I could not rent the car without paying for this insurance.  Be interesting to see the look on their face after you did that.

  7. They’re not forcing you to buy it.  You need to be informed enough to know that you don’t need it.

    1.  If you show up and the agent refuses to let you have the car without buying insurance how is that not forcing you to buy. 

      I once rented a U-Haul. The owner said point blank, she didn’t care what U-haul corporate policy was or what the law was, she owned it and if I wanted the U-Haul I had to buy the insurance.  I knew my rights but I had absolutely no way to enforce them at that time. And giving the time constraints, (and pre-internet), getting another U-Haul was not possible.

      1. Exactly. Plus, consumers should be able to trust that businesses are not telling them outright lies. The biggest issue here is that Budget told the customer something that was 100% not true.

    2. Sadly, that isn’t true. I declined all of the insurance options, and the clerk entered it in to the system that I’d agreed. Most people work on trust and don’t expect to be scammed by a household name company. I got scammed by Budget at Orlando airport after a 10 hour flight from the UK after my family was made to wait for 15 minutes. This is a criminal operation. Perhaps you think ‘Wolf of Wall Street’ is ok too?

  8. It makes you sick to see how low car rental companies will go to make a buck. I cancelled my rental in Florida for this very same reason because I don’t trust them. Instead of traveling around Florida we picked one resort that will pick us up at the airport take us back at no charge.

  9. God, I hate MCO. So many reasons, but their car rental people are probably the worst in the business, even at my usual rental place. I’ve got super-bend-over-and-kiss-my-boots status on Avis due to the amount of rentals I use a year.

    Still, at MCO, some shady high school dropout will try and tell me that my insurance isn’t “valid” in Florida. Or worse, try to get me to tell them what my deductable is in passing conversation. They do that to perpetuate the next scam on the list: Oh, you have a ding that’s just $2 shy of your deductable!!!

    Imagine that.

  10. We recently rented a car through Budget in the Dominican Republic.  We used the travel agent at our local AAA office and bought a car insurance policy for this rental at the same time. Upon arriving in Santiago, the desk agent flat out refused to honor the car insurance, refused to release the car until we bought the Budget insurance.  We called home when the AAA office opened and tried to cancel their insurance – not successful with that either.  Kind of a double whammy.  Budget’s US office was useless also. Told us they had no control over what happened in the DR.  But then the AAA travel agent was also useless in intervening with any of the insurances.

  11. and they also put a hold on ur credit card??? i recently rented from enterpise for 2 days it was to be $32 per day including all  xxtra surcharges and taxes
    but they put a $200 hold on my credit card… not nice not good pr or customer no service.   

      1. I usually rent from Alamo & they only hold the amount of the rental here in the States.I just spoke with an Alamo agent & he confirmed that policy.

      2. it was going to be at most $62  so did not need to put $200 on it esp with AMEX  and the rental guys were obnoxious here in orange park fl

        1. That’s in case you  bring it back late, don’t fill up the tank, forget to pay at toll, etc.  That’s just standard procedure and the amount is disclosed in the terms of conditions of rental. Its neither hiddennor unusual.

    1. Uhh…that’s standard procedure, bro.
      Hotels do the same thing. It’s to cover “incidental” charges, generally 10% over room and tax.

    2. Rented from Hertz last week.  The total rental was $75.  They put $575 hold on the card.  Wonder if they were going to try the “you caused $500 damage” scam on me.  They didn’t and the hold cleared 2 days later.

      1. Hertz generally places 2-300 holds. Sometimes the holds seem larger because they use the undiscounted rate to determine the hold amount.  So if you have any free days, discounts, etc, the”hold” won’t always be reduced accordingly.

  12. The car rental companies pay a bonus to desk agents based on the insurance sold and the agents are pressured to sell the product because if they fall below a set percentage of insurance sales their employee performance rating is downgraded.  This is purely a corporate greed and lack of integrity issue. 

    I always refuse, and am frequently assigned a damaged vehicle as a result – and always go back to the counter and demand an undamaged vehicle.  If refused I use my phone to video the agent face and name tag and restate the problem and they ALWAYS have caved in and assigned me an undamaged vehicle.

    Florida and Vegas are especially bad.

  13. Car companies and airlines are part of travel. They will make every profit that they can at anybodies expense. Commision is made by selling their insurance and part of being employed, is to sell their insurance. People that do not know get ripped. Job security for Elliott.

    1. as long as people are still lying, sniveling jerks that work in teh travel industry then yes, Elliott will have job security.  and there are evidently still a LOT of people in the world who need him to request a refund on their behalf because they were scammed by a scummy car agent in a scummy shirt and tie.

  14. I almost got scammed at MCO by Dollar – and I’m an attorney who always, always reads everything I sign.  I was standing at the rental counter with two tired kids, it was 1am, and the rental counter guy wanted me to sign an “electronic” signature box which then prints your signature onto all the forms.  You can’t read anything until you sign and he hits “print.”  I was standing there with my rental quote in hand and everything he asked me, I replied “I just want what’s on this quote, nothing more.”  He tried to upsell me a bigger car, I said “no, I want what is on this quote.”  Finally, he went to hand me keys, stated briefly “you’re getting exactly what’s on the quote” and as I started to sign he mumbled something about insurance being “only the legally required Florida minimum.”  I stopped signing, said to him “what are you talking about, what legally-required Florida minimum?” and he stated I was signing for the quoted amount PLUS the legally required Florida minimum.”  I completely freaked out – started saying “NO, NO, NO, NO!  That’s not on my quote, I’m not paying anything than what’s on my quote.”  I freaked out so badly (and everyone behind me in line thought I was a CRAZY person that he finally said “ok, ok” please just sign!  He was practically begging me to go away.  I can’t believe you’re expected to sign an electronic pad BEFORE they print it all out – you can’t see what you’re signing until AFTER it’s printed (with your signature on it).  Totally, completely and utterly ridiculous!  I couldn’t believe how close I came to signing for “legally required, mandatory Florida minimum insurance” whatever that is…..

    1. I’m finding more and more businesses that require electronic signatures.    I get the feeling sometimes they verbally tell you it is one thing while you are actually “consenting” to something else.    I think these will eventually cause a lot of lawsuits from copying and pasting the signature onto any document they choose.   Then it is going to just be one word against the other.

      1. Done correctly, electronic signatures can’t be modified.  They will become invalid if they are moved or if the original document is modified in any way.  But it is hard to know how they are doing the eletronic signatures and if that particular program has integrity.

    2. Thanks for this info. I’ve just raised a credit card dispute after being scammed for insurance optional extras in exactly the way that you’ve described. Sadly, I signed and realised that the clerk had added optional extras that I’d verbally declined afterwards.

  15. But I’ve heard stories about the white lies car rental employees tell customers in tourist towns like Orlando and Las Vegas.

    Theft and deceit masquerading as a “white lie” is reprehensible.

    1. I actually had the best rental experience in Orlando.  They didn’t push me for additional coverage at all.  They asked, I said “no” and that was the end of it.  When I returned the car, they barely looked at it.  I  think all they did was make sure the tank was full.

  16. same thing happened to us in tampa.  i even brought my own car insurance paperwork which the agent asked to see. i told my husband that that was weird, & a first for us. he also has a platinum amex, which like many cards, gives coverage. the agent goes into coverage for the deductible & that it’s spring break time. my husband just wanted to get out of there so he bought. we have NEVER bought. my kids were in west palm a couple of weeks prior, but weren’t pressured with the “florida” law.

    1. He wanted to see your insurance so he could see what your deductable was so if you didn’t buy their insurance you could be charged for “damage” that amazingly was just a few dollars less than your deductable on return.

  17. My point is made.  Look how many people have had this scam attempted or perpetrated on them right here in this comments thread.

    Rental car companies, take note:  the word is out.  You are corrupt and criminal, and we know it. 

    I agree that the best approach is to threaten to video the scammer saying the lies.  The last time some weenie at the counter (in OKC) told me the insurance was required, I pulled out my iphone, looked him right in the eye and said “You’re a liar.  Now say it on camera so I can send it to your corporate office and get you fired.  Or arrested for trying to scam me.”

    He caved, of course.

    By the way, Oklahoma City is not exactly a tourist mecca, and yet it happened to me there.  So I don’t think it’s all about trying to screw the tourists.

  18. Chris
    This would be a good opportunity to discuss the ripoff Dollar used on me in Germany when it demanded a written statement that my (Platinum) MasterCard covers LDW in Gedrmany.  Of course, I had no such statement on me.  As a result the rental fee virtually DOUBLED.  Incidentally, when you look at the Dollar web site it clearly states “LDW is optional”. (Chris: 

    Remember I sent you details and copies of email about this in August of last year)

  19. They’re not forcing anybody, but they hard-sell it for sure.  Your advice is right on the nose, Chris.  Gotta know the facts before you’re out there travelling … and be prepared to stand up for yourself.

    1. What part of telling the customer that she is not allowed to pick up a car without buying the insurance isn’t “forcing”?

    2. You’re wrong – they ARE forcing people…or at least they are attempting to.  When you are in a far-away city in the middle of the night with all rental agencies sold out, and no way to get to your hotel without a rental car, and the dweeb at the counter tells you that if you don’t buy the insurance you don’t get a car, if you don’t know your rights then you will feel forced.

      But you are right that if you know the facts then you can stand up to them, as I did.  Just take out your cellphone and ask them to repeat their illegal demand on video.  That should do the trick.

    3. They forced me. I declined the insurance optional extras verbally, and the clerk entered that I’d accepted them. Very few people would expect a clerk of a household name company to falsely enter information. This is deliberate fraud.

  20. My family is going on a Disney cruise in October.  I am renting a car through Avis at MCO. My company has an AWD number, plus I have a Wizard number.  When I went to the special Avis Leisure Pass website to book my reservation, I saw the following:  

    “Avis takes care of your business travel, let us take care of your personal
    and vacation travel too! Use Avis Worldwide Discount number
    B12XXXX to save up to 25% off.  

    Note: Loss Damage Waiver (LDW) is included at no additional charge
    on personal rentals made using your Avis Leisure Pass AWD number at
    participating locations. Other benefits, such as extended liability
    protection that may apply for rentals under your corporate account agreement, do
    not apply to personal rentals made using your Avis Leisure Pass AWD
    number.”I’m thinking about printing this page out and putting it with my reservation paperwork since it’s basically saying that LDW is included in my reservation.  I’m kinda hoping that the Avis employees try to hard-sell me or tell me that LDW insurance in required in FL!

    1. The key words are “at participating locations.” 
      You can bet that where ever you rent it will turn out to not be one of the participating locations!

  21. We NEVER take travel insurance when we rent a car (very rarely).  We tell them our American Express covers it.

  22. “I once rented a U-Haul. The owner said point blank, she didn’t care what U-haul corporate policy was or what the law was, she owned it and if I wanted the U-Haul I had to buy the insurance”

    “Upon arriving in Santiago, the desk agent flat out refused to honor the car insurance, refused to release the car until we bought the Budget insurance”

    These are not scams. These ones are breaches of contract. Whether this works nowadays I don’t know but one talk show host 10 years ago suggested calling the corporate headquarters saying, “If you don’t rent me the car(truck) I will go somewhere else and rent one and hold you civilly liable for the difference.

    By the way, regarding the agent saying your own insurance is invalid, you should verify that your own insurance is valid for rental cars before going on your trip. You don’t want to get into an accident and later find that your own insurance company says you are not covered.

    1. Then you do not understand the concept of scam.  A breach of contract is merely an inability or unwillingness to perform the contract. No moral or ethical precepts are necessarily involved.

      By contrast a scam occurs when key information is purposely withheld by one party to later extract greater concessions (read:money) from the other party than what is agreed upon in the contract.  This key information could be a lie of omission, (failing to disclose a mandatory charge), or a lie of commission (falsely asserting that the law requires insurance).

      In the case of U-Haul, her mandatory insurance rule was not presented to me at the time of booking otherwise I could have checked other places while there was still inventory.  I only learned of it when I went to pick up the U-Haul.  It was the last day of my lease, my friends had all arranged their schedules be free to help me move, so declining the rental was not possible. Getting a U-haul in Los Angeles, in August, on a Saturday, without notice, is impossible  I suspect most people who rent from U-Haul are in the same boat.

      Same with the Budget rental place.  Its a scam because the rep is lying to you knowing that under the circumstances it is highly unlikely that you have the means to dispute his/her lies while at the counter. 

      The talk show’s advice is silly.  That threat will barely register for two reasons.  1) Threats of legal action are referred to counsel for response, rarely the front desk and 2) To carry it out you would have to sue in small claims court and quite possibly return to the location and  you wouldn’t recover your travel expenses.  An unlikely scenario.

  23. If I could beam one piece of car-rental wisdom into the head of every traveller, it’d be this: ask around at work.

    Seriously. More companies than you can imagine have car rental contracts with one or another of the big companies. The bigger the company you work for, the more likely it is they have one. Many times you can join the loyalty program (like Avis’s Preferred, Hertz’s #1 Club or National’s Emerald Club) and they will extend the insurance courtesies to you even when renting privately.

    Obviously, check with your work first to make sure this is acceptable—you don’t want to rent a car “for work” while you’re on vacation and stick the company with a repair bill—but you might be surprised… and then you can literally walk past the counter, throw your luggage in the car, and drive through the gate.

  24. I had a similar situation in Tampa. Even though I knew for sure that my platinum card covered the insurance on my rental, the desk clerk insisted that it didn’t and threatened dire consequences if I refused to buy their coverage. I not only refused but wrote my refusal on the contract, just in case the little worm tried to pull a fast one.

  25. The insurance is a scam. You can get a credit card with FREE primary rental coverage or make sure your regular policy doesnt cover rentals and then use a credit card that offers the insurance. Check the fine print if you are overseas as many dont cover certain countries etc. I saw a women bullied into full insurance last week in NY (Budget) It was 32.00 a day. Even if she wanted insurance, she could have the basic coverages for 15 a day. She was Canadian and they took advantage of her with contents insurance and all sorts of nonsense.

  26. horse bleep.  I’ve been renting cars on average twice a year since before I was even 25.  the agent flat out lied to them to make a few extra bucks.  don’t get me wrong, in some instances, the insurance really IS worth it (though I’ve never once needed it, just did a mathematical assessment of the risk and decided I was beter off).  in most cases, not.

  27. Just back from holiday in Orlando, where I rented from Budget Car Rental. Got scammed on insurance optional extras. Their modus operandi was:-

    1. Keep me and my family waiting 15 minutes after a 10 hour flight

    2. Ask me verbally whether I wanted insurance optional extras. I decline verbally

    3. Clerk enters that I wanted 3 out of the 4 insurance optional extras in to webforms

    4. Clerk tells me that to speed up my journey, she’s entered the information for me and I simply need to click “Next” through a range of webpages and electronically sign

    On returning the car, I get a receipt telling me they’ve taken money from my card. Confused and don’t have rental agreement so don’t take up at airport. Get home and check rental agreement and see what they’ve done. Contacted Budget who told me they weren’t privy to conversation with Clerk, I’d signed agreement, so tough luck buddy.

    There is clear criminal deception going on here. The company has already been investigated by the Royal Canadian Mounted Police when their own employees whistleblowed that the company was scamming tourists.

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