I already have auto insurance, so why is Europcar forcing me to buy it for my car rental?

When Allison Blake rents a car through Hotwire for her trip to Mexico, she is forced to purchase auto insurance coverage even though she already has it through Allianz. Can our advocates persuade Hotwire to refund Blake the cost of the insurance she didn’t need?

Question: I recently arranged a trip to Cancún, Mexico, for my family through Hotwire, including a car rental, and purchased travel insurance through Allianz on Hotwire’s recommendation. The total cost of the car rental was supposed to be $84.

But when we arrived at the car rental facility in Mexico to pick up the car, we were told that our auto insurance coverage through Allianz wasn’t valid and we would have to purchase insurance through the rental agency if we wanted a car. The agency was unwilling to provide us with any transportation back to the airport terminal, so we were forced to pay for rental insurance through Europcar for $527.

When I arrived home, I called Allianz and Hotwire to find out whether it was true that my travel insurance was invalid in Mexico. Allianz’s representatives were helpful and assured me that the coverage I had purchased through their company had been valid. Hotwire’s personnel, on the other hand, were antagonistic.

One Hotwire agent told me that Hotwire would grant me a refund of the price differential between the $84 I had purchased through its site and the $527 Europcar had charged me, but Hotwire later claimed it made me no such promise. It also claimed that the Allianz coverage recommendation on its website was a “glitch.”

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Can you help me get Hotwire to honor its promise and refund me the cost of the insurance I didn’t need? — Allison Blake, Acton, Mass.

Answer: A rate difference of $443 is a huge glitch. And it’s a weak excuse for Hotwire to make for your terrible experience in Mexico.

Unfortunately, there was a gap in communication as to what auto insurance coverage you needed in Mexico.

As our advocate pointed out, the policy you purchased from Allianz included a collision damage waiver (CDW), which is not technically insurance but would have paid for damage to your rental vehicle up to the covered amount. However, it did not include third-party liability coverage, which would have paid your liability, up to a maximum, for any medical care or property damage sustained by a third party if you were found to be at fault in an accident while driving the rental car. Such liability insurance is more expensive than CDW coverage.

Mexico is one of the few countries that does not incorporate third-party liability insurance coverage into its car rental rates, so car rental agencies advertise vehicles at a low rate and then require a large additional amount for the third party liability insurance.

Hotwire’s terms of use contains the following disclaimer: “Some international car rentals have mandatory insurance requirements that result in additional charges at the time of pick up.”

Europcar’s terms and conditions contains the following provision regarding third party liability insurance coverage:

We are mandated by the laws of all of the countries in which we operate our vehicle rental services to insure our Vehicles against liability for the claims or actions of Third Parties. We have purchased the best Third Party Liability insurance from the foremost insurers in the business and it is automatically included as part of our vehicle rental services. You will therefore, as a matter of course, be covered up to the level legally required by the country in which you are renting the Vehicle for the consequences others may suffer as a direct result of your actions whilst you are driving the Vehicle.

Since Mexico mandates purchasing third party liability insurance coverage when renting vehicles, unfortunately, you could not avoid having to pay the high rate for it.

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But we agree with you that all the costs of renting a vehicle should have been disclosed to you by Hotwire at the time you reserved your car. You should not have been caught unaware when you arrived in Mexico to pick up the car. Also, Europcar should not have required you to buy additional CDW coverage in order to rent its cars, as it is not legally mandatory, and neither Europcar nor the rental agency should have told you that the coverage you had was not valid when it was.

Although you might have escalated your complaints to Hotwire and Europcar using our executive contact information, you asked our advocates for assistance in seeking a refund of the price differential between the two daily rates you were charged for insurance coverage.

Because you were forced to buy Europcar’s CDW in order to rent a car in Mexico, Allianz agreed to refund you the cost of the insurance it sold you before our advocates became involved in your case.

Yours is not the only case we’ve recently seen where Europcar has forced renters to purchase CDW coverage in addition to third-party liability insurance. We reached out to Europcar on your behalf with regard to the CDW coverage it required you to purchase, but the only response we received was an invitation for you to ask Hotwire for a refund of the cost of the CDW coverage.

We followed up by asking Europcar why it is demanding that renters buy CDW coverage and whether its suggestion that you contact Hotwire indicated that it would reimburse you for the CDW cost, but we received no response.

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We can only warn car renters about Europcar’s practice of charging for both third party liability insurance and CDW coverage even when the CDW isn’t legally mandatory.

Jennifer Finger

Jennifer is the founder of KeenReader, an Internet-based freelance editing operation, as well as a certified public accountant. She is a senior writer for Elliott.org. Read more of Jennifer's articles here.

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