Rental Car Companies

How To Note Damages On An Inspection Sheet, Damage Waivers And Tricks Of The Trade

 

Maybe you are on a business trip and have flown to your destination and need a car to get back and forth to the office. Maybe your car has been damaged by a hit and run driver, and you are having to rent a car while yours is getting repaired. Whatever the reason for renting a car, please take heed to the message I am sending in this article.

Rental car companies are tricky!

I use the word tricky because it is the nicest word I can think of to describe what some rental car companies do. Here are some very good tips to use when you are forced to utilize a rental car.

Tip #1:  Make sure you are covered!

First of all, make sure your auto insurance policy will cover a rented vehicle. There are new policies out there that have endorsements added to them that alleviate the insurance carrier from “contractual” liability a.k.a. rental car agreements.

Tip #2:  Inspect, Inspect, Inspect!

Make sure, and I mean make sure, you insist on a pre-rental vehicle inspection form being filled out and get a signed copy of it from a rental company employee (and that employee’s business card if possible). This is normally a sheet that has a very simple drawing of a vehicle on it which the rental company will rush you through filling out. They will normally ask you to place an “x” anywhere on the picture where you see damage on the vehicle.

 Tip #3:  Take your time

During your pre-rental inspection of the vehicle, take your time! Don’t let them rush you and do not miss anything at all, no matter how small it seems. I have experienced rental company employees suggesting that certain damages don’t need to be written down on the inspection form because they are too small to worry about. Do not believe it. Write down everything.

In fact, here are some common areas people miss:

  • Windshield chips and cracks.
  • Stains or tears in the interior upholstery.
  • Rock chips on the front bumper cover or hood.
  • Scratches on the rear bumper.
  • Door handle on rear doors or passenger side doesn’t operate.
  • Rearview mirror is loose.
  • Wheels have scuffs or scratches on them.
  • Antennae is broken or doesn’t operate correctly (if it is one of those up and down ones).
  • Minor door dings.

 Tip #4:  If your insurance doesn’t cover contractual liability, then either bite the bullet and purchase the “damage waiver” from the rental company, or be warned!

 

Okay, so the point is that you might not have coverage for damage to a rental vehicle, and even if you do, make sure that the damage that is already on the vehicle can’t be claimed against your insurance policy. As an insurance adjuster for companies that excluded contractual liability and for companies that paid it, I have seen some crazy claims made by rental companies. I won’t name names, but some of the larger rental car companies are the worst about trying to generate revenue by making what the industry would call “non-meritorious claims”, but not provable as fraud.

An Example

Here’s a new set of numbers reflecting a scenario that I have seen a hundred times or more:

  1.  The renter rents a car (doesn’t see any damage and probably just signed off on a damage inspection form without even knowing it or didn’t notice the little stuff) and has an uneventful trip.
  2.  The rental vehicle is returned to the rental company as it was before the trip.
  3.  The rental company now goes over the vehicle with a fine toothed comb and locates three door dings, multiple scratches on the rear bumper, and three chips in the windshield that have to be repaired. They get the damages estimated and total damages are $742.00. On top of the repair cost, the vehicle will have to be in the shop for three or four days to get all the repairs done, and during the time the vehicle is in the shop, the rental company is “losing money” because they can’t rent the vehicle out.  This is another $120.00 of lost earning potential, and they might even try to claim that the car since it has to be repaired will have suffered some inherent diminished value. Oh, and don’t forget administrative fees because of the time they had to spend preparing the claim and such, that’s another $50.00. They will try whatever they can to make a buck or two at your expense.
  4.  The rental company (if you didn’t get the damage waiver) then makes a claim against your insurance company for the damages (now at over $1000.00) plus the $100.00 it cost them to get the damage appraised.
  5.  Your insurance company (if there is no endorsement relieving them of contractual liability) will have to “entertain” the claim.
  6.  During the entertainment phase, your insurance company is supposed to contact you to see if they can find out what happened (even though no matter what happened you owe the damages because of the rental contract which says you do).
  7.  Since you have no idea what happened and hadn’t read this article, so you don’t have a copy of a pre-rental inspection form showing all the damages were already there, your insurance company will likely make a payment for around $500.00, the real cost of the labor associated with repairing the rental vehicle.
  8.  If you tell your insurance company that the damages were there when you rented the car, and they refuse to pay the rental company, then the rental company will get mad that their trick didn’t work, and they will try to collect the money directly from you, and could even attempt to get it on your credit if you don’t pay. If that happens to you, my advice is to look into your legal remedies under the deceptive trade practices act or consult an attorney.

 

Don’t Get Taken By The Trick

To conclude, by being “tricky”, and being nice to you when you are renting the vehicle as well as when you turn it back in, the rental company has taken advantage of your confidence in them, and either fixed all the wear on their rental vehicle or simply pocketed the money (and will do the same thing on the same vehicle over and over again). All this done at the expense of your claims history and insurance premiums. Did you know that even if an accident is not your fault, it still counts against you if you have to use your own insurance? Most insurance companies assign a point system to the type and severity of a claim.

If you get run into two or three times within a year or two (through no fault of your own), or if you are the victim of theft or vandalism, you can bet that you will be flagged as a high risk because of your “luck” and will eventually have a higher premium. Additionally, most insurance companies have the right to just cancel your policy flat if you have an accident within the first 30 to 60 days of the policy term, even if the accident is not your fault. Don’t let a rental car company trick you, embarrass you, or cause your insurance rates or credit score to be negatively affected!

Posted in: Auto Accidents, General Claims