One of the pervasive fears among our team has been another party damaging one of our rental cars. We're conscientious drivers, tend to park remotely, and even have off-street parking available in most places we drive. That's all because we know one hard truth about rental cars -- when a renter signs a contract to give a company a few dollars to borrow a very expensive asset, the renter is responsible for returning the vehicle in effectively the exact same condition. The rental car company doesn't care about the source of any damage. So just what happens if someone else damages our car during a rental?
Hit and Run When Drivers Have no Integrity
A recent story out of Lawndale, California is really only exceptional because the damage to a rental car was caught on video. Otherwise, the report from the Los Angeles Daily News is just another show-off causing an accident and driving away from the scene. The vehicle damaged in the hit-and-run accident just happens to be a rental. And while we think Los Angeles County Sheriff's Department is way off with their belief that the suspect vehicle in the video might be a Pontiac Fiero, the basics of the story are relatively familiar.
- Non-professional stunt driver crashes their car into another (in this case, a rental),
- The driver the caused the damage quickly leaves the scene.
- Without a party assigned responsibility, the rental car customer's insurance gets stuck paying the bill for any damage.
There's one part of the Daily News story that doesn't make any sense to the AutoSlash team; why did the rental car user get stuck paying $1,000 for the insurance deductible? In our primer on rental car insurance, we mention that most coverage provided by credit cards is secondary, which means the credit card almost always covers up to the insurance policy deductible. So getting stuck paying the insurance deductible means one of two things:
- The renter didn't read about potential coverage offered by her credit card, or
- The renter didn't use a credit card for payment and thus had no protection when renting a car.
In either case, this story is a great illustration of why we remind users to read and understand if there's any coverage provided by their credit card issuers! None of us want to drop an insurance deductible to repair a damaged rental car! And even if the credit card covers up to the insurance company's deductible, we really don't want to see any damage to a rental car reported to our insurer, as that would impact future insurance premiums.
How to Avoid the Tab for the Actions of Others
The rental car companies have an idea on how to absolve responsibility for damage to a rental car; purchasing either the horrendously priced Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW); we have a better idea.
Our team members spend a lot of time in rental cars and have made a conscious decision to adopt credit cards that provide primary coverage when/if there's damage to a rental car. With a low-cost credit card such as the Chase Sapphire Preferred (not a sales pitch, just a fact), we're able to pick up benefits such as trip interruption insurance and primary rental car damage coverage. All credit cards include specific terms about limitations and exclusions -- I can't expect coverage if I select the Nashville Airport's Maserati -- but if anything ever happens to a normal rental car, the card covers the claim and our insurance premiums don't take a hit (even if our car does take a hit)!