mille1j

Wanted to share an FYI experience with you all.

About two months ago I was in an auto accident. I was driving my personal vehicle and the other driver had an Alamo rental. We exchanged our information and went on.

About a month later Alamo contacted me about a balance due, and I instructed them to discuss it with my insurance company.

I spoke with my adjuster, who said he had settle the property damage claim, but Alamo was also trying to collect "administrative fees". He had asked them for documentation, which they refused to provide.

Alamo called two more times. Each time I instructed them to contact my insurance agent.

Then, through their collections department "Damage Recovery Specialists" they sent a letter demanding payment of about $300.

I filed complaints with the BBB and my state attorney general's office, sent the letter to my insurance company, and responded to alamo with the following points:

1. Unless they have a contract, settlement, or judgment against me, there is no debt to them that I am responsible for.

2. If this is a liability claim, they need to settle with my insurance company or take them to court.

3. Per the Alamo rental agreement: "Alamo holds the renter responsible for the safe return of the rental vehicle in the same condition as it was rented, except for normal wear and tear. Unless prohibited by law, a renter may be held responsible for all damages, including loss of use, should the vehicle be damaged in an accident, stolen or vandalized. This is the case regardless of fault. Whether who is at fault in the accident, the renter may be asked to pay for the damage up to and including the total cost of replacing the vehicle in case of a total wreck or loss.

Since this is the renter's responsbility, not mine, he needs to submit a claim with his insurance company who could enter into subrogation with my company for reimbursement (very standard in auto insurance)

Soon after, i received correspondence from the BBB that Alamo was waiving the charges "in the spirit of compromise and customer service"

They pretty much make these fees up and hope you pay them. It turns out that every time my adjuster asked them for substantiation of these fees, Alamo called me instead (and probably the renter also) hoping that one onf us would just pay. Apparently, substantiating the fees to the insurance company is either too much work for them, or just not possible?

Anyway, I've been asking a lot more questions about rental cars and discussed this thoroughly with my insurance agent:
1. He strongly felt that these administrative fees were completely bogus and believed their collection to be illegal in my state. It also seems they are worth contesting vigorously.
2. If you have great personal auto insurance, there is absolutely zero reason to purchase ANY coverage from a rental car company in the United States (for international, you should talk to your insurance agent prior to the trip to inquire about coverage). Frankly, if you are a frequent renter and worry about liability, you can buy yourself a 1-2M umbrella for about $100/year and be much better off.
3. Additional driver/renter charges are also completely bogus and I was assured that I (along with ANYONE else i permitted to drive the rental car---but do check your permissive use coverage here) was completely covered. These fees are really only relevant if you do need to purchase insurance from the car company and need it to apply to another driver. Otherwise, it is a scam.

So, here is my protocol when i rent a car:
1. I decline all coverage, all additional drivers. I installed tomtom on my iPhone and bring a GPS windshield mounting cradle for it. We bring our own carseat. I sometimes prepay for gas, especially when my baby is with me and it can be painful to tank up before return.

2. I bring my reservation made online with me to the pickup

3. I PHOTOGRAPH and/or VIDEOTAPE the condition of the car using my iPhone when I pick it up and drop it off.

MR_MAMA

What does this have to do with Delta?

obscure2k

As this thread is not Delta-related, I am moving to the "Other Car Rentals' Forum.
Please follow there.
thanks...
Obscure2k
Delta Moderator

jackal

You're talking about two separate issues in your post. Let's not get them mixed up.

1) You caused damage to someone who was renting with Alamo. Alamo filed a claim with your insurance company and then sought payment for the unpaid balance.

2) Even though it has little relation to your own experience, since you were not driving a rental car, you do not approve of some of the items charged when you rent a car, whether it is additional driver charges, coverage charges, or administrative fees collected during the claims process.

As for the first one: I can't really speak to that, since I am not well-versed in the laws guiding responsibility between one and one's insurance company. It may very well be the case that Alamo would need to obtain a legal judgment against you before pursuing you personally, but I cannot speak to that. I'm glad, however, that you got it resolved to your satisfaction.

As for the second one: you're certainly entitled to your feelings, and you're welcome to shop around to find a rental car company that does not charge these. Good luck with that.

You're presenting your views as 100% fact, but they're simply your opinion. Let's take a look at an alternate view on your first three points:

1. Assuming the collection of administrative fees is not illegal within a given jurisdiction, the rental company has every right to charge an administrative fee (whether it is paid by the renter or a third party). If everyone paid promptly and didn't [often untruthfully] dispute charges (or if no one damaged cars in the first place), there would be no need for a claims staff; it could be handled by an automated machine. But your and your insurance company's very actions show why the administrative fee exists: the rental agency had to make multiple efforts to collect, and this is not free. The time spent by the rental company's claims agent, the staff to move the car to and from the body shop, the accounting office to bill out the charges and handle the money, etc., all costs money that the agency wouldn't have to spend if the drivers involved in the accident were more careful.

2. Zero reason? How about wanting to avoid paying a deductible? How about wanting to avoid raised premiums (or a cancelled policy, depending on your past history)? How about being OK with paying a premium for the convenience of avoiding hassle? It's up to each customer whether he or she thinks the relative cost of the products outweighs some of its relative benefits, but there is hardly "zero" reason to buy things from the rental company.

3. Additional drivers actually do represent two increased costs to the rental company: for one, multiple drivers means the car is statistically likely to be driven more, resulting both in higher risk for damage and also higher mileage (which the rental agency isn't recovering from you, since most rates are unlimited these days). And two, when multiple drivers are on the rental contract, the claims process can get really messy, with a LOT of extra finger-pointing about who's exactly responsible for what. That's not free for the rental company, either.

As for the assertion that you don't need to list someone on the rental contract for them to be covered: well, why don't you report back after you've done this and the non-listed driver is at fault in an accident? I've seen insurance companies use ANY excuse they can to get out of paying for a claim; that's what claims adjusters are paid to do. I've seen too many people having to make payments on a car they don't own and will never see again to believe that an insurance company isn't going to exploit every loophole they possibly can.

Just playing devil's advocate and illustrating the alternate side. It's up to the readers to determine what they want to do now that they have a balance in perspectives.

mille1j

Alamo refused to provide any documentation for the administrative fees, which is the reason my insurance company wasn't going to write a check. Alamo just asked for a certain sum, called it a fee, and hoped insurance would pay. If you want payment for something in a claim, you better be ready to substantiate the claim. If they would have produced a breakdown of their fees, then my adjuster said it may have been paid, but he can't just write out checks to people who ask for money. My insurance agent kind of laughed, he thought Alamo was ridiculous and was just fishing for extra money.

Whether they are entitled to fees, i think is entirely debatable. Individuals involved in accidents are not entitled to collect such fees, and they have to go through the same work and what not. I would argue that companies should not be allowed to collect such things since it should be an ordinary cost of doing business. Opinion, not fact though (although there might be state to state variation on this).

I do agree with you on your point about Zero value. it does have some value, and it is for the reasons you suggest: protecting your own policy, bad driving record, hoping for less hassle. I definitely would not count on the last point. I KNOW what my own policy says, but I just don't have the time to read all the fine print on the rental car's insurance policies and would definitely not feel comfortable trusting them. So I would say that it has zero value to ME.

You DEFINITELY need to read your insurance contract AND ask your agent questions. Having family members in the insurance agency has helped to learn a bit more about what to look for, etc. My policy specifically states that I and my spouse are covered in any 4 wheeled vehicle that we are driving. There is no regard on the part of my insurance agency for who may or may not be on the rental contract, and since they represent me and my wife in any loss, its not really an issue. Jackal, if you rented a car, and I drove it, my auto insurance will cover me, the car, and any damage I do to others or to property. There is not a basis within my policy for a claim to be denied based on who is or isn't listed on a rental contract. The only basis for a claim to be denied is if my spouse and I were driving a car that we OWN, but have not insured with my company, otherwise we are covered in any 4 wheeled vehicle (and any attached trailer) that we are driving regardless of who owns the car. That certainly might not be true of everyone's policy, and I would check into this.

It also is an open question for each to answer as to whether they believe their own insurance is reputable and will fulfill their obligation to represent you in a claim. I believe mine is and I believe they did a good job. Challenging other parties to substantiate claims they are making helps to keep insurance costs lower, and denying a claim because you can't tell the insurance company what the money you are asking for is meant to cover seems pretty reasonable.

It is my opinion though, that many rental car companies, especially deep budget ones like alamo, dollar, national, and some others have very questionable business practices and use scare tactics whenever possible to get people to buy very overpriced coverage that they probably don't really need (and I know that I don't) and it is in my interest to be generally distrustful of them and take measures to protect myself which for me means:
1. knowing the details of my personal auto policy
2. verifying any questions with my agent beforehand (foreign travel is a good example)
3. documenting the condition of the vehicle at the time of rental with photographic proof
4. only paying for additional options that I find necessary.

jackal

I've actually never heard of a rental company trying to collect on administrative fees from the third-party at fault (not saying it doesn't happen, as it obviously did in your case, but just that I've never heard of it). Usually, if the third party's insurance company doesn't pay, the balance due is left at the feet of the renter.

This actually parallels what happens in the private (non-rental) world. The costs that are unrecoverable from the third party at fault are left at the feet of the driver (and his/her own insurance company). The driver must go through all the legwork of getting that money paid by his own insurance company, taking the car to the shop, getting it fixed, getting it re-registered with a salvage title, etc.

In the rental industry, the rental company handles all of that for the driver (i.e. the driver doesn't have to do it on his own), and as such, they charge an administrative fee to cover their costs, which serves as a sort of "convenience fee" for the driver of the vehicle to not have to do all of that on his or her own.

The section describing LDW is quite short, and I would suggest you read it at some point. While I don't have a rental contract in front of me now, the verbiage is similar to this:

That's it. It's not a complicated insurance product wherein you have to file a claim and fight with an agent; it's a simple legal waiver. Unless you otherwise violate the rental agreement (reckless and wanton misconduct, racing, use off-road, etc.), the rental company has legally waived its right to collect on damages to the vehicle. That's it; you hand them the keys, fill out a short incident report, and you're off the hook. In almost all cases, you won't ever hear from the rental company about it again.

That peace of mind is worth $20-30 per day for some people.

Forgive me if I decline to let you drive the car that I rented without listing you on. Your insurance company may cover you, the car, and any damage you do to others or to property, but what happens when your insurance company leaves a balance due (as they've already shown willingness to do)? The rental company goes after me, since I rented the car (they won't go after you, because they don't have a signed agreement with you), and I try to get my insurance or credit card to cover it, but they both decline it because you were not an authorized driver on the rental car. Sorry, but I'm not comfortable assuming that risk.

All of the other items notwithstanding, I agree with your four points and suggest as well that every rental car customer do the same.

mille1j

i'm a pretty crappy driver so letting me drive your rental car IS generally a bad idea.

I have learned that in my state, collection of these fees is illegal, so I will be filing complaints with the postmaster since an attempt was made through the mail to commit fraud, and with the credit card companies since Alamo attempted to use them in an illegal transaction which likely violates their contract.