Motor claims and rental vehicles
Published:Sunday | December 18, 2011 | 12:00 AM
Insurance Helpline, With Cedric Stephens
Question: I rented a car for a week while in the USA. I did not inspect it when I took possession. One day while I was in Indiana, it was parked by valet. On the following day when it was returned, I noticed a minute green surface scratch. The vehicle I rented was gold. I assumed it was scratched by the valet parking but as the scratch was on the passenger side, I may have received it like that. I reported it to the rental company. I thought that since the scratch was so small the company would ignore it. They took a statement from me. A week ago, the company contacted me and suggested that I advise my insurer and/or credit-card company. If I did not have insurance or wished to pay the claim myself, a bill would be sent to me along with supporting documents. My insurance does not cover rental cars in the USA. How do I reply to the company? My concerns are that I may be liable since I did not inspect the vehicle before taking custody and also that any vehicle could be fixed and charged to my account.
Question: I rented a car for a week while in the USA. I did not inspect it when I took possession. One day while I was in Indiana, it was parked by valet. On the following day when it was returned, I noticed a minute green surface scratch. The vehicle I rented was gold. I assumed it was scratched by the valet parking but as the scratch was on the passenger side, I may have received it like that. I reported it to the rental company. I thought that since the scratch was so small the company would ignore it. They took a statement from me. A week ago, the company contacted me and suggested that I advise my insurer and/or credit-card company. If I did not have insurance or wished to pay the claim myself, a bill would be sent to me along with supporting documents. My insurance does not cover rental cars in the USA. How do I reply to the company? My concerns are that I may be liable since I did not inspect the vehicle before taking custody and also that any vehicle could be fixed and charged to my account.
- N.W., Kingston 8.
HELPLINE: Questions like yours are one of the many reasons why I have continued to write this column over the last 15 years. The queries that readers pose come in all shapes and sizes and from many directions. They are proof that insurance, as politicians would say about politics, affects the daily lives of many persons in many ways. It is not the dull, boring subject that many believe. Also, it is not only about making money for shareholders, employees and others in that industry.
Jamaican motor policies do not cover rental vehicles, period. This restriction is not limited to the US. It is absolute. If you were to rent a car in Canada, The Cayman Islands, Barbados or the United Kingdom, for example, the exclusion would apply to those countries as well. The Driving Other Cars Provision typically would say; "... we will indemnify you while driving a motor car not belonging to you and not hired to you under hire purchase agreement or under a car rental agreement ..."
legal responsibility
You became contractually (or legally) responsible for the damage to the Toyota Camry when you signed the rental agreement. This is what I would expect the fine print in the agreement to have said. Further, I believe (note the emphasis) that it is also likely that the rental company did not give you permission to authorise the valet (or any person) to drive it. In all probability, the rental company has insurance to protect themselves against claims made by third parties and damage to the vehicle while it is being driven by named renters. Normally, the rental company's insurance carries a deductible (usually X per cent of the estimated value of the vehicle) in the event of collision damage to the vehicle. The rental company almost always "forces" renters, under the terms of their contract, to pay for any damage which falls under the deductible while the vehicle is in the renter's custody. Because of those provisions, I expect that you will end up having to pay to fix the damage for the car that you hired with your own funds or get your credit-card company to pay it.
Protect yourself by carefully studying all of the documentation that the rental company provides about the repairs. Ensure that the costs are fair and reasonable and are consistent with the damage. If the rental company is reputable and honest, then the odds are that they would be unlikely to cheat you. If this does not happen, visit the following web address: http://www.automd.com/repaircost/.to get information. It is regrettable that you did not use your BlackBerry smartphone to take photographs of the damage.
Those in the know buy collision damage waiver (CDW) coverage when they enter into rental agreements. This coverage provides protection under which the rental company waives any right to recover property damage to the vehicle from the renter. "A significant fee (according to my US Insurance Dictionary) is paid by the renter to the rental company for coverage." CDW coverage is also provided as an add-on benefit by some credit-card companies when vehicles are rented and the rental fee is charged by members to their credit cards. There is usually a time limit of 30 days in which to file CDW claims which are connected with the use of these cards.
Cedric E. Stephens provides independent information and advice about the management of risks and insurance. aegisja@gmail.com SMS/text at 812-7233.