Expert: Richard L Carranza - 2/17/2009

Question
Hello Richard,

My husband was involved in a car accident about a month ago.  Due to the accident the vehicle was wrecked therefore we had to rent a car so he can go to and back from work.  At the time of the rental, the rental company suggested we obtain collision damage waiver coverage on the rental since we only have liability coverage on our policy.  We were told that once the other driver's insurance company opened a "reservation ticket" ours would be cancelled and would bill the insurance company directly, in which case their own collisiong coverage would apply to the rental and the collision damage waiver coverage would not longer be necessary.  The other driver's insurance company accepted liability for the accident and told us that they would set up direct billing with the rental car company.  When my husband returned the vehicle there was a balance of $540.00 due to collision damage waiver charges plus tax.  The other driver's insurance company only paid for the rental and taxes.  Should we still be responsible for the collision damage waiver charges on the rental if the other driver's insurance company accepted liability for the accident?  Wasn't these charges supposed to be cancelled once the insurance company set up direct billing with the rental car company?  Any advice will be greatly appreciated.  Thank you!

Answer
Insurance companies do not routinely pay for 1st party coverage(s) (Collision and/or Comprehensive) when the renting party does not have that coverage themselves.

Were you referred to the rental car company by the at-fault party's carrier?  If so you will be in a stronger position than if you picked the rental company on your own.

Do you recall who your initially spoke to re the collision coverage waiver?   Will they confirm what you were told?

What you are saying about the insurance company's own coverage(s) rolling onto the rented car is news to me... never heard that one before.  

The argument is that they should not have to pay for coverage(s) that you did not have to start with.

The concept of INDEMNITY is to replace what you had... not something you didn't.

The arguments you can make.. the renting company would not rent you the vehicle without your taking the extra coverage(s). Check with the rental car co to make sure that is the case.

You were told/assured that this extra coverage would not be charged to you and that it would be dropped.

Make it clear to the carrier and handling Rep that you expect the rental issue to be worked out between the carrier and the car rental company.

Infer to the carrier that if not is not resolved that you will file a complaint with the appropriate State Insurance Department (carriers hate to hear that or better yet get involved in that process).

Try and work with the carrier and the rental car company to resolve with all parties picking up part of the total tab...

Hope and trust that the above helps...

Please rate this response..


Thanks