The Great Rental Rort

Rort – a New Zealand/Australian slang term for “a dishonest scheme” or “to take unfair advantage of something”.

About twenty years ago when I visited the US on business, I began to use rental cars to get myself about and have continued to do so since then, for business or pleasure. I like driving in the USA (even though they drive on the wrong side of the road) and there are some places you just need to have a vehicle to get where you want. In the early days, I didn’t take much notice of the insurance requirements for rental cars, as the Company was paying and it was just another expense. The terminology used by Rental Companies I found confusing and varied from company to company and I had also thought that it was covered by my travel insurance. This misconception was dispelled in the early 90’s when I discovered that not only did travel insurance NOT cover for damage to a rental vehicle (it only covers any excess or deductibles), the public liability cover was also specifically excluded with relation to rental cars, which is how it still is today. My recollection is that back then there were State requirements for minimum insurance cover for Rental Companies and they had to provide that. However, rental companies still tried to upsell the unsuspecting tourist on LDW, CDW, EP, LIS and a million other acronyms that meant unnecessary insurance. Having said that, I have been there often enough and have watched enough law dramas on TV over the years to know that it is folly to drive on US roads without adequate insurance.

When I booked the car in Chicago online for the boat buying visit last year, there was a mention during the procedure about “insurance cover” being discussed by the agent when I picked the car up. When I arrived at the counter I declined the cover offered, believing that I was covered by minimum State requirements. It was not until the agent said “so you are fully responsible for any damage to the car or anyone you hit” that I understood I was pretty much obliged to take the additional insurance which at $12.50/day for the Collision and $13.99/day for the Liability, finished up costing more than the car rental!

To avoid being caught like this again, and because we will need a rental car to provision when we return, I have spent the past several weeks thoroughly researching what the US Rental Car Insurance industry is all about. It is grey and murky and, I believe, quite deliberately confusing. It appears now that the onus for meeting State requirements for vehicle damage or public liability is on the driver of any vehicle, and the rental company’s only obligation is to make it available, which they do……for a price. From what I have read, it has become a major money earner for them and staff are encouraged to sell as much as they can, by any means. However, there seemed to be a number of ways to avoid being stung by this, so I looked into them all.

Number1: You may be covered by your own auto insurance. This is probably so for a US policy holder, and I am covered here in NZ also. Unfortunately, I am not covered in the USA. So there goes that idea.

Number 2: Your credit card company may cover you. I have both MasterCard and American Express and both were cited in the research as providing rental cover if you use them to purchase the service. I rang MasterCard. “Nope – not with a NZ card”. I went the Amex website and Lo and behold. Yes….you decline the Rental insurances as you are covered by your Gold Card. (you can also buy it for $25 per hire if you only have a Green one).  But hang on, what’s this little superscript ² at the end? Aha....... ² in the fine print = “only available to residents of the USA, US Virgin Islands, and Puerto Rico”. So there went no.2

Number 3: Get a Non owners Auto Insurance Policy. By paying an annual premium, you can get cover on any car you drive for about what you will pay for 10 days rental car insurance (allegedly). Supposedly, there are plenty of Insurance companies offer this and I emailed 3 without a response. Finally I rang an agent for State Farm Insurance picked at random from their website for Wisconsin. (Our telecom company is offering a rate to ring the USA that costs no more than $4.50 for up to 2 hours chat, so sometimes it’s worth ringing to sort these things out). After an interesting talk, he went away to check and here is his response:

I spoke with Underwriting to get a gauge on what we’ll need to get you insured during your trip.

Here’s the details. 

1. You must have a US Driver’s License.  There is a Dept of Motor Vehicles in Kenosha.  It should be fairly easy for you to apply and get one. Here is there website http://www.dot.state.wi.us/drivers/vehicles/index.htm
2. You must have a US address.  Setting up a PO Box for mail at the Kenosha Post Office is simple.  The Post Office is right down the road from the Marina.  Here is there website  http://www.yellowpages.com/kenosha-wi/united-states-postal-service
3. Once you have those, I can work with Underwriting to quote the Non-Owned Car Insurance policy.

 I wish it were simpler than that for you given all the other items you have to deal with before your trip.  If you have any other questions or needs I can help you with, feel free to give me a shout, I’ll be glad to help!

Since he also told me he thought it would be around $100 a month, I decided that it was all too hard, so there went the third and last option.

Which brought me back to the Rental Car Companies “insurance”. I began the exercise of comparing the various companies available at each location and dug out each company’s charges for collision and liability cover, and believe me some are well buried! In many cases the cover exceeded the rental charge before taxes and other charges and the totals varied dramatically. For example, a one day hire in Los Angeles varied between $56 and $108, but in several cases the insurance cover did not show on the on-line quote and was to be “arranged at pick-up”.(when you’re tired and stressed and just want to get out of there – so you’ll sign for anything!). However one rental company stood out from the rest as under “options” the “insurance” cover was pre-ticked and at the end of the quote the word “included” was alongside each of the optional items along with the statement that “this rate is guaranteed”. In the case of the rental for Kenosha their rate for 3 weeks and 3 days was $260 less than its nearest rival and $600 less than the dearest.

That Company is Hertz and accordingly I have made the bookings with them. Being the cynic I am, I have examined and re-examined the quotes to see where they are trying to rort me, but I cannot find anything. I have the quotes in writing and I am certainly prepared to argue profusely at the counter if there is any attempt to add further charges (or lessen cover). I am hoping that this is not the case as I am advising all of my fellow travellers to avail themselves of Hertz’s services as they appear to be the most “honest” of the rental car companies I have found to date – I hope I am not disappointed.

I guess time will tell and I will let you know.

42DTG

PS. You can also rent a GPS from rental car companies for around $12 -13/day. For 10 days worth of rental, you can buy one at Walmart.