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My car rental company billed me $5,847 for damage! Why won’t insurance cover this?

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Michelle Couch-Friedman

Consumer reporter and ombudsman

After a whirlwind 24-hour trip to Alaska, Jurian Yee’s car rental company sent him a surprise $5,847 damage bill. The young man suspects Budget is charging him for vehicle damage that someone else caused, but he has no proof. Worse, Safeco Insurance quickly denied his claim and refused to pay the astronomical invoice.

Yee says the insurance company won’t cover the repairs of the rental car because it agrees with him and determined he didn’t cause the damage. Unfortunately, that leaves Yee stuck with a $5,847 bill from Budget Car Rental, which will soon go to collections. 

With nowhere else to turn, Yee is asking the Consumer Rescue team for help. He hopes we can convince the car rental company to drop the claim and charge the driver who damaged the vehicle instead. 

But what does the denial from the insurance company really say? This case hinges on that detail. 

Let’s have a look at the latest car rental damage claim to hit the Consumer Rescue helpline

Chasing the Alaskan Northern Lights in a rental car 

Back in November, Yee made a spontaneous decision to take a 24-hour adventure to Alaska from his home in Ohio. His goal was to try to catch a glimpse of the Aurora Borealis – the Northern Lights. 

“I have airline privileges so I could fly up there to Fairbanks for free,” Yee explained to me. “I booked a rental car with Budget and picked it up at 11 a.m.”

Yee was in a rush to get the most out of his 24-hour visit to Alaska. As a result, when he landed in Fairbanks he didn’t inspect the 2023 Prius for pre-existing damage. According to Yee, he also neglected to take any photos or even have more than a cursory look at the vehicle.

He would soon regret those critical oversights.

That was fast! Returning the rental car

Of course the day and night went by quickly and Yee soon found himself back at the Budget Car Rental lot. But there was no attendant before 9 a.m. to inspect the Prius. He followed the instructions to return the vehicle. Putting the keys in the box, he walked inside the airport and within hours was back home in Ohio. 

The past 24-hours had been an accelerated adventure to be sure, and Yee was happy to have taken it. But the situation was about to morph into a travel fiasco of epic proportions. 

$53 in rental fees plus $5,847 in car damage charges

A few days after his return home, Yee opened an email from Budget expecting the final invoice for his rental car. It was exactly that, except much to his shock, the bill was $5,847 more than he expected to pay.

They [Budget Car Rental] said significant damage had been found on the Prius and that I was responsible,” Yee told me. “Budget claims numerous damage points and said it would cost almost $6,000 to repair the rental car.

Yee immediately called and asked for additional information about the damage and requested photos. 

He soon received that documentation… many, many photos of various angles of the back of the rental car which show significant damage.

car rental damage, evidence of rental car damage
Two of numerous photos provided by Budget Car Rental to support its damage claim.

Faced with what appeared to be quite a lot of damage to the tail end of the vehicle and with no way to prove he didn’t cause it, Yee submitted a claim to Safeco Insurance. 

“I thought this was a fraudulent damage claim,” Yee explained. “…but since I didn’t take any pictures of the rental car when I picked it up, I didn’t have a choice but to file with Safeco.”

After filing his insurance claim, Yee assumed that would be the end of this unpleasant experience. 

Unfortunately, his car rental problems were only just beginning. 

Safeco Insurance: This rental car damage claim is rejected

Shortly after filing all the required paperwork with Safeco, Yee got a more shocking piece of news about this rental car. The insurance company rejected the claim. It would not be paying for the repairs of the vehicle. 

From the pictures that Budget provided and my recorded statement, Safeco believes I am not at fault for the damage to the rental car. 

I am the insured and Safeco told the car rental company: ‘Safeco has concluded that there is insufficient evidence showing our insured is at fault for this incident.’ 

So Safeco won’t pay and Budget won’t drop the damage charges.

Jurian Yee

Initially, Yee believed that since Safeco refused to accept the claim, Budget would back down and drop the the whole thing. 

However, when PurCo, Budget Car Rental’s loss prevention company began sending demand letters, Yee realized the $5,847 bill wasn’t going away.

Asking Consumer Rescue for help

Yee and his dad are no strangers to Consumer Rescue. I became acquainted with Emmett Yee when he asked me for help with a Marriott accessible room problem via The Points Guy

So when Jurian was having problems with Budget, his dad recommended that he ask our team for help. 

Can you help me with this problem? Our insurance company will not cover this charge because they believe, as I do, that I didn’t cause the damage to this Budget rental car. I only had the car for 22 hours and I didn’t cause any damage. I’m going to file a complaint with the Alaska attorney general, but I hope you could help me like you helped my dad.

Jurian Yee

I hoped we could help, but unfortunately, when I went through Yee’s complaint I could not find any “smoking gun.” 

Our advocacy team at Consumer Rescue frequently receive complaints from travelers blindsided by car rental damage claims after “uneventful” trips. In many of these, we can find some little detail to prove that the customer was unfairly charged for damage they couldn’t possibly have caused. But in Yee’s case I could find nothing. 

So I asked my colleague, Dwayne Coward, to have a look. And that’s where things started taking a quick nosedive for Yee. 

Who is insured by Safeco?

As you can probably imagine, at any one time, I’m working on 10-20 consumer cases here at Consumer Rescue and over at The Points Guy. If you’re a regular reader of my column then you know that the cases I mediate are not simple. You’ll never find a resolution where I proudly announce: “And then I contacted the company on your behalf” – with no explanation, leaving the reader bewildered as to what the lesson is.

The cases my team takes on are complicated and usually not something a consumer could easily resolve on their own. Dwayne is my super valuable second set of eyes at Consumer Rescue. In this case, he noticed something immediately that I hadn’t seen initially in Yee’s plethora of documents. 

Michelle, The insured listed on the Safeco claim is not Jurian, it’s his dad. Jurian needs to find out if he actually is covered by that insurance policy. He may be covered but it doesn’t look like the insurance company processed the claim that way. 

Dwayne Coward, Consumer advocate, Consumer Rescue

I had a look at one of the incident reports and indeed Emmett was listed as the insured. So I asked Jurian if he had an insurance card in his name.

Soon Jurian provided an insurance card that he believed proved he was insured by Safeco. 

It didn’t. 

The names listed on the insurance card were his parents Emmett and Keiko Yee. Jurian was not an insured driver.

In Ohio, car insurance covers the vehicle and the specific people listed on the policy. Jurian was insured when driving his parent’s cars, because the actual vehicle was insured. But he was not an insured driver with Safeco. So there was no way that the insurance company would cover him to drive a rental car in Alaska. 

What was now clear was that Jurian had misunderstood his (lack of) car insurance coverage. He had also misinterpreted the rejection from Safeco. The insurance company had refused to pay the damage claim from Budget Rental Car because it covered Emmett Yee and his vehicles not Jurian Yee.

Jurian had been driving the rental car completely uninsured. Yikes!

The bad news about this car rental damage claim

Yee is just a little bit older than my daughters so when I realized that he was likely going to be on the hook for this giant damage bill, I felt terrible. After all, he was just looking for a spontaneous trip to see the Northern Lights. His adventurous spirit had back-fired spectacularly. 

So I tried another angle to find a way to make this $5,847 bill go away. I had a close look at the damage claim from Budget. As in other cases, I hoped to prove that the car rental company had made a mistake.

And then the final hammer came down on Yee’s complaint. 

In the pile of documents I was looking through I found a vehicle damage report that showed zero damage on the rental car on the day Yee drove away with it — and Yee had signed it.

Proof that when the customer picked up the rental car there was no damage.
The vehicle condition report that Jurian signed at pick-up shows that the rental car had no damage when he drove away with it.

Then within hours of Yee returning the car there was an incident report indicating significant damage to the rear end of the vehicle.

Of course, I hate to admit defeat, but in this case, I had reached the end of my options. It appeared that Yee had forgotten that he had reviewed the car with a Budget attendant when he received it. But he had and his signature was attached… No damage. 

And although Yee still suspected that he was charged for damage someone else caused, he understood my team would have no possible way to successfully resolve his case.

Thank you for looking at all avenues, Michelle. I’ve learned an expensive lesson, unfortunately.

Jurian Lee

Regrettably, this is one of those cases that has a lesson but no positive resolution. These are my least favorite tales to tell, but for consumers hoping to avoid travel fiascos, they’re important just the same.

How to make certain your rental car is insured

Unfortunately, Yee’s awful situation isn’t particularly unique. As a consumer advocate, I’ve fielded many similar cases over the years. They all end in the same way: a terribly expensive lesson for the uninsured driver. 

Don’t let this happen to you. 

Before your next car rental, here’s what you need to know to make certain that you and the vehicle are insured.

Contact your car insurance company

If you have personal car insurance, you’re likely covered for rentals in your home country but you shouldn’t simply assume this is the case.

Long before stepping up to a car rental counter, check with your insurance company. You’ll want to find out if your location, length of rental, and other circumstances will be covered by your policy. Remember that some insurance policies will become void if you drive the car out of a specific area or if the rental period is longer than 30 days. Always confirm all details before reserving a rental vehicle. 

And, of course, if you believe you’re included on someone else’s policy make certain that coverage extends to car rentals in your name.

Check with your credit card company

For international rentals, your domestic car insurance will not likely cover you. If you have a premium credit card (one you pay for annually), it might provide car rental insurance. Before relying on this type of car insurance, you must carefully read all the details to be sure to qualify for coverage. These policies have specific steps that you must take to be fully protected before and after the car rental. If you fail to follow all the steps and there is a problem later, you risk having your car rental damage claim rejected

Travel insurance that offers car rental coverage

Many travel insurance companies offer add-ons that include car rental insurance. This can be an inexpensive way to insure yourself during your next car rental. It’s easy to compare insurance policies that include rental car coverage using sites like InsureMyTrip or Squaremouth.

Buy the insurance offered by the car rental company

Of course, there is one last insurance option that car rental customers have to consider. Your car rental company will have a wide array of insurance products available to you. Although this type of insurance can increase the cost of your rental by hundreds of dollars depending on what you choose and the length of the rental, it will be considerably less than the price you’ll pay if you take off in a vehicle with no coverage and get into an accident or otherwise damage it. 

Selecting insurance at this last minute can lead to other problems — like paying for something you don’t want or need — so it’s imperative to acquaint yourself with the various types of insurance before you show up at the counter. The primary protection you’ll want to have is a Collision Damage Waiver (CDW). CDW will cover nearly all damage to the vehicle. Ask your car rental company to explain any product you need help understanding. 

Bottom line

Don’t let yourself get stuck in an expensive car rental fiasco. Never drive off a car rental lot unless you are 100 percent certain that you have a valid insurance policy covering you. Not only are you risking taking a financial hit, it is illegal to drive any car without valid insurance.

Although this mistake cost Yee $5,847, he should still count himself lucky. Had he had an accident in that rental car and/or damaged property or injured someone, the cost of driving uninsured could easily have reached hundreds of thousands of dollars. The good news is that didn’t happen. Yee will be able to take this as an expensive lesson with no long-term repercussions. And that’s the best possible outcome in this unfortunate situation. (Michelle Couch-Friedman, Consumer Rescue)

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Michelle Couch-Friedman

Michelle Couch-Friedman is the founder and CEO of Consumer Rescue. She is a consumer advocate, ombudsman columnist, mediator, writer, and licensed psychotherapist. Michelle is a public speaker, and her expert guidance has been cited in MarketWatch, Consumer Reports, Travel & Leisure, The Wall Street Journal, Newsweek, Popular Science, CNN, CNBC, Boston Globe, CBS News, National Geographic, Travel Weekly, Reader's Digest and more. You might even catch Michelle on TV reporting on a situation. :) Michelle is also the travel ombudsman columnist for The Points Guy and is the former executive director of the nonprofit Elliott Advocacy. During her six years in that position, she resolved thousands of cases for troubled travelers and other consumers. You can read hundreds of 5-star reviews Michelle earned during her service to the nonprofit since 2016 here on Great Nonprofits. She is also a member of the Society of American Travel Writers. Today, she continues to spend as much time as possible fiercely defending consumers and traveling the world with her family. Contact her at Michelle Couch-Friedman or on Linkedin, Twitter or Facebook.