When Kimberly Esquivel rented a car from Alamo in Orlando recently, she thought her credit card would cover her. She discovered how wrong she was by accident.
Like other car rental companies, Alamo offers optional collision insurance that pays for damages if a car is wrecked. But the insurance is pricey, and can effectively double the final cost of the car. Esquivel heard her credit card might cover her, so she called Discover to get the details.
I inquired about their insurance policy regarding rental cars while on vacation. The clerk said, “No problem, ma’am … just decline all of Alamo’s rental insurance, rent the entire car through Discover and you’ll be covered for up to $25,000″
Well that sounded pretty good. I asked about conditions and she replied that it would cover everything except in cases of gross negligence and acts of God, which was considered leaving the keys in a running car, hurricane, etc. OK, sounded like I was covered.
So Esquivel turned down Alamo’s insurance.
And you probably can guess what happens next. She had an accident.
Esquivel backed into a power pole and smashed the back window of her car.
She drove the car back to Alamo and filled out all the reports. And then she waited.
The final bill came to more than $1,000.
What the cheerful Discover agent on the phone did not tell me is that its insurance is secondary to your own. If your own insurance does not cover collision in rentals, which mine did not, then they would pick up the cost except administrative costs, towing, appraisal, storage and other fees assessed by the rental agency.
If she could do it over again, would she have bought the Alamo insurance? Strangely, no.
I’m usually quite careful and it’s never happened before, and it probably won’t again. But maybe I wouldn’t have been so blindsided by the $1,000 administrative cost.
How interesting. Esquivel is saying she’d rather roll the dice on her next rental than overpay for it.
We know that car rental insurance is almost pure profit to the agencies. Why not lower the cost of insurance a little, in order to cover drivers like Esquivel?
And, for that matter, me.