The Insider: How do I handle a damage claim on my rental car?

Editor’s Note: This is the final installment our new “Insider” series on car rentals. Here’s the first part, the second, the third and the fourth. By the way, if you see something I’ve missed in this post, please tell me in the comments .

You’ve put a dent in your rental vehicle. Or worse, your car rental company claims you returned the car with a scratch or two on it. Oops.

How do you handle it?

I’ve damaged a rental car (sorry, Hertz) and I’ve been through all the steps. But I’ve also helped countless others who either roughed up their rental, or were accused of it.

This is a hugely controversial issue. In the past few years, car rental companies have taken a tough position on customers who damage their vehicles. Many travelers believe car rental companies are profiting from damage claims, insisting the scratches or dents were either pre-existing or completely fictional. In some cases, they are correct.

Let’s go through the steps.

First, let’s assume that the damage isn’t major, which is to say, you didn’t total the car. If the car is undrivable, you’ll want to call the company right away, and the claims process is pretty straightforward, because no one is questioning the damage.

The return.
A vast majority of disputed car rental damage claims happen because of little dings and dents that no one noticed. Maybe you were parked at the mall, and the SUV next to you put a little bump in your side panel when the driver opened his door. The trick is to identify any minor damage when you return your set of wheels to the rental location. You’ll want to give yourself 10 extra minutes to walk through these steps, but believe me, they’re worth it.

1) Find a well-lighted space, preferably out in the open. Whip out your camera and photograph the inside and the outside of the vehicle. Take as many images as possible. Note any dings, dents or scratches. Pay close attention to the windshield; those are the number-one source of damage claims.

2) Ask the car rental employee handling your return to walk around the car with you. That person will often be busy (tell him you can wait) or totally unavailable (see step 3). Walk around the car with the form you filled our when you rented the car and then ask the employee to sign the form or to give you something in writing, verifying that the car was returned in the same shape as you drove it away. If the employee says a printed receipt is sufficient, then at least record the name of the worker who assured you the receipt was sufficient. You may need it later, if it comes to a dispute.

3) If no one is available, go inside, ask for the name and email address of the branch manager, and send the manager a brief email with your name, rental number and a few snapshots of the car as you returned it. Is that overkill? No, and especially not if you are using your own insurance, as opposed to the optional Collision Damage Waiver offered by the rental company. It signals to the rental location that filing a frivolous claim against you will be difficult.

4) Keep your photos, video, receipts and signed documents for at least six months. That’s how long it could take the claims process.

What about moving violations?
If you’ve run through a tollbooth or a red light, there’s nothing you can do at this point. Your car rental company will forward the paperwork to you. In many cases, the company will furnish you with photos that establish your guilt. At the very least, it should document the time and place of the alleged violation. Review this information carefully. I’ve dealt with many tickets where the driver was out of state, and couldn’t have possibly run the red light, or where the wrong car was billed for a moving violation.

Handling the dreaded claim.
Ideally, the car rental claims process will start when you return a damaged vehicle. An employee will ask you to fill out a claim form in which you acknowledge the damage and you explicitly agree to pay for it. Recently, some rental companies have begun charging a renter’s credit card a deductible even when there’s been no formal damage estimate. I’m skeptical of that practice. While it may be legal, I think you’re better off waiting for a bill before paying up, or asking your insurance to settle the claim.

If you purchased the optional insurance, you’re all done. You shouldn’t have to worry about anything else. But if you’re using your own insurance, or, God forbid, you’re not insured, you’re not out of the woods yet. You’re going to have to deal with your car insurance or credit card quickly (there’s a time limit on filing a claim) and then negotiate with the car rental company or an outside company that specializes in damage claims, often referred to as a subrogation management company.

The claim by mail.
In some cases, a car rental company will discover damage to a vehicle after you’ve returned your car. If you’ve gone through the process of photographing your car and getting a sign-off from a real person, then this is a non-issue. Simply send your extensive documentation back to the claims department, and your case will be closed.

But what if you forgot to take pictures, and simply dashed off to the airport terminal? (Hey, it happens.) Well, there’s a way out of that, too.

Note: If you think there’s a chance the car was damaged while you had it, and a car rental company can show you credible documentation to that effect, then I would urge you to accept responsibility for the bill. Car rental customers sometimes say they shouldn’t be held responsible if they didn’t cause the damage. That’s incorrect. If the car was damaged while you had it, you have to pay for the repair.

First, the bad news. You’ll get an email or a letter from either the car rental company or a claims management company, alerting you to the damage. This can be unsettling because it often doesn’t contain many details – it only informs you of the problem and asks for your credit card information an/or your insurance information.

Here’s the proof. The message will be followed by an email or letter that contains photos of the damaged car and an estimate of the repair. It could also contain two fees unrelated to the repair: loss of use and diminishment of value. These fees are exactly what they say: 1) an estimate of how many days the car was out of commission, and the average daily rate it might have earned; and 2) an estimate of how much less the car is worth, now that it’s been banged up. Read everything carefully. Make sure the license plate matches the plate on your rental and that it’s the same car. (Sometimes, it’s not.)

Pay up … or else. If you don’t respond to the first or second letter, the car rental company will threaten to refer your case to a collections agency. This is probably the last time you’ll hear from the agency, and it is your last opportunity to come to an agreement. By the way, if you fail to respond, you won’t just have a collections agency harassing you, but you’ll also be blacklisted from ever renting from the agency again.

Strategies for disputing a claim
Again, assuming you are absolutely certain that you returned your car undamaged, here are the steps.

• Politely tell them you didn’t do it. This should be done in writing, not by phone. Resist the urge to get an immediate resolution. The process takes time. Be as detailed as you can in your explanation, but keep your initial letter tight. Most of these rebuttals are rejected, but all the same, they are a necessary part of the claims process, and you’ll need to get your denial on the record.

• After the denial, send a more strongly-worded email to the car rental company, restating your position. Copy your insurance company. By now, you should have received a repair estimate. Feel free to challenge some of the items, including loss of use and diminishment charges, which can be as inflated as your repair bill. With a little prodding, I’ve seen these charges lowered or even removed.

• If that doesn’t work, I would recommend appealing to a manager, a customer-service vice president or the CEO. This is a good time to loop in your attorney and the insurance commissioner in the state in which the car was rented. I’ve spoken with damage claim companies who say that if it gets to this point, and the damage is less than $500, they will drop the claim as a matter of policy. And if none of those strategies work, call me.

Is this a scam?
Your scam radar should be on full alert if you see any of the following.

• A claim that’s a few dollars short of $500, which is the standard car insurance deductible. This may be a sign that the car rental company is trying to ding you for a trumped-up damage claim. It doesn’t want to go over $500 and invite the scrutiny of an insurance company.

• A damage claim for normal wear and tear. If an essential part of the car stopped working on your watch, and it was due to a maintenance problem, then it’s not your fault. A car rental company is responsible for changing the oil in its cars and keeping the fluid levels where they ought to be.

• Damage to a part of the car that’s unseen to a normal person. That would include the roof and the undercarriage. Almost no one checks the roof before they rent a car and no one crawls under the car. It’s really their word against yours that something happened.

• A cleaning fee for smoking or pets — especially if you don’t smoke or didn’t bring your dog or cat on your trip.

Can you ask for an independent review of your repair bill?
Generally, the answer is “no.” Car rental companies can’t be bothered with getting a second opinion when they’re processing thousands of claims. But that shouldn’t stop you from questioning the bill or doing your own research in order to determine if you’re being billed the right amount.

(Photo: Wonderlane/Flickr)

Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or contact him at . Got a question or comment? You can post it on the new forum.

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