Forced to buy car rental insurance that didn’t cover her

Aleksei Potov/Shutterstock
Aleksei Potov/Shutterstock
From time to time, a case comes across my desk that gets me turned upside-down, because it doesn’t make sense on so many levels. Julie Yu’s dispute with Dollar is one of them.

A few weeks ago, I shared a problem of one reader’s mandatory car rental insurance charge in Mexico. Basically, her vehicle ended up costing a lot more than she thought it would, even though she’d purchased insurance through a third party.

Turns out this happens often. But Yu experienced the same problem — with a dark twist.

Like other renters, Yu thought she’d done her homework. She researched the cheapest car rental rate in Cabo, which was through Dollar. She called the reservation number and confirmed the Mexican liability insurance requirements.

“I was assured full out-of-pocket price would be $118, with $12-per-day insurance,” she says.

But when she arrived, an agent told her the reservations agent was mistaken. The per-day insurance rate would be $25.

“What about the quote?” asked Yu.

“They always get the rate wrong,” said the rental employee.

The Dollar agent added: take it or leave it. Yu reluctantly accepted the car and the mandatory $25-per-day insurance.

And here’s where things get a little funny.

When Yu returned the car, she again mentioned the mandatory insurance, which was more than twice the rate she’d been originally given. Apparently, this didn’t sit well with the agent who was handling her return.

The agent said there was a scratch on the final inspection and charged over $300 for damages and loss of use.

We disputed this since we knew nothing was damaged during our rental period and there were multiple scratches on the bumper when we started the rental.

The agent then showed us a small, thin curvilinear scratch on the bottom of the left corner of the bumper. Again, they forced me to sign for damages or we would have missed our flight.

Twice during her rental, Yu felt as if Dollar had her over a barrel. Once when she’d been surprised by a higher insurance rate, and again when she returned her vehicle and was told to sign the damage claim … or else.

Note to anyone reading this who may be thinking of renting a car in Mexico: No one ever has you trapped, even when you’re south of the border. If you’re at the airport, there are other car rental companies to get a car from. You can walk away.

But the retributive damage claim — that’s a new one.

Yu complained to Dollar and received the following response:

I have contacted the location on your behalf, and they have responded accordingly in regards to your rental charges.

They have confirmed that the basic third party liability insurance (PLI) was charged at 209.85 pesos per day (converted from $15.00 per day). Their liability insurance ranges from $12.00 to $20.00 per day, depending on the type of vehicle rented.

I apologize if the coverage requirements were not better explained by our phone agent. I have forwarded your comments to upper management to ensure corrective training is provided internally. This information is also provided on our website, as well as during the online reservation process, under the section for local policies.

With regards to the damage, please understand that Customer Service acts only as an intermediary, and unfortunately, we are not in a position to substantiate or refute any damage claim between you and the location. If you would like more information regarding this claim, or to further pursue this matter, I must ask you to contact the location directly. I have provided contact details below that can be used.

In other words: Sorry, we can’t really help you.

I’m not surprised that Dollar changes its “mandatory” insurance requirements on the fly, but I find it troubling that it would add a damage claim to customers who push back.

But a bigger question is: Why force someone to buy insurance if it doesn’t cover you?

I can’t jump in and mediate this case yet, since Yu has decided to dispute this with her credit card company. I think she stands an excellent chance of getting not only part of her insurance refunded, but making the damage claim go away.

Should Dollar's mandatory insurance have covered the damage to its car?

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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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  • sirwired

    Aside from the likely bogus damage claim (the bottom of the bumper? Seriously?) I’m not sure we are in any position to judge what the mandatory insurance is supposed to cover… the policy text would reveal that.

    And I’m not sure what the “or else” was when signing for the damage… what would they have done if she refused to sign? The proper action there would have been to walk away from the rental counter; any paper you sign can be used against you in the eventual credit card dispute.

  • Raven_Altosk

    Mexico is home to drug cartels and scams. Why are people still traveling there?!?!?

    And this comes from a Texan who used to love to go South of the Border!

  • Phoenix Justice

    And so is the United States. What is your point?

  • Cybrsk8r

    I don’t get this story, Chris. She ACCEPTED the $25/day insurance. If she complained to the agent when returning the car, so what? The insurance covers it. The agent doesn’t get to just charge an additional $300 and just say “the insurance isn’t good for this”. This sounds like a classic case of “stick it to the gringo”.

    I’m with Raven,here. After all I’ve heard about Mexico in the last few years, why would anyone ever want to go there? And as for you, Dollar, I would cut this corrupt rental agency loose before it does even more damage to your already grimey reputation.

  • prabir

    I had an issue though not quite the same when I rented in Cancun through Hertz. I’m glad I was eagle eyed and noticed that the total was not the same as what my reservation said (including insurance). They had tacked on extra “taxes” over and above the taxes on my reservation. After back and forth with the agent, a lot of waiting and calls to a supervisor, they finally gave me the car for the price that was quoted on the reservation. The reason it worked out for me at the end was because I had read about these scams and had come prepared with a currency conversion app and took my time taking plenty of pictures of the car right in front of the agents and documenting out every little scratch. I also was very patient with the agents, explained to them the same thing multiple times until they got it and did not back down.

  • prabir

    The reservation was in USD, while my contract in Cancun was in Pesos.

  • ArizonaRoadWarrior

    Other than Canada, I won’t rent a car in a foreign country. My preference is to take a taxi or hire a drivercar for the day or take public transportation. It might cost more but I avoid all the rental car issues, scams, etc; parking (i.e. finding a parking spot or paying for parking at the hotel); driving (i.e. driving on the wrong side of the wrong in a few countries; etc.); etc.

    I have driven in most of the large metros of the US and I have spent a considerable amount of time driving in Southern California; however, I don’t know if I could drive in London, Paris and Rome after visiting these cities. No way that I will drive in China. In Beijing, I was on one of the ring roads (in taxi) which was three lanes but the road had actually five lanes of traffic…I told some business associates that the next bunch of NASCAR drivers will be coming from China. I like Shanghai’s public transporation system…I can purchase a single transit card that is good to use on the subway, taxi or bus.

  • ArizonaRoadWarrior

    I agree with you that this is a case of ripping off a tourist. We were on a tour of Europe and the tour director told the group that we need to watch out for the band of pickpockets and thieves who prey on the tourists. She said that the local government doesn’t do anything because the victim are tourists not locals. The point is that when you are a tourist that you need to look out for the scammers and etc. especially when traveling outside of your country.

  • TonyA_says

    Because these are the same folks that go to Di$ney.

  • Charlie Funk

    Would one or more of the four that voted “no” on this survey please post the reasoning that supports not covering damage when insurance to cover damage was purchased? I tried to do so and am lost as a ball in high weeds.

  • EdB

    They are just the people who will vote opposite on polls like this just to see if they can get a reaction.

  • CW

    I will never use Dollar again!

  • BillCCC

    Of course the insurance should have covered the alleged damage. I have never had a problem with Dollar but I have also never rented outside US/Canada. It appears that car rental offices in other countries are operating under different (if any) rules.

  • SoBeSparky

    Anyone who pays for car insurance knows there are two basic types of policies, liability and collision. “Mexican liability insurance” apparently covers third-party damages, not damages made to the rented vehicle. If she did not buy collision insurance, then she is liable for damages while the vehicle is rented to her, no matter who caused it.

    Really, anyone who has rented cars knows these same facts. There are two different policies or protections, personal liability (damages to third parties) and rented vehicle damages (collision).

  • Carver Clark Farrow

    Alas, so true

  • jerryatric

    This is just one more example of Mexico’s graft & corruption history. Threaten, cajole, harass & maybe even get robbed by gunpoint or worse.
    Why I would never consider a trip to Mexico!!!
    Good to see car rental companies once again deserting their customers. Walk around the car when you pick it up taking photos.
    In this case would have walked away to another car rental booth. Dollar agent would have backed down. If not, no great loss.
    Above all, this customer had no clue!
    I have rented cars in Australia, throughout the U.S & Canada & in many European countries over the last 40 + years. Car rental companies have really gone down hill. Service & scam like actions like the above are common. The worst is the damage claims 3 – 6 months after you return the vehicle.

  • Judy Serie Nagy

    What a weird story. How could they force her to sign something on the return or miss her flight? Why wouldn’t she just walk away and get on the plane? Why would anyone rent a car in Mexico?

  • cscasi

    My question is
    did she have full coverage; liability and collision/comprehensive or just
    LIABILITY as Mr. Elliot presented it in the fourth paragraph of the narrative?
    Were there deductibles (like our policies here haw $0-$1000)? I know that I
    would never drive anywhere in Mexico without having full coverage and I always
    bought a policy covering the days I would be operating a vehicle in Mexico.
    Without seeing a copy of the policy she purchased, who knows what she actually
    got? I am not defending Dollar or any other rental agency as we all know they
    push their sales agents to get drivers to purchase all the extras and the agent
    gets paid extra for doing it. Nonetheless, it is important to know what you are
    getting when you get any policy.

  • cscasi

    This is from a Mexican insurance company, MesPro

    Mexico Auto Insurance

    Coverage is provided by A rated, top Mexico auto insurance companies who are
    authorized and recognized in Mexico. Many Mexico Auto Insurance Companies are
    small or not rated…make sure you check the quality of the carrier you purchase
    from, and verify that they carry an AM Best or S&P rating.

    Liability coverage can extend from $50,000 to $300,000. Every Mexico
    liability auto insurance policy we sell carries medical coverage for you and
    your passengers, guaranteed legal and bond assistance, roadside assistance and
    travel assistance insurance. Physical damage policies will protect your own
    vehicle against collision, fire, overturn, theft and vandalism. Be sure and
    check our Mexico Auto Insurance program comparison
    charts or click here to get a Mexico auto insurance quote for travel to
    Mexico with multiple options now!

    Note the second pragraph states there liability and physicla damage coverages. Did she have both or just liability as I asked im my previous post.

  • karlakatz

    …… Should have gone to Key West, and kept her dollars at home… Cabo’s a dump!

  • karlakatz

    Absolutely true! A private car/driver is so easily negotiated, I’ll never rent a car outside of US again.

  • Alan Gore

    Rental car, Mexico, Dollar – the trifecta of consumer-unfriendly suck.

  • William_Leeper

    Unfortunately I am one of the 2% on this one. Having done the whole Mexico insurance thing, the “mandatory” insurance is in fact simply a required liability policy that covers damages to other property. The policy does not cover damages to the vehicle itself, but covers the other parties should the vehicle be involved in a collision! I don’t necessarily think this case is 100% right, as most rental locations roll the collision damage waiver in with the required policy, but not all, and that would be why the insurance didn’t cover the damage.

  • RobM

    I wonder how many people who have responded to this article have either been to Cabo and/ or have rented from Dollar there? I visit Cabo often and rent from Dollar regularly. It is unfair to lump southern Baja CA with other “Mexican” experiences.

    First of all, to get to the Dollar (and other rental agencies) one must take a proprietary shuttle- and, while there are “rental desks” in the airport, the final “negotiation” of your rental is done at the off premises location. So, if you are unsatisfied with the insurance requirements/costs, etc. it is very difficult to just “walk away” as you would have to find transportation back to the airport or walk to another of the rental agencies. Payless is walkable from Dollar but other’s are not.

    While in line at Dollar, I have witnessed many disgruntled people shocked at how a $12 per day rental rate can escalate to $40+ per day after insurance. There are many “levels” of insurance and it can get quite confusing, especially when one try’s to invoke the “coverage” offered through credit cards. My solution? I always accept “walk away” coverage from Dollar that covers everything but the interior and underbody of the car (in case one is tempted to take a dirt road or go off the pavement). Consequently, my experience is that the car is reviewed thoroughly prior to accepting the rental and everything is written down. Nonetheless, Dollar also has a disturbing tactic of requiring a mandatory signature on a blank document saying you accept responsibility for the damage listed on the blank form before they will let you rent a car……

  • Moshe

    I am with you on this, I am using Dollar in the last 2 years in the states because they really improved their service and become my company of choice if the price is right. I am asking Dollar to cut this corrupt rental agency loose and ANY agency with above average customer issues. Remember Dollar, we came back, we can go away!

  • William_Leeper

    Not true. I voted against this one as the “required” insurance policies are liability policies that cover only other property that is damaged in a collision. These policies rarely cover the rented vehicle when purchased alone. However, most of the rental agencies also bundle the loss/damage waiver with the mandatory policy. If Dollar doesn’t do that, they are technically right that the policy doesn’t cover damage to the vehicle.

    I assure you I didn’t just vote no to get a reaction. I am looking at the facts, and weighing them against what I know about these policies. It is highly probable that the policy didn’t cover the damage.

  • DavidYoung2

    Just got through three weeks ago with a car rental in Scotland – no problems (other than driving on the left and shifting with your left hand and roundabouts and….) One thing that makes me comfortable renting a car in is the Amex insurance that is the PRIMARY insurance. It’s relatively cheap at about $20/ rental — not per day — per rental. And few rental companies are going want to tangle with Amex over a bogus claim. You can walk away saying, “you got a problem? Take it up with Amex.”

  • Blackadar

    A liability-only policy @ $25/day isn’t a policy, it’s a scam.

  • John Baker

    My answer to the poll question is … “I don’t know.” I’m not sure what she actually bought. It could have been a 3rd party liability only insurance or a standard CDW. I do know that this just reinforces my perception and what Chris’s articles seem to indicate that tourists are getting scammed in Mexico constantly and no one seems to care. I think Cancun is off my list (then again I’m not a college student looking for a Spring Break trip either).

  • ArizonaRoadWarrior

    I am sure that there are several readers of this blog that have had no problems with rentals in foreign countries. There are countries that are better than other when renting a car. It seems like most of the car rental issues are related to tourist areas (i.e. “we can rip you off since you are not a local”) and/or developing/2nd to 3rd world countries (i.e. lack of consumer protection).

  • girlygirl

    I am convinced the underlying policy with these car rental agencies is to charge customers for damage (whether the customer did the damage or not). Some/most customers do not fight back. Especially if the insurance covers the “non-damage”. It’s plain and simple intimidation.

  • Mike

    We are owners at the Royal Sands and Royal Mayan in Cancun and have gone almost every year since 1990. We don’t rent cars there.

    In Cancun no car is needed. Buses are frequent and cheap. Rental cars mark you as vulnerable. Not only do you risk being unfairly charged by the car Rental agency you become a target for thieves of every sort. That includes police making “traffic stops. “

  • MarkKelling

    1. They call the cops if you don’t sign. If the cops are looking for you, I doubt the airline will let you on the plane even if you manage to get through security.

    2. They are located somewhere far enough from the airport or in a scary enough part of town where you can’t or don’t feel safe walking to the airport (this is not just Mexico, there are plenty of rental locations in the US located like this near airports).

    I don’t rent cars anywhere outside the US because of the possibilities of things like this occurring and the different driving laws/customs.

  • William_Leeper

    Oh trust me…I couldn’t agree with you more. In my opinion, the rental agencies should be responsible for the liability coverage on THEIR car, and this should be built into the base rate.

  • emanon256

    I actually love Cabo, its the only place in mexico I go now. I think it is one of the best places to visit in Mexico, though my wife still loves Mexico city. I have only rented from Avis in Cabo, and they have never charged me for insurance and have always provided excellent service. When I went to Cancun and rented from Thrifty, I was hit up for Mandatory insurance, but Avis in Cabo has never charged once me. One time they even gave me a car that seemed to have a jutter in one of the tires, I called them from the hotel and they brought a new car to my hotel and picked up the old one and never tried to charge me for damages.

  • emanon256

    There was an article in Time about emotional support animals and it mentioned support snakes and I thought of you. It also mentioned someone who brought two emotional support goats with them on a plane.

  • AUSSIEtraveller

    all depends on what the excess/deductable was !!!

  • Randy Culpepper

    How did they “force” her to sign for the damages?

  • Randy Culpepper

    Thanks for my daily dose of xenophobia. One car rental company has a practice that you disagree with (or are just ignorant about, based on the other comments), and you denigrate an entire country?

  • Bill___A

    I’d like to know that too. Once again, always take pictures before and after.

  • Bill___A

    I don’t sign blank forms, period. Nor should anyone else. I remember a rental agency here that wanted people to do that. I stopped dealing with them. I remember a Ramada Inn at SFO that wanted me to sign a black credit card receipt “for my convenience”. I had words with the clerk about it. I also went to a different hotel and never have been in a Ramada since (it has been 14 years) Dollar corporate should take some ownership of fixing the problem. I have never intended to rent a car in Mexico.

  • Bill___A

    With all of the Mexico corruption and rip off stories, the country deserves it more than any other this side of the planet.

  • Raven_Altosk

    LOLOL. No, I don’t think Mexico has the same Fatty Movers (scooters) and stroller to human ratio that Di$ney does. I don’t think any place does…

  • Raven_Altosk

    GWAAAAHHHHHH….they are multiplying!!!! I still stand by my thought: “if you can’t leave the house without your rat/cat/dog/pig/snake/bird to make you feel warm and fuzzy, do the rest of us a favor and stay home!”

  • Guest

    Try reading his response again…. “This is just one more example “. Did you miss that “one more” part? He didn’t denigrate the entire country because of this one incident. It was just one of many reasons for him.

  • Raven_Altosk

    I have a gift for you. If “Phoenix Justice” is a reference to “Phoenix Wright,” that is…

  • jerryatric

    To Randy. Texas & he knows how to spell xenophobia? WOW! I don’t live in your great U.S.A. So I suggest you look up the meaning of the word.
    I have travelled through 3/4 of this earth over a period of 40 or so years, & Mexico is much like many other 3rd world countries – corrupt, violence prone (much like your country) & dangerous to boot.

  • cahdot

    20 %$# people voted no /////?????again REALLY maybe they should read the story again

  • TMMao

    At home we are required to buy personal liability & property damage insurance to cover any damage we may do to other people or their property. If we want protection for ourselves, collision / comprehensive insurance is optional and sold separately. Why should this be any different in Mexico?

  • Guest

    After I made the mistake of renting a car from Dollar in Munich, I was so badly cheated that I wrote to the German Tourist Board, the US Department of State and the executive offices of Dollar. I finally got my money back but everyone should be aware that Dollar is a very sleazy outfit and they will take advantage of anyone they can.

  • pauletteb

    I wouldn’t want that lack of flexibility on a month-long trip to Australia where we covered thousands of miles. My daughter and I picked up our second car in Adelaide (they wouldn’t let us drive the first hire car through the desert from Alice Springs) and dropped it off in Sydney more than three weeks later . . . no hassles. And Hertz in Australia had no problem accepting my third-party travel insurance to cover the damage waiver.