The Taurus is a total loss – should he pay $22,000?

By | March 1st, 2016

This is a first: Budget is telling one of its customers to buy it a new car. He wants our help. The advocacy team is considering this case, but I’d love to get your thoughts before we get involved.

And no, that wasn’t an exaggeration — Budget, through a claims collector, is making Jay Corporan pay for a 2015 Ford Taurus.

Read this, folks. It could happen to you.

Corporan’s rental started routinely enough. He declined the insurance because he was using a Discover card, which offers secondary collision coverage to cardmembers.

He parked his car on University Place in Manhattan. When he returned two hours later, the car had vanished. Corporan says he looked for the car for the rest of the day and finally, the next morning, filed a police report.

Police eventually located the Taurus, heavily damaged, about an hour’s drive away in Pleasantville, NY. Discover denied his claim because it doesn’t cover theft, and Corporan doesn’t have car insurance.

Corporan also doesn’t have $22,000 to pay for a new car.

“This has been a nightmare,” he says. “I thought I was covered through my credit card.”

At this point, all you travel “experts” in the audience are thinking:

  • “He should have bought Budget’s optional insurance.”
  • “He should have checked with Discover before making his reservation.”
  • “He should be as smart as I am.”

I’m kidding about the last one. But seriously, this is a case rich in lessons for the rest of us. Always check your credit card or car insurance before renting. Optional insurance is fine, but it’s wildly overpriced. You can do better by going online or getting coverage through your car policy or travel insurance.

Related story:   Her credit card didn't run. Whose fault is that?

And no, this could have happened to anyone.

But back to Corporan. What do we do about the letters demanding an immediate payment of $22,000? Here’s the latest letter from the car rental company’s collection agency:

We have reviewed all of the information that you provided and the coverage available under the above referenced policy. Based on our investigation, we must regretfully decline to pay for your loss. Our reasons for this declination of coverage are explained below.

Our investigation indicates that you rented 2015 Ford Taurus from Budget Rent A Car on 12/05/2015 and charged $276.74 to your Discover card. Loss was occurred on 12/11/2015 by theft of vehicle. Your loss is not covered under this Policy. Policy definitions as used in this policy are: Collision Damage” means the direct and accidental damage to a Rented Automobile caused by upset or collision with another object. Collision Damage does not include loss caused by missiles, falling objects, fire, theft or larceny, explosion, earthquake, windstorm, hail, water, flood, malicious mischief or vandalism, riot or civil commotion.

Based on the review of the policy, the documentation provided, and the facts of the loss we have determined that your loss is not covered as the rented vehicle does not meet the policy definition of Rented Automobile.

As I review the paperwork, it seems pretty clear that Corporan is liable for this loss. There were some procedural irregularities. For example, Budget didn’t send him a loss report on the vehicle, so there’s no way for him to verify that the vehicle was a total loss. There’s no police report, either, because the car was found, albeit in a damaged state.

Related story:   If you have to be told that "heat kills" maybe you shouldn't be driving

In other words, there’s enough uncertainty to warrant a second look. But something tells me it won’t change the fact that Corporan is liable.

Should I take Jay Corporan's case?

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