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

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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.

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.

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?

View Results

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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 chris@elliott.org. Got a question or comment? You can post it on our help forum.

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  • Regina Litman

    I sat this one out and went right to View Results. It’s right at 50-50 but with only 12 votes. I usually vote in favor of the letter writer / original poster. However, as someone employed by an auto insurance company, I feel that this is a conflict of interest.

    The one who should step in here and pay it is Discover. How do they justify not covering theft when they cover so much else?

  • AAGK

    Take this case. I live around the corner from University Place. I never would have thought of car theft there let alone that a rental car wouldn’t be covered by the Agency. It takes a lot of nerve to send someone a $22k bill. Please take this on.

  • John Baker

    I couldn’t vote. I’m not sure what you are going to do Chris. The car was stolen while in his care. This isn’t a case of a dent that may or may not have shown up while under his care. He freely admits that he parked the car in a certain spot and the car wasn’t there when he returned.

    He might want to check his regular auto insurance. They might cover him.

  • Michael__K

    This is shameful fine print for Discover to sneak into their policy when they advertise:

    Auto Rental Insurance
    Take on the road. We’ve got you covered.
    With built-in Auto Rental Insurance, when you use your Discover card you can stop worrying and start driving

    https://www.discover.com/credit-cards/member-benefits/auto-insurance.html

    No one should use their product and stop worrying under these terms.

    I double checked some other credit card policies including mine and (at least the one’s I checked) all specifically INCLUDE theft coverage.

  • Rebecca

    Except he doesn’t have car insurance, according to the article. I feel totally awful for this guy. But, unfortunately, he is definitely liable. Discover clearly doesn’t cover it, as stated in their policy language.

    I always try to look at rental car cases from the lens of “if it was MY car”. For all intents and purposes, it is during the time it was rented. And in this case, if it was MY car, I’d be on the hook for a new one. (Well, I have car insurance that would cover this, but he doesn’t. So all things being equal….)

  • Jim_Cleary

    I voted for you to take the case. I’m not sure what you can do, but I do think that for the OP to get hit with a $22k bill, for really a bit of bad luck, is just so punitive that I’d like to think that you can help somehow.

  • Tigger57

    From what I know (maybe I’m wrong) but usually the renter’s own car insurance will come into play.

  • Kerr

    No police report? If he reported it stolen and it was recovered, why isn’t there a report? The case may be closed, but there should still be a report.

    1. Contact his homeowner’s/renter’s insurance carrier to see if their coverage applies.
    2. Contact an attorney to help protect his assets (if any).

  • Rebecca

    To play devil’s advocate, it isn’t Budget’s fault either. They are out a car. This isn’t one of those cases where there’s a questionable scratch under the bumper. Or even a “loss of use” charge. They are out a car.

  • Michael__K

    I didn’t blame Budget, I blame Discover. However Budget needs to send documentation proving the total loss and fully accounting for the payment they are seeking, factoring depreciation.

  • Rebecca

    I feel awful for the OP. I really do.

    Think of this in a similar way. You have an extra car laying around. You let your buddy borrow it, because he needs it for whatever reason. And it gets stolen. His insurance doesn’t cover it. Now, you’re out a car.

    Just because Budget is a huge corporation, and not an individual, does not somehow mean they should just eat the loss. I think many are siding with the OP simply because he’s just a guy and Budget is a giant corporation. That’s ridiculous. We don’t know if this is a franchise either. For all we know, it is. And that means a small business owner is out $22k. Is that fair? What if it was your business?

    For this reason, I voted no.

  • Rebecca

    I agree. Like I said in my post, he is unfortunately responsible. I feel terrible for him. But Budget did nothing wrong and is out a car. He owes them the replacement value.

  • Kerr

    Advocating doesn’t mean the OP will walk away scot free. CE can make sure Budget only charges exactly what they deserve and help the OP find the best solution (personal insurance, etc.) for covering what he owes.

  • Alan Gore

    Perhaps the moral of this story is that we should start recommending that every renter take the rental company’s comprehensive rather than relying on crappy credit card coverage. Price that cost into your travel budget before you leave home, and better alternatives to a rental car might emerge.

  • Mike

    Needs info on salvage value, etc. Was car sold in arms length sale? Does new car price include all discounts? Is a loss of use charge included?

  • Pat

    i voted no I think it would be a waste of time. As Discover said, they cover collision, not theft. Also the Discover coverage is to cover deductibles, not the whole car and is secondary to his coverage. But OOPS, he does not have car insurance, so there is no primary coverage. My question is how did this person think they could rent a car and be covered with no auto insurance of his own and no insurance from the rental company.

    The best he can do is negotiate with Budget on the value of the car and how to pay.

  • FQTVLR

    Can you check the status of the car with the NY DMV? If you have the VIN you can do that online. I think it will show if a car has been sold for salvage or if it has been repaired. Once you have that information deciding on whether or not to take the case will be easier.

  • Rebecca

    The MSRP of a brand new 2015 Ford Taurus starts at $27k. And that’s with no options whatsoever, which I assume isn’t the case. So they obviously aren’t gouging him. If they were, they’d be asking for the replacement value of a brand new car. They’re obviously not. They’re asking for the cost to replace the car. I don’t understand why so many people don’t think that’s reasonable. What if it was your car? I guarantee you would want the amount it cost to replace the car you had. Which, again, is perfectly reasonable. Just because Budget or their franchisee owns the car does not mean he shouldn’t have to replace it

  • Kerr

    1. Actually a lot of rental cars are base models, most don’t have all the bells and whistles.
    2. That’s MSRP. Budget plays fleet prices which are WAY lower that that.
    3. We don’t know the condition of the vehicle the OP rented.

  • doug_jensen

    Please do not waste your scarce and precious resources on cases where the plaintiff is clearly at fault, even when the company might be unreasonable. “You can’t fix stupid!!!” Yes, there are faults by the company but not enough to overcome the plaintiff’s stupidity.

  • Rebecca

    I agree that they don’t pay MSRP, no one does. I was just pointing out that they’re obviously not asking for the highest possible number they can come up with.

    Again, what if it was your car? And the person that borrowed it tried to nickel and dime the amount down? You need to replace your car.

    Just because Budget owns the car, and not an individual, does not somehow mean they should accept less than what it will cost to replace.

  • Rebecca

    The credit card coverage is really meant to cover your car insurance deductible if there’s an accident. It isn’t meant for scenarios like this at all. I think the real moral here is not to drive a car if you don’t have car insurance.

  • mbods2002

    It says in the above that he didn’t have car insurance. Isn’t that odd?

  • mbods2002

    Why would someone who drives not have car insurance. Even if he doesn’t have a car he regularly drives (like many in big cities) he still needs something for the times he does drive.

  • Asiansm Dan

    Budget must have theft insurance for the car. I doubt it they haven’t while operating a fleet of cars.

  • Laura616

    The agreement does say that theft is not covered. Very sneaky on the part of Discover – misleading mouse print. I have just returned from London and when I declined the insurance and they handed me the form to sign, the value of the car was circled. As far as I know the insurance on my card is very comprehensive but I will check before the next trip.

  • IgorWasTaken

    Does Corporan have any kind of insurance, such as homeowner or renter? Or an umbrella policy? If he’s “negligent” in some way, those policies may help; at least it’s worth checking his policies; and maybe a call to his insurance company.

    Now you might say, “How could (for example) a homeowner policy cover this?” I’m not saying it definitely would, but some of those policies include some general liability coverage even outside the home.

    If he reads his policy and it seems it might cover this, and yet his insurance co says it doesn’t, he might contact his state insurance commissioner and/or a lawyer.

    As for Discover, if their insurance coverage is regulated by his state insurance commissioner, then maybe contact them to see if Discover’s disclosure of coverage was proper – that is, maybe it was written in a way that made it reasonable for Corporan to believe that everything was covered, including theft.

    Yes, most of the above would fall under “throwing a Hail Mary”, but if I were on the hook for $22K those are the things I’d do.

  • Blamona

    The biggest part that baffles me is he took more than a day to report it? How did he go around looking for it? Had he reported it right away (called police) it might have been found sooner/ better condition? (In other words mitigated his losses)

    So why so long to report missing?

    On a different note, if they catch the robbers, he can try to sue to recoup some of it

    I’m just confused he spent a day looking for it and didn’t report it until next day after

  • Michael__K

    Not odd at all, especially if he lives in New York City

    https://en.wikipedia.org/wiki/List_of_U.S._cities_with_most_households_without_a_car

  • mbods2002

    I guess, but there are policies for occasional drivers, though I can see people not bothering with that. So Budget rented a car to someone who had no insurance and took his word that Discover would cover this situation. I think he’s liable.

  • Michael__K

    Actually, credit card rental policies are normally designed to be primary for collision coverage when the renter has no personal insurance. And I could not find any non-Discover policy that does not include theft as part of that coverage.

    However, when credit card coverage is primary, it does not include liability. So it is necessary to accept the rental company’s liability (ALI) coverage in that case. (Not sure if the OP did so, but it wouldn’t have helped in this scenario regardless).

  • IgorWasTaken

    One other idea: Corporan should do some Googling to see if (by chance) Budget Tauruses (or any of their cars) have a higher-than-avg theft rate – because (just speculation) maybe they’ve been altered in some way by Budget that, incidentally, make them easier to steal.

    Or maybe a stock Taurus is simply especially easy to steal (and/or so often stolen) that if Budget knew Corporan would be driving into a major city, such as NYC, it could be argued Budget was negligent for renting him a car that’s too easy to steal.

    Indeed, for all we know there is a history of Budget Tauruses (or Budget cars in general) being stolen in NYC. If so, then Budget may have had a duty to disclose this heightened risk to its customers.

    If there’s any evidence of this, then Corporan would most likely need a lawyer to present this sort of defense. If Corporan has limited means, he could try to get help from a local legal clinic.

  • IgorWasTaken

    A third thought: How was the Taurus stolen? May not be able to determine how specifically, but what if the thief had obtained a key and Budget could be shown as negligent for that having happened.

    Or if the car has an electronic key, how easy would it be for someone to snipe/clone the code when Corporan wirelessly locked the car on the street? And what if there was a known security issue with that but Budget didn’t disclose? What if there had been a recall or tech advisory to patch the car’s security system to block hacking but Budget hadn’t applied it to this car?

    In other words, just because you rent the car and the contract says you are liable in case of theft, under state law a car rental company might still have a duty to provide a car that is not unreasonably susceptible to being stolen.

  • flutiefan

    He. Does. Not. Have. His. Own. Car. Insurance.

  • Michael__K

    Most credit cards rental policies are primary in this situation and cover theft. I can’t find any other card with Discover’s exclusions.

    When credit card coverage is primary, it doesn’t cover liability. So one needs to buy the rental company’s ALI coverage. But that’s still far more economical for a NYC resident than buying an occasional driver policy. Heck, even buying the rental company’s CDW (which is capped by local law) is far more economical than a non-owner occasional driver policy.

  • flutiefan

    I think that negotiation is where Chris could help.

  • Lindabator

    Because it is COLLISION coverage – this car was stolen.

  • Lindabator

    And therein lies his problem – he did not HAVE any. So by not purchasing the coverage with the rental company, he is on the hook.

  • Lindabator

    may just have liability?

  • Kerr

    I’m not claiming Budget isn’t owned for the amount of the vehicle, just stating that CE can help make sure the final amount is correct with no unnecessary add-ins.

    I have one car and don’t loan it out. However I do pay for full coverage so I won’t get hit by a similar scenario.

  • Lindabator

    No punitive when they had to replace the vehicle

  • PolishKnightUSA

    An observation about the state of the recovered vehicle. I’m reminded of when The Dude in The Big Lebowski got his car back. :-) My wife and I bought a car via a dealer who resold recovered stolen vehicles. It was about 2 years old and the ignition cylinder had obviously been replaced. Other than that (and perhaps a smell of urine the dealer had detailed away), it was in great shape and we got the car for a great price. Joyriders often leave the car in still decent condition. Perhaps the hooligans had hit the tire along a curb and disabled it, but that’s about a grand of work at most garages.

    If he’s going to “buy” the “car”, he deserves to see what condition it’s in as well as how long the vehicle had been driven and the “blue book” value. Your insurance company doesn’t give you full retail on the car.

  • jamieleeeeee

    I don’t think this a fair comparison, comparing car owned by an individual (extra or not) vs a car rental.

    In Massachusetts the owner would be required to have insurance on the car in order for it to be registered. So in the case that I lend out my car to a friend and it is lost or stolen while in their possession and they do not have insurance, my insurance would cover it.

    I know not all states are the same, but either way I believe that the comparison is apples to oranges.

  • Jeff W.

    I am not sure who you go after. Budget is out a car, so can’t fault them. I suppose you could go after Discover, but you are not going to get them to budge. Not when it is in the fine print and the amount is 22K.

    In reality, the fault lies with Mr. Corporan. Not because the car was stolen under his car, but because he didn’t research the coverage well enough. CC insurance is nice, but treating it as your primary insurance requires additional info. I always treat CC insurance as a supplement to my primary auto insurance. Since he does not have a car, he needed to make sure he was fully covered and not rely on the marketing descriptions.

    Hopefully he has home/renters insurance that can mitigate the loss.

  • Michael__K

    how did this person think they could rent a car and be covered with no auto insurance of his own and no insurance from the rental company

    Most credit card rental policies would cover this. I can’t find any non-Discover credit card policy which wouldn’t.

    When credit card coverage is primary it does not include liability. So the renter does need to accept the rental company’s ALI coverage. But that isn’t the issue in this scenario.

  • flutiefan

    none of my friends has “occasional driver policies”, and we live in NYC.

  • Joe Blasi

    It’s like the cable co. You 5-6 year old box was lost in that fire you own us $500 for a new box.

  • Rebecca

    I’m only speculating. Maybe he doesn’t have a car. I am under the impression that many people living in NYC don’t have cars.

  • Lindabator

    You are still responsible when YOU have the car – always has been that way

  • Lindabator

    Obviously, since there was a police report, they found no collusion with the vendor to scam this man out of money — cars DO get stolen, you know.

  • Rebecca

    I attempted to report my car as stolen once. It turned out it had been towed from my parking space by the tow company; the police actually had me call the tow company because it happened so often. A long story, but they illegally towed my car from a parking space I paid for and was assigned by the rental company. Someone else’s space had a car parked that wasn’t supposed to be there. They called to have it towed, the tow company actually towed 4 cars away, 3 of which were parked in their assigned spaces. It took the police and several phone calls from the rental agency to get them to release my car to me without paying for the tow.

    When you park on the street, it’s possible he thought the car got towed. There’s all sorts of scammy tow companies in all big cities with street parking and pay lots. Perhaps he was trying to track it down thinking it had been towed? Just a thought

  • Tanya

    I voted yes, just to be sure Budget is only asking for the depreciated value of the vehicle. Most courts will use the blue book value. Which I just looked up, and the 22k may not be far off. It will depend on the mileage. I think this is one instance where Budget is not in the wrong. They do just need to prove up the 22k they are asking for. I do not think Budget should have to eat the cost of the new vehicle.

  • PolishKnightUSA

    Hehehehe.

    I know that there’s a capital depreciation loss for business for these assets (after 5 to 6 years, they’re paid off).

    It’s a challenge to get to take this to court because there’s usually an F-you arbtiration clause in the agreement combined with a requirement to pay legal fees if the claimant loses.

  • Tom McShane

    Since most people are smarter than I, I will now have to purchase Smart Insurance. Until today, I was blissfully ignorant of that need
    Darn you Chris Elliott!

  • Doug_S

    I voted no because, while I feel awful about this, the loss of the car is obviously a result of the theft. Does regular CDW even cover theft? It doesn’t in much of Europe, and I fear this claim might have been rejected even if Corporan had purchased CDW from Budget. This is the kind of thing I always worried about before I bought a car and had car-rental insurance of my own. So I used an Amex add-on policy for which I paid a reasonable by-the-rental price instead of an unreasonable by-the-day price. That policy covered theft.

  • Pat

    If I remember correctly from when I had a car stolen. The damage was not handled under collision. The repairs were handled under the comprehensive coverage and the contents (golf clubs, etc.) were under my renters. So it would be correct that the collision coverage would not cover theft, even if he had auto insurance.

  • polexia_rogue

    “He should have bought Budget’s optional insurance.”

    this site is featuring back to back stories where the OP put WAY to much faith in their credit card’s coverage.

    let the car rental place get their commission- in exchange you will have the peace of mind.

  • Barthel

    As others have suggested, the state department of insurance may help get Discover to pay. If Discover won’t pay, cancel the Discover card and never use them again.

  • cscasi

    One would think he would ensure he has overage when he rents a vehicle if he does not have car insurance; perhaps, because he uses public transportation in his daily life. And not checking the coverages that his credit card offers on car rentals when he uses the card to pay for a rental is, well, his fault. Most people who have credit cards and rent cars know that different cards offer different coverages and most offer only secondary (a few are primary) for collision (collision damage waiver- CDW). Since his Discover card was secondary to any other (which he has none). If he had a collision, the insurance on the card would pay because he has no other insurance, but NOT for theft of the vehicle.
    However, how badly was the vehicle damaged? Is it repairable? If so, would it be less to repair (less than $22,000) or does totaling the vehicle come out less?
    Sorry, he is learning a hard lesson

  • Rebecca

    I was curious if Budget would have covered this, so I looked:

    “LDW isn’t insurance – it’s an option that relieves you of financial responsibility if the rental car is damaged or stolen. LDW is highly recommended for the uninsured but even if you own a car and have automobile insurance, you should consider accepting Loss Damage Waiver to better cover yourself.”

    So their coverage WOULD cover a stolen car. Now, this guy didn’t have car insurance. I feel awful he’s out so much money, BUT he is responsible. Seeing as he doesn’t have car insurance, he should have purchased the LDW.

  • cscasi

    I believe Budget doesn’t really care because the rental contract he signed states he is responsible for all damages, theft, etc., if any insurance he might have does not pay for whatever reason.

  • cscasi

    If budget can show that the vehicle has to be totaled because it would be more expensive to repair that it is worth.

  • cscasi

    “Corporan says he looked for the car for the rest of the day and finally, the next morning, filed a police report”.
    There is a police report, according to the above sentence in the article.

  • cscasi

    Budget could show him the repair estimate and if it is more than he would pay for the total loss being claimed, it would be cheaper for him to pay the $22,000. Perhaps he could get Budget to release the vehicle ot him after he pays for it and he could sell it for salvage.

  • cscasi

    And, you do not know what options the vehicle had in it or if it was just a base model. I am sure if he asks, Budget can provide him what the car cost and what the depreciated value would have been at the time he rented it.

  • cscasi

    And, in many states, if one has an accident that is his/her fault (whether he/she is driving it or an authorized user) the person’s insurance premiums are likely to go up for several years (depending on the amount of damage), unless one has a policy with “accident forgiveness”.

  • IgorWasTaken

    I didn’t say it was collusion/scam; I suggested Budget could be found liable (or partially liable in certain states) IF they did not use reasonable care to protect the keys from being duplicated and/or the key systems of their cars from being hacked. If so, in this case it would be akin to renting out a car that had worn brakes and then the renter rear-ends another car. Initially we’d see the renter being liable, but if it’s shown the breaks were not in good condition, the liability would be on the car rental company.

  • Jayne Bailey Holland

    Back in the late 80’s my husband rented a car through national car rental. He used his american express card. As we were driving out of the lot, we realized the car reeked of cigarette smoke, and I have allergies. we asked for a different car. They gave us a jeep cherokee. We drove several hours to a motel, locked the car, and went inside for the night. The next morning, our vehicle was not there. We called national and immediately they brought us another car. A week later we found that the car had been stolen and was abandoned still running in Hartford Ct. There was damage to the car. First bid was 20K. After calling American express, we were told that in the fine print their card did not cover “Jeep ” products. the note was written about off road vehicles, but American express said in fact, we did have a Jeep Product. My husband negotiated a smaller amount, but it was right there in the very small print. If using a credit card for auto insurance, you really have to READ the paperwork before you can count on them to cover an accident or theft.

  • jamieleeeeee

    My point wasn’t about if there are other possible costs increases due to making an insurance claim. It was that, at least in Mass, that the individual who owned the car would have recourse through their own car insurance to replace it and they would not be out a car (or the cost of that car).

  • Pat

    The story indicates that Discover’s coverage is secondary, not primary. Also auto theft is not covered in auto policies that I had / have as collision, it covered under comprehensive. So Discover’s collision coverage would not apply in this case. If Discover’s coverage also includes comprehensive, then there might be some coverage.

  • cscasi

    Probably. But, if Budget makes a claim or claims on theft of its vehicles, doesn’t you think its premiums would increase? Why should it subject itself to that when it offers the renter insurance to cover him/her?

  • cscasi

    Right. But, it would probably cost more to take them to court that it would to just pay for it; especially since you sign a contract outlining your responsibility for the equipment it lends you.

  • Kerr

    Correct, either he can take possession of the salvage or agree to pay Budget an amount that is less net salvage.

  • sam

    As a car-less NYC resident, this is the primary reason that I do pay for the rental company insurance on the extremely rare occasion that I do rent cars – I obviously don’t carry my own car insurance for my nonexistent personal vehicle. While I agree that it’s overpriced and I’ve never “needed” it, the peace of mind that comes with not having to stress about anything ranging from the spontaneously appearing dent/scratch up to and including and incident like this is worth the expense (to me!). Particularly given, in NYC, many things can happen that you have no control over. When I did own a car years ago, it got dented while sitting in a parking lot.

    My parents’ “city” car, which has the passenger side mirror permanently duct taped back in place thanks to the number of times it’s been knocked off due to passing vehicles, has been sideswiped by passing delivery trucks, requiring the entire door to be replaced. Also, the one time they drove the “good” car into the city from their weekend place because the city car was being repaired, they parked it directly in front of their building, which had scaffolding up. One giant piece of construction debris later, and, among other things, ALL of the windows were smashed out and had to be replaced. And none of these are counting the incidents that involve anyone being physically *in* the car and even theoretically being “at fault”.

  • Michael__K

    Every credit card rental policy refers to their coverage as “secondary.” Yet they all have language such as the following:

    If you have no other insurance or your insurance does not cover you in territories or countries outside of the United States, coverage is considered primary coverage.

    The problem here — as explained in Discover’s letter to the OP — is that Discover specifically excludes losses caused by theft. I can’t find any other credit card policy which excludes this.

  • MarkKelling

    My insurance agent told me they are primarily insuring the car not the driver so it is not possible to get auto insurance if you do not have an auto.

  • HawaiiShoeGirlie

    I feel for him, I really do. But if you don’t already have car insurance, and are relying solely on your credit card coverage, you should purchase the rental’s company’s coverage for peace of mind.

    Also, if my car went missing, I wouldn’t wait to file a police report! I’d call right away, who knows, they could have found the car prior to all the damage inflicted on it.

    Like I said, I do feel for him, I would be sh*tting bricks right now if I was told I owed $22,000 (I have exactly $31 in my bank account right now). Best of luck to him, whatever the outcome may be.

  • MarkKelling

    Car rental companies do insure their autos. You will find the “Certificate of Self Insurance” or similar form in every rental car glove box. It basically states that hte company agrees to pay for damage caused by the vehicle within reason (i.e. liability insurance). But not damage TO the vehicle.

  • gpx21dlr

    He needs help. I wouldn’t like a $22K either. You may not be able to help but your voice is “louder” than his.

  • HawaiiShoeGirlie

    Also, just to note how you should expect the unexpected: I rented a moped a couple of weeks ago, and they offered a full walk-away insurance coverage for $25. None of my friends purchased it, but I did because I would rather pay $25 than $2,000 for a replacement moped if something happened. And good thing I did, because at one point I lost control and ended up sliding the moped along the gravel. Ripped off the side view mirror and added major scrapes and dings along the body. Returned the moped with a “sorry!” and walked away, no additional charges.

  • MarkKelling

    I’m sure they have insurance to cover things like hail damage when parked on their lot or vandalism and theft from their facilities. They do self insure for liability coverage. Collision is a different thing since it can only happen when the car is being driven.

  • Pat

    The story states it is secondary COLLISION coverage. Theft is covered by comprehensive, not collision. When my car was stolen, covered by comprehensive. When a chunk of metal was kicked up from another car and damaged my car, covered by comprehensive. When I was t-boned by a person that ran a stop sign, covered by collision.

  • AJPeabody

    Back in the days when customer service agents served customers, we rented a car on vacation. The agent checked our coverage and found that we would not be covered for theft, and we added a cheap add-on. Of course, the car wasn’t stolen. If the renter has little in assets, Budget could be out a lot of money in a case like this. It would benefit Budget and their renters if Budget similarly checked coverages. They then could have warned the renter that Discover did not cover theft. Since Discover is unlike all other credit card insurances in denying theft, one might make the case that Budget was in some way negligent (failure to warn).

  • Michael__K

    You are imposing terminology that isn’t germane here. The word ‘comprehensive’ appears nowhere in a typical car rental insurance policy. And yet this is normally covered. Here is some typical language from a (non-Discover) policy:

    Benefits
    Subject to the terms, exclusions and limits of liability set out in this Certificate of Insurance, You are provided with the same protection against losses arising from the contractual liability assumed when renting and operating a rental vehicle as You would have if You accepted the rental agency’s collision or loss damage waiver (or similar provision) up to the actual cash value of the damaged or stolen rental vehicle as well as any reasonable, valid and documented loss of use, reasonable and customary towing charges and administration charges resulting from damage or theft occurring while the rental vehicle is rented in Your name

  • 42NYC

    Usually i’m against the letter writer but not this time. Yes, he is liable for damage. However i’d need to know:

    1 – What is the (heavily discounted) base price Budget paid for this car
    2 – How many miles were on this car at time of theft, whats the correct value of the car after mileage is taken into account.
    3 – What is the salvage of the car? Even if it’s a total loss, there’s probably still several thousands of dollars to salvage between parts, tires and scrap metal.

    What’s left after subtracting 2 and 3 from #1 is what the letter writer owes. It’s got to be something less than $22k.

    Living a block off of University Place and growing up in Pleasantville, NY this story hits a little too close to home.

  • 42NYC

    correct. I just bought a car after living here for 12 years and am the first of my friends to have one.

  • Pat

    Direct from Discover’s T&C.

    “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.”

    It is collision coverage, not comprehensive, which would cover most of the exclusions.

  • Zod

    Several years ago, we rented a Jeep on the Big Island of Hawaii.I declined the rental company insurance because my AMEX gave coverage. Plus, I paid the $19 extra to AMEX for the added full coverage that covered theft, damage by fire and what-not.
    While driving off-road to get to the Emerald Beach at South Point, I ran over the remnants of an Ohia tree and a stick punctured the tire. I swapped out the spare and decided to not continue the journey because now I didn’t have a spare in case I had another incident. We returned the car to the rental office and I expected the credit card to cover the damage. Well…it seems that the $450 (tire plus loss of rental income) wasn’t covered by the credit card insurance because items that are consumable (tires and such) are not covered unless they were damaged in an accident. So, if I had totaled the Jeep, damage to the tires would be covered and my out of pocket would be zero. But because I only punctured a tire, it cost me $450…I think that people who sell insurance are the *KINGS* of loopholes!

  • Michael__K

    We agree that Discover specifically excludes theft (among other scenarios) from its rental Collision coverage. Show me any other credit card policy which does so (regardless of labels). I think you will have a hard time finding any.

  • Harvey-6-3.5

    This is a very interesting point that Chris should raise. If Budget has theft insurance that covers this loss, and they were made whole, then the renter may still be liable, but it would be to the insurance company,not budget, and for the amount they reimbursed Budget (which might be the actual amount of the loss).

  • jim6555

    I believe that the LW owes Budget Rent ACar something, but perhaps the amount they are seeking. The value of the car is based on several factors including the age of the vehicle, the number of miles on the odometer, the condition of the vehicle and the fact that it has been a rental.

    The age of the vehicle and the mileage can be found on the rental agreement. Any damage noted on the agreement should be deducted. The fact that the car is a rental must be disclosed in most states and that information will lower what . The value of the vehicle could be less than $22,500.

  • Pat

    Yes, each card has it’s own T&C based on the insurance company that underwrites the coverage. In this case, the OP is SOL He needs to negotiate a settlement with Budget in the car’s value and how to pay for it.

  • Kerr

    Your car’s had a tough life!

  • Pat

    Each one was a different car covering over 30 years. The one that was stolen had to have an exorcism done because of all of the things that happened to it.

  • Michael__K

    Your question was: ““how did this person think they could rent a car and be covered with no auto insurance of his own and no insurance from the rental company.” The answer is he didn’t understand the gotchas in Discover’s T&C’s (which are fairly unique).

  • Pat

    There are no gotcha’s. He just did not bother reading. I found the document to be very easy to understand what is and is not covered. He just experienced a very expensive life lesson.

  • Michael__K

    Of course it’s a gotcha. You have to read 4,000+ words to understand that their advertising (“With built-in Auto Rental Insurance, when you use your Discover card you can stop worrying and start driving.“) is nonsense.

  • Extramail

    We do not know thtat budget is out a car because the renter did not get a loss report. All we know is that the car was recovered and damaged. I’d want to know how damaged before I coughed up $22000. But, then again, I wouldn’t take it for granted that my credit card would cover me if I didn’t have car insurance.

  • Extramail

    Nowhere does it say that budget had to replace the car because budget did not provide a loss report. Not saying it’s not a total loss but I want proof first.

  • Extramail

    If I total my personal vehicle, my insurance company is not going to buy me a brand new car. They are going to pay me the current value of my car and even that figure will probably be lower than I may think it is.

  • Extramail

    My car was stolen several years ago and was in an accident within an hour of having been stolen. I was wondering why he went looking for it in the first place. How do you look for a stolen vehicle? I reported my car stolen within five minutes of discovering that it was gone. I will admit that it’s a weird feeling to walk back to where you knew you parked your car and it’s not there. You do question if maybe you didn’t park where you thought you did but I didn’t have a car so I couldn’t go looking for it even if I knew how to look for it.

  • Nathan Witt

    The car was damaged because it collided with other objects, no? It isn’t as if the car was stolen and taken to a chop shop or shipped to South America. The car has been found, is no longer stolen, and is damaged. I realize that this is kind of a tenuous argument, but it’s at least worth consulting an attorney to see if a case could be made. Also: New York caps full-coverage rental insurance at $9/day (or at least, it used to). At that price, it’s ALWAYS worth getting.

  • Tom McShane

    Most comments I’ve ever seen on this site.
    So, it is ACTUALLY TRUE that car rental companies carry no insurance whatever on their vehicles!? Seems far-fetched that a company would carry no insurance on their most valuable possession. So whenever a renter without substantial resources or insurance ruins a car, they just write it off?
    I suppose the $$ they get from several renters for the same dent and hefty daily insurance fees that folks agree to make up for it.
    Can anyone think of another industry where the companies don’t insure their assets?

  • Tom McShane

    I certainly agree with your first sentence.

  • technomage1

    Take the case. The car was stolen. You’d think the rental agency’s own insurance would cover theft of one its fleet, regardless of if it was in their possession at the time or not.

  • Éamon deValera

    Generally tires aren’t covered by automobile insurance for damage. They are covered for theft.

  • Éamon deValera

    I see an inconsistency. At first it is mentioned that a police report was filed by the renter, and then that there was no police report because the car was found. That the car was found is immaterial, the crime took place and I must assume from what was written that the police report was indeed filed. There may not be a second police report from the recovery of the car it may simply be a supplement to the first.

    Not having a personal automobile policy is very costly in this instance. Even a named non-owner policy would not cover the renter in this instance as it excludes comprehensive coverage (it is liability only).

    I can’t see how the renter can avoid paying for this loss out of pocket other than having the car thief pay for the loss. If arrested the criminal can be sued in civil court for damages, or more easily if convicted in criminal court ordered by the court to make restitution. I wouldn’t hold your breath for that, we’ll see Haley’s comet first.

    It seems that negotiating with the rental agency is the best course of action. He most assuredly owns them damages including loss of use. If he were to find comparable sales of that model of car on the used car market, and if possible sales by rental car companies of that vehicle after its weeding from the rental fleet those would make reasonable benchmarks from which to begin negotiations.

    Not having personal car insurance can be overcome by some travel insurance polices that will provide primary cover and include damage to the rented vehicle. For example the Axa Gold plan as shown on squaremouth.com includes rental car coverage “Collision loss/damage insurance for rental cars covers the costs of damage to, or theft of, a rental car.” It is excess, meaning it pays last, but if there is no other insurance it would cover the theft or damage of a rental car. A week long policy for travel in the US was $79.

    If the renter had homeowners insurance (or renters which is truly a type of homeowners) AND an umbrella policy, there is a possibility, albeit remote, that it may cover it. However umbrella policies generally exclude liability assumed by contract which this certainly is. Contacting one’s insurance agent would be prudent. If you got your insurance online you’re probably not going to be pleased.

  • Éamon deValera

    That brings into question insurance licensure. The only people who can provide such ‘coverage checks’ are licensed insurance agents and attorneys. Some states do require a license to sell rental car insurance but it may be an agency license, not individuals.

    A car rental company simply wouldn’t delve into assessing a different company’s policies as there is far too much liability involved. I’m going to venture a guess that rental car agents don’t carry errors and omissions insurance that would cover any ‘professional’ advice they gave involving someone’s personal auto policy.

  • Éamon deValera

    It could have been much worse. He could have been involved in an accident in which someone was injured. Certainly the rental car company carries liability insurance but it covers them not the renter (in a sense it covers the renter but only up to the state mandatory minimums). He could be out millions not just 22K.

  • Éamon deValera

    Most rental fleets are not insured for theft. The biggest theft from rental car fleets is conversion, in which the car is ‘stolen’ by the renter through fraud. They may, and probably do have fraud insurance, they don’t generally have theft insurance. If they do it is on an inventory basis, not a per unit basis.

  • Éamon deValera

    Discover, or its insurer, can’t pay if it is not a covered loss. This is not something that can be paid on a good will basis.

    Looking at the Discover card policy it says “In consideration of the premium paid by the Policyholder as required, and subject to all the terms of the Policy, the Company agrees to reimburse on an Actual Cash Value basis either the Insured or the Rental Agency for repair or replacement of the Rented Automobile as a result of Collision Damage to the Rented Automobile. The Company’s liability will be for a maximum reimbursement of $25,000. In no event will the Company be liable beyond the amounts actually paid by the Insured or the Rental Agency.”

    This as it was not collision damage, but theft it cannot be paid. Had the renter or an authorized driver caused the same damage in a crash he would be covered but since it originated with a theft it cannot be paid.

    Discover further clarifies: “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.”

    So we can see theft is specifically excluded.

    This is fair. If insurance companies paid out claims as good will gestures insurance rates would rise for all of us.

  • Éamon deValera

    People keep saying ‘fine print’ it isn’t in the fine print, in fact there are laws which specifically address the font size or disallow fine print in insurance contracts.

    This is on the Discover website and in the disclosures mailed with your card. Failing to read and understand the policy is unfortunate, but it is certainly not deceitful on the part of the insured.

  • Éamon deValera

    No, it is the same size print as the list of what is covered. It is not sneaky.

    Read your coverages, ask for the complete policy if the summary is not clear to you. Alternatively purchase trip insurance that includes rental car. It is very inexpensive, much less than the CDW from any rental car company.

  • Éamon deValera

    Some do, some don’t. Discover covers damage to the vehicle in Ireland which most if not all other cards eschew.

  • Éamon deValera

    They can’t be ‘gotchas’ if they are available to read before you rent the car, heck they are available to read before you apply for the credit card.

    Simply assuming that something is covered is foolhardy. Reading the policy or summary description will clear up any doubts.

    If you buy homeowners insurance do you expect it to cover your date who gets food poisoning when you go out to eat. If she eats at the restaurant it doesn’t; if she takes the restaurant food to go and eats it in a park it may very well cover it. Read your policies.

  • Carchar

    Seriously? “Corporan says he looked for the car for the rest of the day and finally, the next morning, filed a police report.”

    When our car disappeared from its parking spot in NYC, we called the police right away. Where does one begin to search for a pilfered car in a big city? I do hope this is not the case, but the theft part kind of sounds like a cover story to me.

  • AMA

    All the cars I’ve rented in the past two years have BOTH sets of keys and transponders locked together with an impermeable metal cable. (Believe me, I have tried and tried to get that cable off and it’s impossible without bolt cutters.) So I think it’s specious to suggest the thieves duplicated a key somehow.

  • AMA

    Maybe he thought it was towed to another block due to street cleaning or something.

  • AMA

    Hmmm…..maybe OP could at least deduct the value of the tires!

  • Michael__K

    they are available to read before you apply for the credit card

    Nope. The marketing materials say you need to login to see the terms & conditions. And you don’t have a login before you apply. Gotcha.

  • Michael__K

    Good luck finding a rental company in Ireland which accepts Discover cards. Even when according to Discover, the merchant is obligated to accept it.

  • Joe Blasi

    but then the third party victims will sue you and all others letting the courts sort it out.

  • TobySparky

    You can, indeed, get something called a non-owners auto insurance policy. It can be pricey (I was quoted $975/year, but I live in Manhattan, so it may be lower elsewhere), but if you regularly rent cars a few days a month it’s worth it. And it’s much more reliable than taking whatever is offered, since you know exactly what you signed up for rather than having to decide on the spot. I know Geico offers these plans, as do several other national agencies.

  • Grace

    I disagree with the rental company. First, the damage was not caused by a theft but a collision so the collision policy should cover it. Second, my guess is that Budget actually has their own insurance on the vehicle and should use it. EVERY auto rental company has their own insurance on their vehicles. Third, even if Corporan paid for the auto, my guess is that Budget will also collect under their policy and will also take the auto off as a loss on its taxes.

  • TobySparky

    In NY state all rental companies are required to include the mandatory minimum coverage at no extra cost. Of course, this means only liability insurance, but it also means anyone can rent a car in NY state without having to prove coverage or pay extra for the mandatory minimums. I don’t necessarily fault someone for mistaking secondary *collision* coverage with secondary *comprehensive* coverage, though; I can see how easy it would be to assume the latter came with the former (since, in my experience, most car loan companies require lenders to carry comprehensive insurance for the duration of the loan, resulting in few policies being issued *only* for collision).

  • TobySparky

    In NY state basic liability is included with all rentals. You can choose to purchase supplementary liability insurance, but it’s not required.

  • TobySparky

    In NY state car rental companies are required to include mandatory minimum liability insurance on all rentals. You can purchase supplementary liability insurance (SLI) but aren’t required to.

  • TobySparky

    As I’ve noted in my comments above, NY state requires car rental companies to include mandatory minimum liability insurance with all rentals. So he was definitely insured, just not comprehensively.

  • Fishplate

    They are very likely self-insured.

    I manage a vehicle fleet for my employer. Yes, we get a discount. But we buy a lot of vehicles. The discount is around 20% to 25%. For a 2016 Ford Focus, MSRP $17,225, our price is $14,645. And we buy a lot of vehicles.

    Also, we are self-insured. Lots of companies that have fleets are. But when they have a loss, they should be made whole by the person who took responsibility for the vehicle.

  • With all the horror stories you post, I would avoid renting any car at all costs. Really, this is a WTF…. Rental cars never get stolen? Really? & the rental companies are not insured for this?

  • Tom McShane

    Thanks for your reply. I’ve heard of being self-insured. Is there an actual difference between being self-insured and not having insurance?

  • Todd Brown

    If a police report was never filed, he could argue that the car was never “stolen”. He should file the damage claim since it wasn’t the theft that caused the damage, it was probably due to colliding with “upset or collision with another object”, to use Discover’s coverage language.

  • Fishplate

    When you are self-insured, that fact is registered with the state of residence or incorporation, if appropriate. This provides proof of insurance which you are required to have in most cases to register and operate a motor vehicle on public roads.

    If you are not insured, then you don’t have any such registration, and no proof to show.

  • Noah Kimmel

    who do you think should pay? The car rental company who rented in good faith to the OP or the credit card company that offers secondary collision damage protection or the customer who (fairly or not) did not understand his options but still chose not to protect himself.

    My big gripe with this comment is the expectation that someone else pay for the OPs mistake. I’m not saying he is dumb or anything like that, and it certainly is unfortunate and can happen to anyone, but it is not like the rental company is charging him for the fun of it. Just because they are a big corporation doesn’t mean they should let everyone off the hook with big bills – that would bankrupt them. Cars and damage are a legitimate cost to their business, it would take 100 rentals’ revenue to make up that loss which is why they offer their own coverage.

    I do hope the OP, discover, and rental car company can come to a more balanced outcome.

  • Noah Kimmel

    I’m an NYC resident and rent cars weekly. I dont have primary insurance because I don’t own a car. I do take LDW and use credit card with PRIMARY insurance as a result. However, it took many phone calls and hours of research to better understand what is and is not covered and I still have many gray areas. Would be nice if there was a table with scenarios, inclusions, exclusions.

  • BMG4ME

    That’s along the lines with what I was thinking. Even if a report was filed, does it count as being stolen if it’s returned?

    The claim is for damage, not for theft. I think it should be covered. I also think that next time they should use one of the majority of cards that DOES cover theft.

  • MarkKelling

    The key wording was “from their facilities”. In other words if someone or some group breaks in after the rental agency closes for the night and steals a dozen cars, they have insurance for that. But not for theft from a renter. It all comes down to cost and covering theft while the cars are rented out would be much more expensive.

  • MarkKelling

    You are sounding like a lawyer. :-)

    No, this argument would not hold up. The car was damaged while it was stolen and not in the control of the renter. Therefore, this was not collision as defined in the Discover terms.

  • Michael__K

    Good point. I remembered the cap on CDW rates but I forgot about the mandatory inclusion of basic liability in NY. Thanks.

    http://www.ag.ny.gov/consumer-frauds/car-rental-tip-sheet

  • IgorWasTaken

    I missed that angle completely. Yes, worth a shot.

  • Michael__K

    Here is a company that sells fleet insurance to businesses including rental car companies:
    https://www.trustedchoice.com/commercial-vehicle-insurance/coverage-types/fleet/

    I don’t have any special knowledge as to what Avis-Budget Group does, but these excerpts from old SEC filings suggest that they rely on self-insurance reserves:
    http://www.wikinvest.com/stock/Avis_Budget_Group_(CAR)/Self-insurance_Reserves

  • Ben

    I don’t put any stock in such marketing language, plus directly below the section you quoted it specifically says “you’re covered if a collision damages the rental vehicle.” and provides a phone number to ask questions.

    I know exactly what is covered by my personal policy and by my credit card CDW, anybody who rents a car should be, too.

    It’s not clear that the consumer in this case even has liability coverage. I feel really bad that he’s in this situation, but he should have been more careful before assuming he was covered.

  • Michael__K

    A collision DID damage his rental vehicle…

    I’ve learned to be cynical about advertising promises but consumers shouldn’t have to be. I also don’t put much stock in verbal responses from call center agents, but that’s just me.

    @TobySparky:disqus correctly pointed out that basic minimum liability coverage is automatically included in the rental charge by law in New York State.

  • FiendishThingy

    Re-read the story – he does not have any car insurance of his own.

  • Gary K

    Incorrect where you say “Every credit card…” — cards such as Chase Sapphire Preferred, Chase United MileagePlus Explorer, etc. give Primary coverage, and the latter has this on their webpage:

    “Auto Rental Collision Damage Waiver

    Decline the rental company’s collision insurance and charge the entire rental cost to your MileagePlus Explorer Card. Coverage is primary and is provided for theft and collision damage for most cars in the U.S. and abroad.”

    I agree with others stating the Budget is entitled to some compensation for the loss, but think that Chris should advocate to a) help get the documentation in order, and b) determine if $22K is the proper amount. I’m not a lawyer, but wonder about how that was calculated, given factors like fair market value, wear and tear, salvage value, etc.

  • Tricia K

    I feel badly for this person and don’t envy his position at all. At the very least, you’re right, it is a teaching moment for others. I remember a story from a while back where someone who owned an old
    Mercedes and only had liability on it, and damaged a much newer loaner car, and wasn’t covered because he didn’t have collision coverage on his policy. He didn’t think it was fair because he felt the dealership should have told him he didn’t have the right insurance. It is very important to read what any policy covers, whether from the rental car company a
    Credit card or your own insurance. Not all of them cover liability either. Rental car companies care about their cars–not the people that ride in them. You have to protect yourself. And I say this with my own personal learning experience in Ireland that cost me over $2,000. no
    Matter how much I might sympathize with this person, I just don’t know how you are going to win this one. I’m afraid he is in for a much more expensive lesson than mine.

  • stephen_nyc

    We don’t tow it to another street if you’re illegally parked. Usually you’d get a ticket. And if your vehicle is towed, it goes to a depot.

  • stephen_nyc

    I hope you didn’t get a case of road rash after laying down the moped like that.

  • HawaiiShoeGirlie

    Some bruises, sprained wrist and my knee got banged up. Thankfully I was wearing jeans and a long sleeved shirt that took the brunt of the impact. We were only going about 20mph when my friend stopped abruptly in front of me, I swerved to avoid her, hit a curb and lost control. It wasn’t as bad as it could have been for me…the moped on the other hand…yikes.

  • Éamon deValera

    If they take Diner’s Club they take Discover.

  • Éamon deValera

    They are available is not always the same as they are available online. They must, if you request it, send you all of the materials before you apply.

  • Éamon deValera

    Except he didn’t have insurance for theft. The car rental companies don’t have insurance for theft simply because it isn’t cost effective to do so.

  • Pat

    That would be called fraud.

  • Michael__K

    Except when they don’t (check the linked article).

  • Michael__K

    They must? On what basis? They’ll send you the basic mandatory disclosures on rates, fees, etc. I’ve never been able to receive all the other terms before applying (and I’ve asked), so either multiple issuers are breaking the law or you are making stuff up.

  • mbods2002

    I did a little research on this and a person can get good insurance from a car insurance company, for a good price and not own a car. I typed in “occasional driver car insurance” or something like that. If you rent weekly, I’d say you were more than that! Might be worth looking in to so the above never happens to you. Awful to get stuck like our poor Mr. Corporan….

  • RBXChas

    This is where my mind went. Allegedly there was no report of theft because the car was recovered, so this may have become a collision claim.

  • RBXChas

    Presumably Budget’s insurance policy provides for subrogation against responsible parties, so it is likely the insurance company is who is going after him, not Budget. I doubt there’s a double recovery, but you never know. He may need to deal with them rather than Budget directly, which, sadly, may be easier.

  • Regina Litman

    You’re right, and as an insurance company employee, I should know this. My question should have been why Discover doesn’t provide comprehensive coverage that would cover not only theft but flood damage and hitting a deer or other animal, among other things. It’s probably standard credit card industry practice to only offer collision protection, but so much of what can go wrong falls under comprehensive, also known other-than-collision (and, for all those abbreviations-lovers out there, OTC) coverage. And then customers who thought they were covered really weren’t.

  • Ben

    A collision while an authorized driver covered under the CDW policy was not in control of the vehicle, typically covered as comprehensive not collision.

  • PolishKnightUSA

    I hate to make a plug on Elliott, but I have the $25 term coverage via Amex that is more inclusive and the default that comes my credit card. The credit card “secondary” insurance is pretty weak which invites all the shenanegans we read about here.

    But even with all that said, even if someone pays the full super-fees for the insurance offered by the rental car company, it’s STILL possible one could not be covered for something obvious.

    Funny story: When I was at Radio Shack (just before they shut down in my area), I saw this ad for mobile phone insurance they were selling with a picture of a phone inside of a fish tank and the title: “If this happens, you’re covered!”

    For fun, I took it home and read the tiny print (and a lot of it) and guess what: “Coverage due to negligence is not covered. Water damage isn’t covered.” So the picture and title was open fraud. I was amazed.

  • Pat

    And if he claimed that he caused the damage through an accident and not the car was stolen, that is fraud. The cost for that is much higher than paying for the cost of the car.

  • RBXChas

    I wasn’t suggesting that he lie and say the theft didn’t happen (I agree that it is fraud), but it seems that the police’s “skimming over” the theft issue could work in his favor on a collision claim. The question is the language in the Discover policy as to who causes the collision. Which also makes me wonder, if someone had hit the car while it was parked and took off, would he be covered?

  • Pat

    The insurance company would do their own investigation before paying the claim. When I was t-boned, the other person’s insurance company did a full investigation of the accident outside of the police report. After they were done, they did everything to make sure I was happy and whole.

  • Ianto Jones

    Please forgive me if someone else already asked this, but – if the car was recovered (albeit severely damaged), then why wouldn’t it be covered under the damage insurance?
    In other words – if the client rented a car and *himself* caused damage to it, it would be covered, so why isn’t it covered if the damage occurred while it was under his responsibility/authority?
    If it were still missing, that’d be not-covered due to theft, but since it was recovered, wouldn’t it be covered (though he’d owe for the extra day(s)/late return fees, etc.)?

    Please forgive me if I’m being naive, I’ve only rarely rented cars, for cross-country drives (but twice *have* had damages covered, once in a parking lot sideswipe, and once undercarriage damage from a large pothole I couldn’t avoid).

    I realize this is too obvious, but it seems plausible to me?
    In other words – if he’d neglected to mention the theft, and simply “returned ” the damaged car on the recovery date, would he have been covered?

  • AAGK

    The insurance company that has accepted premiums for theft coverage should pay. Isn’t that what it is for?

  • AAGK

    If my house were robbed, I would expect my homeowner’s to cover the loss.

  • Pat

    No insurance company accepted any premium for theft in this case. That is the issue. They only had collision coverage and no comprehensive coverage which covers theft.

  • AAGK

    Well then the dealership should review its insurance policies. If it was stolen off the lot, then what would it do? Also, since when is some rental Taurus 22k? That is absurd. The party best equipped to handle the loss should probably protect itself rather than rely on everyone off the street who wanders in.

  • AAGK

    I insure my home, property, etc based on the assumption that if something bad happens, I will have to bear the risk. I do not assume someone working in my home has health insurance so that if they are injured here then they are all set. I protect myself from these scenarios.

  • AAGK

    Also, since I live a block away I can tell you parking a car on University Place is safer than putting it in a garage or even leaving it on the rental lot. I can’t find a single reported crime on University Place since 1991. The consumer here did not do anything wrong and to send him a bill like that for some used rental car is absurd.

  • Pat

    What dealership? It was stolen off the street where he parked the car he was renting.

  • Pat

    The person made a big mistake because he did not have proper insurance to cover theft of the vehicle. He had collision but did not have the comprehensive coverage needed to cover theft of the car. Budget is out a car and Discover denied the claim because they only cover if he got into an accident. Since he did not have insurance to cover the theft, he is responsible for the value of the car. Nothing absurd about it.

  • Tanya

    This would be insurance fraud. The car was damaged as a result of theft, not as a result of him having an accident. I do feel for the OP, but you never lie about insurance claims. Ever. Period.

  • Ianto Jones

    @Tanya:

    I don’t mean lying, even by omission.
    I am asking about a wider view.
    I phrased the idea I’m trying for poorly.

    To phrase it differently (to try to explain what I am getting at), I’ll try a different example.

    If I take responsibility for an item, let’s say a library book, my library card agreement says that I agree it’s mine to look out for while it’s outside walls of the library. If I don’t return it, I owe them a new book; if I return it late, I owe them a late fee, if I return it damaged, I may owe them a new book – and if it was a very expensive book, and was damaged at (or stolen from) my home, there is a slim chance my renter’s/homeowner’s insurance might be able to assist me.

    If, while the book is in my care, my roommate spills coffee all over it (or a friend of his, someone I don’t know (but that he invited over) does so, or absconds with it, or ‘borrows it’ for two extra days), the same terms as above, apply.

    In other words – my agreement with the library is affected by the status of the book (late, damaged, lost) and from the library’s perspective, the important issue isn’t who spilled the coffee, but that the book is now half-brown and wrinkly – and was two days late, to boot.

    If I return it at that point, they don’t care who spilled the coffee; from their side, it was my responsibility to protect the book from such things, and to return it two days earlier.
    Whether the funds to replace the book are reimbursed to me from my renter’s policy is not relevant to the library (car rental agency) , and likewise my renter’s policy might cover the coffee damage though never the late fee.

    Me telling them that it was spilled by someone I don’t know, would not alter their expectations of my accountability, and I would not hesitate to explain the sequence of events as part of my apology for failing my responsibility to safeguard the book.

    Hence my question , regarding whether insurance might cover the damages while the car was under his authority, although certainly not the rental charges for returning it later than required. A stranger did damage it while it was in his care, but the same would be true if it had been totaled in a grocery parking lot while he was inside shopping?

    That is what I was trying to inquire about. Not lying to the insurance company, but instead asking how it’s relevant to their decision (client took possession/accountability for vehicle, vehicle was damaged while client had accountability for it, whether it was sideswiped in a parking lot, or client hit a tree, or the current scenario in the post above).

    To an ignorant outsider like me, a theft rider would apply to the permanent (or extended, weeks/months) absence of the vehicle, not a day or two late…?

    To continue the library book analogy, if I misplaced the book in my backpack for two days and reported it lost, the library would expect replacement — but if I then found it two days later, with pages bent, a tear in the cover, and a broken Bic pen’s ink along the side of several pages, they determine if some tape and a scrub would make it possible to continue lending it out, or whether it was a total write-off?

    Thanks for your reply.

  • Tanya

    It matters because the insurance policy he had does not cover damage/loss due to theft. If the policy was silent on whether it covered damage due to theft, he would be covered. The policy specifically excludes theft as a reason for coverage. I don’t like it, this person was a victim of a crime and is now having to pay for a new vehicle. I see your point, it was still damaged by collision, in one way or another, but it was damaged as a result of theft. Maybe an appeal to the insurance company would work here, but the wording given above is pretty clear.

    I think that most of us, with purchased insurance (not as a perk of a credit card) are covered for damage by theft, or at least can pay for that to the insurance company. To be honest, I am not an expert, and since I do own a vehicle, I have to carry insurance. I would never think that theft would not be covered under a policy, but now know to check my credit card policy if I want to use that as a back-up to mine. I just looked at my policy and I have to pay extra to be covered for damage other than collision. Therefore, I pay a premium to be covered for theft.

    To answer a few specific questions, the policy would have covered it had it been hit in a parking lot. This was not due to theft. If he hit a tree while driving it would be covered, but if a tree fell on the vehicle, it would not. I am simply going by the language in the article.

    Also, I think that the damage done was more than the FMV of the vehicle, so Budget is asking for the blue book value (or that is what I think should be checked out, make sure it really is a total loss and the depreciated value of the vehicle). If the vehicle was damaged enough, it is a total loss. Even in your example, if the book were a total loss, you would have to replace it. It would be based on your homeowner’s policy whether it would be covered or not.