You don’t have to read this site every day to know that fraudulent car rental damages are a big problem, at least as far as customers are concerned. If you’re a car rental agency, you might call it something different, ranging from “no problem” to “profit center.”
But at least one car rental company says it’s on our side. It’s Bandago, a San Francisco company that specializes in van rentals. After I wrote a story about the problem of fraudulent claims for Auto Rental News, a trade magazine, last year, I got an unexpected call from its CEO, Sharky Laguana.
Yes, he said, the industry could do a better job of letting customers know about damages. He also told me a few horror stories about vans that had been returned in various states of disrepair.
After that, I heard nothing from him. Until a few weeks ago.
“I have been giving this issue a lot of thought lately,” he said. “My company has started sending out the email below whenever we find damage on our rental vehicles. I was hoping to get your feedback. Does this look fair and reasonable to you? Any suggestions you might make?”
I’m sharing the form letter with you, with his permission.
This email is to let you know that damage was located on the vehicle you returned to Bandago. Right now our understanding is that the following new damage was located on your vehicle upon its return:
spare tire missing
We are currently investigating this damage, and will get an estimate from a body shop as soon as scheduling permits.
We find it helps if we explain our damage process upfront. Here’s a brief overview:
We are very careful with all damage claims, and every claim is reviewed multiple times at different points by different people. We will compare pictures taken at both the start and end of the rental, look at the rental agreement, review any accident report forms, and of course welcome any feedback or information you may have about this damage.
We get preferred customer rates from our body shop vendors, and every penny of those savings is passed on to our clients.
Damage is not a profit center for us (it is a significant expense!) and there is no point in the process where we experience a net gain. We value our relationship with our clients, and will be completely transparent with you at every step of the process, about what we are doing and why.
Our process in detail:
1. We are not remotely interested in charging any of our clients for damage that they did not cause.
2. We will thoroughly investigate any claim, and consider any information presented to us.
3. If we have doubt about liability, we will not bill our client.
4. We will get any body/mechanical estimate for repairs from a certified, fully licensed, and trusted shop as soon as possible.
5. Please note, in cases where the damage is purely cosmetic, we may have to delay getting an estimate in favor of honoring our existing reservations. Because we specialize in long term rentals, this can result in significant delays upon occasion. However, we will always thoroughly document the damage in question with photographs before the vehicle leaves our possession.
6. Once we have determined the amount required to complete repairs you will have the option to pay our out-of-pocket costs for repair (i.e. exactly what the repair shop bills us), plus loss of use (as allowed by law) if the vehicle will be in the shop for more than a day or two. Or, at your option, you may ask us to bill your insurance company.
7. If we bill your insurance company, we will turn the claim over to a professional claims processing company.
8. Due to the extra time, expense, and labor involved in settling a claim with insurance companies, our claim will be for all losses we are legally entitled to depending on the state the rental started in (this can include tow, repair, administrative fees, loss of use, diminishment of value, etc.).
9. Please keep in mind that you may still be responsible for the insurance deductible, as well as any expenses not covered by your insurance policy. Some insurance companies have exclusions in their policies for administrative fees, loss of use, etc. These costs can be significant. We advise checking with your insurance company before telling us to pursue the claim with them.
We know no one is happy about being responsible for damage. On the other hand, we hope you understand that there is no way we can stay in business if we are forced to absorb all the expense of damage caused by our renters. At all times we will do our best to make sure the final resolution is fair to all parties.
If you have any additional questions, you are welcome to call us at our main office: 415-401-7659, or email us at email@example.com.
Thank you for your understanding, and please let us know if there is anything we can do for you.
Bandago refers to this notification as a customer “bill of rights,” but I think it’s more of a disclosure form that addresses some of a driver’s fears about the damage claim process. Either way, I think it’s an important step toward fixing this problem.
I’ve been giving this issue some thought, too. I’m a big believer in preventive medicine, and the consumer advocate in me says that sending out a notice that says damages were discovered after you returned the vehicle should be unnecessary. Any problems should be identified when you return the car.
But I understand that’s not always possible. Sometimes, vehicles are dropped off after hours, or the staff gets busy.
So here’s a notice I’d like to see, preferably on the top of your rental agreement.
Hi, I’m your rental car. I’m gorgeous, and I know you’ll love driving me. But before you do, please take my picture.
That’s right, I’m ready for my close-up now! I don’t mind. Get me from every angle.
When you return me, please do it again — just to have something to remember me by.
If I’m damaged after you return me, you’ll need the snapshots to prove you loved me until the very end, so please keep the images for at least a year.
This would eliminate about 90 percent of the questionable damage claims, assuming that people took pictures of their car.
What would you do if you received the email from Bandago? Personally, I think it’s refreshingly honest and I might feel a little bit better about the claims process. The company should be commended for trying to fix a chronic car rental industry problem.
I hope the idea catches on.