Are car rental companies forcing you to buy insurance you don’t need?

Every road leads to ... a surcharge? / Photo by John Peacock - Flickr
Question: My wife rented a car at the Orlando airport from Budget recently. Even though she said she did not want or need the extra loss damage waiver insurance, she was informed that her car insurance was “invalid” and that in order to rent the car she needed Florida insurance.

She reluctantly accepted the loss-damage waiver. It was on the flight home she noticed the paperwork stated she did not need the insurance. I contacted Budget and it sent me a form denial, saying, “We have checked our records carefully and find that the LDW or CDW option was offered to you, and you indeed signed the agreement.”

Can you help us get our money back? — Todd Ramsdell, Omaha, Neb.

Answer: It sounds as if Budget pulled a fast one on your wife. The employee’s statements contradict the company’s own website, which clearly says the loss-damage waiver is optional, and “if you don’t need LDW, don’t buy it.”

I don’t know what happened to your wife at the car rental counter, because I wasn’t there. But I’ve heard stories about the white lies car rental employees tell customers in tourist towns like Orlando and Las Vegas.

They apparently prey on people who look like they’re from out of town and don’t know any better, trying to upsell them on profitable insurance policies. By the time the scam is discovered, it’s too late — they’re on a plane back home. Out of sight, out of mind.

Is that what happened to your wife? Maybe. What I am certain about is this: She bought insurance she didn’t need.

Of course Budget’s records will show she signed the agreement. Everyone does. But Budget can’t know what the employee told your wife before she did, and that’s the important thing. Did Budget refuse to rent her a car until she purchased the loss-damage waiver agreement?

The only way to prevent this from happening is to know your rights. Insurance is an optional product. Your wife was covered under her car insurance and chances are, her credit card offered her some protection, too. There’s no such thing as a Florida insurance requirement, at least as it applies to your wife’s rental.

I contacted Budget on your behalf. It called you, apologized, and refunded your wife’s insurance policy.

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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  • LeeAnneClark

    You’re wrong – they ARE forcing people…or at least they are attempting to.  When you are in a far-away city in the middle of the night with all rental agencies sold out, and no way to get to your hotel without a rental car, and the dweeb at the counter tells you that if you don’t buy the insurance you don’t get a car, if you don’t know your rights then you will feel forced.

    But you are right that if you know the facts then you can stand up to them, as I did.  Just take out your cellphone and ask them to repeat their illegal demand on video.  That should do the trick.

  • cheazlit

    Done correctly, electronic signatures can’t be modified.  They will become invalid if they are moved or if the original document is modified in any way.  But it is hard to know how they are doing the eletronic signatures and if that particular program has integrity.

  • ajaynejr

    “I once rented a U-Haul. The owner said point blank, she didn’t care what U-haul corporate policy was or what the law was, she owned it and if I wanted the U-Haul I had to buy the insurance”

    “Upon arriving in Santiago, the desk agent flat out refused to honor the car insurance, refused to release the car until we bought the Budget insurance”

    These are not scams. These ones are breaches of contract. Whether this works nowadays I don’t know but one talk show host 10 years ago suggested calling the corporate headquarters saying, “If you don’t rent me the car(truck) I will go somewhere else and rent one and hold you civilly liable for the difference.

    By the way, regarding the agent saying your own insurance is invalid, you should verify that your own insurance is valid for rental cars before going on your trip. You don’t want to get into an accident and later find that your own insurance company says you are not covered.

  • Carver Clark Farrow II

    Then you do not understand the concept of scam.  A breach of contract is merely an inability or unwillingness to perform the contract. No moral or ethical precepts are necessarily involved.

    By contrast a scam occurs when key information is purposely withheld by one party to later extract greater concessions (read:money) from the other party than what is agreed upon in the contract.  This key information could be a lie of omission, (failing to disclose a mandatory charge), or a lie of commission (falsely asserting that the law requires insurance).

    In the case of U-Haul, her mandatory insurance rule was not presented to me at the time of booking otherwise I could have checked other places while there was still inventory.  I only learned of it when I went to pick up the U-Haul.  It was the last day of my lease, my friends had all arranged their schedules be free to help me move, so declining the rental was not possible. Getting a U-haul in Los Angeles, in August, on a Saturday, without notice, is impossible  I suspect most people who rent from U-Haul are in the same boat.

    Same with the Budget rental place.  Its a scam because the rep is lying to you knowing that under the circumstances it is highly unlikely that you have the means to dispute his/her lies while at the counter. 

    The talk show’s advice is silly.  That threat will barely register for two reasons.  1) Threats of legal action are referred to counsel for response, rarely the front desk and 2) To carry it out you would have to sue in small claims court and quite possibly return to the location and  you wouldn’t recover your travel expenses.  An unlikely scenario.

  • Dave Lieberman

    If I could beam one piece of car-rental wisdom into the head of every traveller, it’d be this: ask around at work.

    Seriously. More companies than you can imagine have car rental contracts with one or another of the big companies. The bigger the company you work for, the more likely it is they have one. Many times you can join the loyalty program (like Avis’s Preferred, Hertz’s #1 Club or National’s Emerald Club) and they will extend the insurance courtesies to you even when renting privately.

    Obviously, check with your work first to make sure this is acceptable—you don’t want to rent a car “for work” while you’re on vacation and stick the company with a repair bill—but you might be surprised… and then you can literally walk past the counter, throw your luggage in the car, and drive through the gate.

  • pauletteb

    I had a similar situation in Tampa. Even though I knew for sure that my platinum card covered the insurance on my rental, the desk clerk insisted that it didn’t and threatened dire consequences if I refused to buy their coverage. I not only refused but wrote my refusal on the contract, just in case the little worm tried to pull a fast one.

  • pauletteb

    You’re dead-on regarding the “tourist town” mentality.  I live near a major tourist destination in Connecticut, and the price-gouging that goes on is disgusting. And then there’s the “Mystic Mariott,” which isn’t in Mystic but next to an industrial park in another town.

  • robert

    The insurance is a scam. You can get a credit card with FREE primary rental coverage or make sure your regular policy doesnt cover rentals and then use a credit card that offers the insurance. Check the fine print if you are overseas as many dont cover certain countries etc. I saw a women bullied into full insurance last week in NY (Budget) It was 32.00 a day. Even if she wanted insurance, she could have the basic coverages for 15 a day. She was Canadian and they took advantage of her with contents insurance and all sorts of nonsense.

  • brianguy

    horse bleep.  I’ve been renting cars on average twice a year since before I was even 25.  the agent flat out lied to them to make a few extra bucks.  don’t get me wrong, in some instances, the insurance really IS worth it (though I’ve never once needed it, just did a mathematical assessment of the risk and decided I was beter off).  in most cases, not.

  • brianguy

    as long as people are still lying, sniveling jerks that work in teh travel industry then yes, Elliott will have job security.  and there are evidently still a LOT of people in the world who need him to request a refund on their behalf because they were scammed by a scummy car agent in a scummy shirt and tie.

  • jdey123

    Just back from holiday in Orlando, where I rented from Budget Car Rental. Got scammed on insurance optional extras. Their modus operandi was:-

    1. Keep me and my family waiting 15 minutes after a 10 hour flight

    2. Ask me verbally whether I wanted insurance optional extras. I decline verbally

    3. Clerk enters that I wanted 3 out of the 4 insurance optional extras in to webforms

    4. Clerk tells me that to speed up my journey, she’s entered the information for me and I simply need to click “Next” through a range of webpages and electronically sign

    On returning the car, I get a receipt telling me they’ve taken money from my card. Confused and don’t have rental agreement so don’t take up at airport. Get home and check rental agreement and see what they’ve done. Contacted Budget who told me they weren’t privy to conversation with Clerk, I’d signed agreement, so tough luck buddy.

    There is clear criminal deception going on here. The company has already been investigated by the Royal Canadian Mounted Police when their own employees whistleblowed that the company was scamming tourists.

  • jdey123

    Sadly, that isn’t true. I declined all of the insurance options, and the clerk entered it in to the system that I’d agreed. Most people work on trust and don’t expect to be scammed by a household name company. I got scammed by Budget at Orlando airport after a 10 hour flight from the UK after my family was made to wait for 15 minutes. This is a criminal operation. Perhaps you think ‘Wolf of Wall Street’ is ok too?

  • jdey123

    Thanks for this info. I’ve just raised a credit card dispute after being scammed for insurance optional extras in exactly the way that you’ve described. Sadly, I signed and realised that the clerk had added optional extras that I’d verbally declined afterwards.

  • jdey123

    They forced me. I declined the insurance optional extras verbally, and the clerk entered that I’d accepted them. Very few people would expect a clerk of a household name company to falsely enter information. This is deliberate fraud.