I thought car rental insurance was optional

Question: For nearly a month now, I’ve been fighting to recover more than $280 from Hertz in connection with a reservation for a Mexican rental I made through Hotwire.

I reserved a Hertz car for a week in Mexico for an estimated $113 — a flat $90 for the rental of the car, and an estimated $23 in taxes and fees. I did not pay Hotwire at the time of the reservation and understood that I would pay Hertz directly when I rented the car.

At the Hertz desk in Mexico, I was presented with an entirely different set of charges. There, I heard for the first time about the mandatory Mexican liability insurance. I did not have the option of declining the insurance, which amounted to approximately $110 for the week.

But that wasn’t the only surprising charge. The price of the car had mysteriously risen to around $108, and I was assessed a “service charge” of approximately $135. No one at Hertz or Hotwire has yet been able to tell me what that’s about. Together with two smaller fees of about $44, my total bill came to $397.

The day after I returned from Mexico, I contacted both Hotwire and Hertz. Although their stories have varied slightly over the weeks, each company tells me that I should go talk to the other. Hotwire says it has no control over what Hertz bills me, and Hertz says it has no control over what Hotwire quotes me.

Given the enormous discrepancy in price and the hours I’ve spent trying to get this matter resolved, I am seeking a refund of the full $283 difference between the $113 reservation price and $397 charge. Hertz has my money, but Hotwire made the representations that led me to the Hertz desk in Mexico. Can you help me get my refund? — Brian Perez-Daple, Arlington, Va.

Answer: You should have been charged the rate you were quoted. When you weren’t, Hotwire should have asked Hertz to refund the money on your behalf.

I checked with both Hotwire and Hertz, but could find nothing that specifically addresses your situation. (Hertz has a lengthy page with disclaimers about its protection plans that came the closest.)

Did someone in Mexico pull a fast one on your rental? Possibly. After you returned, a Hertz representative in the States told you that insurance wasn’t required on your rental. If a Hertz employee in Mexico told you otherwise — and insisted you buy insurance before allowing you to leave — then you can be forgiven for thinking your car rental company was trying to separate you from your pesos.

One of the best ways of preventing an insurance misunderstanding is to do a little homework before your trip. Contact your car rental company and get your insurance requirements in writing. Make a printout of your credit-card coverage and car insurance coverage, too.

If an agent demands that you buy “optional” insurance, take a step back from the counter and call the car rental company’s reservations line. Explain the situation, and ask for a resolution. It is in the car rental company’s best interests to fix the problem right then and there, and I’ve seen companies rise to the occasion time and again, when called.

If you’ve already taken the insurance, stay off the phone. Instead, contact your travel agent or car rental company by email. Having a paper trail (or in this case, a data trail) ensures your grievance will be addressed quickly and taken as seriously as possible.

I contacted Hotwire on your behalf. A Hertz representative contacted you and agreed to credit you the difference between the amount charged to your credit card and the amount quoted to you by Hotwire.

  • sweepergrl

    Good job Chris. I do have a question, though. You said that he should have called the reservation center instead of being blackmailed into agreeing to the charges. I haven’t traveled extensively in Mexico, so I’m not sure how it would work. Should he have used his cell to try and call? Would his cell even work in most places in Mexico? Should he have insisted on using their land line, even when it (I suspect) would be a call back to the US and, therefore, expensive?

  • Raven

    Don’t go to Mexico. PERIOD.
    Between the drug cartels, the corrupt government, and the scams like this…just…why do people still consider that cesspool a vacation spot???

  • SirWired

    @Raven: Mexico is a big country; most of it is quite pleasant and wonderful to visit. But yes, there are some parts of it that you probably don’t want to travel to…

    Would you want a visitor to the U.S. to judge an entire country because of the worst parts of LA, NYC, and Chicago? You are rather unlikely to meet anybody connected with a drug cartel in Cancun, nor are you likely to encounter government corruption of any kind. And as any reader of Chris’s column knows, travel scams are by no means confined to foreign countries; there are plenty right here at home.

  • MrsKruse

    I was under the impression that you were required to show proof of insurance that was valid in Mexico. Most American car insurance won’t cover you there. I remember our travel agent mentioning it to us when we booked a car for our last trip. Hence the forced insurance at the car rental counter if you can’t show something contrary (our agent told us that we’d have to have a letter from our insurance agent and a copy of our insurance policy showing specifically that Mexico was covered).

  • Chris in NC

    Here’s my understanding of the matter…

    There are 2 major types of insurances that are offered on a car rental: CDW and LDW.

    CDW covers collision and loss of use. ie, you ran into a barrier. It does not cover liability. ie, you were involved in an accident and someone was injured.

    LDW covers liability only. In US rentals, liability is provided by your personal automobile policy. If you don’t own an auto, I don’t know what happens…

    In Mexico, 3rd party liability is required by law. US automobile policies are often not valid in Mexico. Some rates in Mexico INCLUDE liability in the rates, some don’t. It should and is usually well disclosed when booking.

    CDW is usually the hard sell, because it is pricier, and it is NEVER required.
    LDW is not required in the US, but is required in Mexico.

    Here are the issues regarding the case
    1) Does Hotwire have enough disclosure on its site? Either the rate should include 3rd party liability, or it needs to be disclosed as to how much it will add to the date. There isn’t enough information to know if this is done.

    2) Was this a guaranteed rate? or simply a hold. Again, not enough information in the article.

    3) If it was a guaranteed rate, then why did the rate increase to $108 and an additional “service” fee get added? That is suspicious

    So, did Hertz try and pull a fast one? Probably not on the liability insurance (because there is no evidence that it was included in the rental rate). The other charges, likely.

    Chris (Elliott), the advice to call the corporate number is good, but often in a foreign country it is difficult. Furthermore, I have had experiences where the corporation hides behind the fact that it is a franchise and “we can’t control our franchises.” So, while your advice is good, it may or may not be reasonable for the average tourist.

  • Mike S

    Always buy full coverage insurance in Mexico. Most US insurance not good there. If you get into an accident without insurance and can not pay the damages plus a fee, you may have issues trying to leave the country. If you try to rely on your credit card for coverage, be sure it is applicable. Beware of permitted overcharges that may not be covered.

    That said, misleading quotes (those that leave out insurance) are wrong. Rentals are cheap in Mexico and even with insurance added are not bad. However, in making a decision one is entitled to full cost information up front.

    Congrats to Chris on the result in this case. However, don’t expect a similar result if you have this issue. Always ask whether insurance is included.

  • Mel

    @ Raven: Wow… just…wow.

  • BucksterSF

    They know you’re traveling internationally, you need a car, and you’re probably not going to turn around and leave. When you’re in that situation never use a company like hotwire but rather book directly through the company’s web site. if you have a reservation through the rental company its almost impossible to argue you were given the wrong price, even at the counter.

  • BucksterSF

    And shame on Hotwire. This should have been their problem to resolve. They should stand behind their quotes, because that’s the only thing they’re selling. They should have made up the difference and argued with Hertz.

    The fact that they just threw up their hands and told the OP “You need to deal with it” should be a clear warning on how you will be treated in a dispute.

  • Steve

    @BucksterSF: “The fact that they just threw up their hands and told the OP “You need to deal with it” should be a clear warning on how you will be treated in a dispute.” I agree. It’s cases like these that make me very unlikely to ever use a third-party service like Hotwire. It’s shameful for the company that quoted you the price and essentially sold you the rental to throw up their hands and say “well, we can’t do anything about it.” What good are they, then?

    Anyway, the insurance issue is confusing, but what clearly screams of scam – either on the part of Hertz or Hotwire, I don’t know – is the price increase and the mysterious “service charge” (that was more than the cost of the rental).

  • Brian C

    @Raven November 12, 2010 at 8:20 am
    “Don’t go to Mexico. PERIOD.
    Between the drug cartels, the corrupt government, and the scams like this…just…why do people still consider that cesspool a vacation spot???”

    Don’t go to America, there are drugs and crime and corrupt officials and why would you want to visit such a horrible place?

    Oh wait….see what happens when you over-generalize????

  • http://nmdfreelance.com Nancy

    SirWired – while I can understand your stance, unfortunately, Mexico is becoming more and more the “cesspool” the prior poster called it.

    The corruption in Mexico is becoming more widespread that not even the all-inclusive resorts are safe. The drug cartels have very deep pockets and pay a lot of people a lot of money to “separate us from our pesos” and, in some cases, our lives.

    There are a number of places Americans used to frequent, such as Rocky Point, that they will no longer go to due to the targets on our backs the moment we go across the border.

    In addition, it’s as the police chief of Nogales said in a recent interview: (and I am paraphrasing) it’s not safe for a number of reasons but the bottom line is, even if the shoot out is directed at someone else, what if you’re sitting next to that “someone else”.

    It’s just not safe and I don’t see it becoming so for a long, long time.

  • Raven

    A friend of mine’s daughter was doing an exchange student program in Mexico, in a “good” part of Mexico, mind you. The girl was in a horrible accident–she was hit by a drunk driver as she walked across the street–and required hospitalization. My friend flew down there to retrieve her daughter and bring her back to the States. At the hospital, my friend was EXTORTED by the doctor, nurses, orderlies…anyone who had served her daughter was suddenly charging “fees” that did not appear on the bill. My friend, who is fluent in Spanish, tried to explain she had already PAID the bill–in cash, as most of Mexico operates–but no, she could not get her daughter until these other palms were greased. She called the cops and they were useless. She ended up paying more than $5000 OVER the cost of the hospital bill just to get her daughter out of that “good” hospital in that “good” area because of some greedy, low-life people!!!!

    So, yes, I do have a very negative view of Mexico, even the “good” areas. Feel free to travel there. Be careful of the bullets, and be sure to have extra cash on hand. You’ll need it at the hospital, because the bill isn’t where the buck stops!!!

    Oh, and the cops found the drunk who hit the daughter but he was “connected” and was not arrested.

    Also: I live near the border. There’s more violence than the mainstream media reports. A border college was shot up by cartel members two months ago. A border college on OUR SIDE. Bet you didn’t see that in the papers. Two kids were killed, too.

  • Dennis

    Same thing happened to me in Costa Rica. The rental agent at the counter insisted that additional insurance was mandatory and had already checked the box when he handed me the paperwork to sign. Ingenuously, I believed him. Upon return, when I discovered that there was an extra charge for this insurance (that was really NOT mandatory), I tried to fight it, but since they had the paperwork, no one believed me.

  • Brian C

    @Raven

    Yes raven nothing like that could EVER happen here….

    I know someone who hired movers to move their personal belongings from one city to the other. They were quoted one price and when they were delivered they demanded twice as much. They were holding their stuff hostage until the amount was paid. My friend tried to call the cops but they refused to get involved because this was a civil matter.

    So, you should NEVER hire movers…everyone in the US is a complete crook and can’t be trusted.

    Wanna keep going? Like I said, see what happens when we overgeneralize??

  • Jesse

    Car rentals in Mexico if you rent in Mexico are far more expensive. Once I requested a quote at one airport and it was about $100USD per day.

    The rate may have included the insurance, however, if it the insurance is in fact required by Mexican Authorities, why does Expedia not include it from the get go?

    @ Raven: seriously?

  • Raven

    @Brian:
    Your friends had the option of small claims court to resolve that issue. What recourse does a US citizen have with a corrupt Mexican hospital?

  • Steven Fleming

    Why in the world — except for a required business trip — would ANYBODY travel to Mexico now? And certainly I would NOT rent a car, there. From anybody. Anytime.

    Glad this guy got his credit but given all that is going on in Mexico right now I would stay away, period. Even the resort cities like Cancun are dangerous places to be.

  • barbie45

    Raven, I agree with you one hundred percent. Personally I might feel safer in Iraq or the West Zone.

  • Mark K

    First, some clarification on the insurance terms “Chris in NC” posted.

    LDW from a car rental company is NOT liability insurance. It is Loss Damage Waiver. This removes you from liability for damage to the rental car only. It does not cover your liability for injury or property damage you may cause. If you want actual liability insurance from a car rental company, this is sold as LIS (Liability Insurance Supplement). This is an important distinction. Since most of us who rent cars in the US have our own cars and therefore auto insurance, we have liability coverage that takes care of this on US rentals.

    As others have mentioned, there are no US issued auto insurance policies that cover you in Mexico. You have to get that coverage as an option on your policy. And it is costly. So, I don’t blame any Mexican auto rental company from wanting you to purchase coverage. You could have an accident and not realize your own auto insurance won’t cover it and get stuck owing a lot of money you may not be able to pay. But, I think that when renting through a web site the rental terms should not call the insurance “optional” when it really isn’t.

  • BucksterSF

    As much as it is politically incorrect to say so, Mexico in 2010 is a dangerous place. You can make some generalizations in life. Corruption is rampant so if you don’t have cash for bribes you simply don’t get out of some situations. There is no path for relief or complaint, and in some cases complaining gets you in deeper. When the police and legal system are not the arbiters it’s not quite lawlessness but more like someone else’s law and if you don’t like it, well, too bad.

  • Carly

    If you are a consumer who is exploited in Mexico, PROFECO can help. Their website has recently been redesigned and my old link to the specific page isn’t working, but there is a department in PROFECO that works to protect foreign consumers in Mexico. My landlord stalled on returning my damage deposit for MONTHS, but when I dropped the word PROFECO she had the money back to me in less than forty-eight hours.

    http://www.profeco.gob.mx/english.htm

  • http://roomswithgreatviews.com Gearheart

    Raven says “Don’t go to Mexico. PERIOD.” and calls it a cesspool. Are you kidding? She obviously hasn’t been to Mexico – it’s a wonderful country. Have you seen the crime statistics for the U.S.? Would you stay away from DC because of the murder rate? Well, except for the border region, Mexico’s is lower. We’ve been to Mexico often, and plan to go again. We feel as safe there as we do at home.

  • Becca

    This is a really common problem with Mexican car rentals. They always want to add the “required” liability insurance. You are required by Mexican law to carry this, but for the most part if your credit card has rental car liability protection, it covers this Mexican legal requirement. (Note if you do get in a wreck, the police might require you to pay for the liability in cash or they will take you to jail, be prepared for this. You can claim the money back from your credit card after the fact.) We have had only half success trying to make this argument to rental car companies in Mexico – even with a copy of the terms of our credit card. What we do now is just reserve a rental car at 4-5 different places, if one insists on us buying the liability insurance, we just walk out and go to the next place. This works great because most rental car reservations (even through hotwire) do not require you to pay in advance ..

  • Peter Verstage

    I had a similar experience in Montevideo Airport, Uruguay. The Hertz sales agent insisted that I take out the CDW insurance and would not rent me the car at the price I had been quoted. Nor would he sign a statement that this insurance was obligatory. I refused to pay the extra and went to the Avis desk where I rented a car at a higher rate. I emailed Hertz on my return and they refunded the full difference between what Avis charged me and my Hertz quote.
    The problem arises at the rental stations that are franchise operators and not corporate ones. The CDW insurance is always ridiculously expensive and the commission paid to the sales agent is correspondingly very high.
    Since most digital cameras have a video facility I suggest filming the agent and asking him to repeat to you that the insurance is compulsory. You then have proof to offer to the rental company’s head office.

  • Gary

    Just FYI if you drive in Mexico you are required by Mexican law to have insure from a carrier that has a physical presence in Mexico. It’s a felony not to do so.

  • jack

    I reserved a nine day car rental from Thrifty at San Jose del Cabo only to have that office refuse to rent the car unless I paid for additional PLI (personal liability insurance) of $190. This was more than the rental of $163 including all fees and taxes. I argued with the representative, to no avail, that PLI is required by Mexican law to be included in the rate quote. I called Thrifty from my cell phone and was told, after five minutes on hold, that each rental location has discretion to charge (or not) for PLI. I really had no choice as I needed the car to travel to my final destination so I rented it with Pli. I plan to dispute the PLI charges with VISA as soon as I see the charges. If anyone has experience with a similar situation please post here for all to see and use for precedence. I’ll update this dispute as well. Thanks!

  • http://www.facebook.com/edea.krammer.3 Edea Krammer

    In this world of uncertainties I believe insurance is a vital basic living requirement… Nothing more!
    HomeHealthIns.com