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Oversold Rental Insurance
FIGHT BACK! BY DAVID HOROWITZ
Oversold Rental Insurance
A good part of the price of renting a car is the added cost of collision damage waivers.
Rental-car companies say the additional insurance is necessary to protect renters from paying
the cost of repairs in the event of an accident. (Basic liability is covered by the rental company'
carrier.) Consumer groups say CDW is a rip-off that adds an average of 40 percent to the cost of
a rented car, often without providing any additional protection at all.
The problem is that most renters have no idea whether they need the added coverage or
not. In most cases, their own auto insurance policies cover rented vehicles. And if they charge
the car on a gold American Express, Visa or Mastercard, their deductible is covered as well. CDW
coverage simply duplicates the coverage they already have.
But according to groups like the U.S. Public Interest Group, rental agents don't explain th
to their customers. Instead, they press renters to pay $9 to $15 a day for the extra insurance. Inthe worst cases, USPIRG says agents ac- tually misrepresent the need for the coverage.
The rental companies deny those accusations. They say they are simply trying to protect
their customers from huge damage claims. They say their agents always make it clear that the
CDW is optional. Then, it's up to their customers to decide whether they need the extra
coverage.
Interestingly, Hertz does not push collision damage cov- erage, though it does offer it for hose whose own insurance doesn't cover rentals. Only about 16 percent of Hertz customers buy
the additional insurance. The company has also supported state laws to ban the sale of CDWs,
but so far, only New York and Illinois have actually passed such laws.
Why don't rental companies simply include the price of complete coverage in their basic
rates? Hertz tried that and found that its higher, all-inclusive rates were driving customers overto its competitors. So, unless the entire in- dustry makes the change at once (which is unlikely) orlaws are passed banning the sale of CDWs nationwide (as consumer groups want), rental-car
companies will go on advertising their lowest competitive rates and then tacking on additional
charges for the CDW.
That puts the decision right back in your hands when you rent a car. First, check your own uto-insurance policy and find out if it includes coverage for rental vehicles. Ask your agent if yu're not sure. If you carry a gold charge card, call the customer service number on your
monthly statement and find out exactly what additional coverage the company offers for charging
your rental on that card. You may find that between the two, you're already fully covered,
including the deductible. If you're not covered, then buy the CDW. ***
Avis is now making rental cars available with special adaptive devices for disabled drivers
Avis will install hand controls on a rental car at no additional cost, providing the customer
requests them at least eight hours in advance. That makes Avis the first car-rental company to
comply with the Americans With Disabilities Act regarding access to services for the
handicapped. The U.S. Justice Department is now negotiating similar agreements with rental
other agencies.
If you have any questions or comments, please write to David Horowitz in the Consumer
Forum+ (go FIGHTBACK). COPYRIGHT 1994 CREATORS SYNDICATE, INC.
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