The options offered by rental car companies, along with personal insurance policies, travel insurance provisions, and credit card coverage can bewilder travelers.(Photo: Getty Images/iStockphoto)
Question: In September, I rented a car through Sixt at the Brussels airport. The clerk insisted that we purchase insurance even though my Capital One Visa Signature credit card provided it, saying that I needed to buy coverage through Sixt because there are frequently problems with insurance through U.S. credit card companies. Reluctantly, I agreed to take collision/damage insurance at 90 euro for the week. I was never advised of any obligations, or additional charges that would or could be assessed.
As I was returning the car at the airport a week later, I scraped a guard rail and scratched the bumper. Sixt documented the damage. About a week later, I received a final invoice from Sixt which noted the purchased insurance and total, and I considered the matter closed.
Two months later, Sixt charged my card 600 euros (about $810) and sent a letter indicating that it was charging me for damage to the rental car. I disputed the charge with Capital One and supplied documentation that I bought the collision/damage insurance. The credit card company advised that Sixt would have 45 days to respond. I was later told that Sixt never responded to my dispute so the case was closed, and the 600 euro charge was reversed.
In February, I received a notice from a German collection agency, demanding payment of 753 euros owed to Sixt — 600 plus 153 euros in additional fees and penalties. I responded via e-mail and advised that we purchased insurance, so we should not be charged anything.
The receipt I received in Brussels indicates a 600 euro loss/damage waiver; however, since I purchased collision/damage insurance that charge does not apply. A waiver only applies if the insurance is not accepted. Further, if I had been advised at the rental counter that an additional 600 euro would be assessed regardless of whether I bought insurance, I would not have bought it and used insurance covered under my credit card. Moreover, because I purchased insurance through Sixt, it negated any coverage that would have otherwise been available through my credit card.
I have now received another notice from the German collection agency threatening a lawsuit if I do not pay the 753 euros. Sixt intimidated me into buying additional insurance and then misled me by not providing any information regarding my rights and obligations at the time I rented the car. I would like this charge and all fees and penalties to be removed. Can you assist me?
—Curtis Williams, Ventnor, N.J.
Answer: Williams faced a hard sell for Sixt's coverage at the rental car counter, the worst possible place to make decisions about insurance options. He tried to avoid that by doing his research ahead of time about his credit card coverage. But the clerk's high-pressure sales tactics pushed him into buying coverage that he didn't understand—and didn't need.
He's not alone. The alphabet soup of options offered by rental car companies, along with personal insurance policies, travel insurance provisions, and credit card coverage can bewilder travelers. Some 42% pronounced themselves "thoroughly confused" about insurance coverage when renting a car, according to a survey by the National Association of Insurance Commissioners (NAIC).
After the clash with the agent over Williams' credit card coverage, Sixt sold him collision coverage with loss damage waiver (LDW, sometimes also called collision damage waiver or CDW). Rental car companies are quick to point out that LDW is not insurance; it's a waiver that releases you from financial liability if you damage the car. But most renters, including Williams, routinely refer to it as insurance. Williams didn't understand that the LDW noted on his receipt was in fact his coverage, and incorrectly believed that a fee waiver applied only if Sixt's coverage had been declined. It didn't help that the coverage was referred to by three different terms on his dual-language receipt.
Sixt generally advises customers to purchase LDW, according to representative Florian Weiss. When customers say their credit cards have coverage, Sixt staff generally doesn't advise them to buy it, Weiss says.
"The exception to this is if a customer says that the deductible their credit card offers is very high," says Weiss. "But it should be noted that staff at car rental stations cannot tell whether and to what extent a credit card offers comprehensive cover; they rely on customers telling them."
The LDW Williams purchased came with a 600 euro excess, which was noted on his paperwork. Excess is a British term that's equivalent to deductible, and not nomenclature Williams was familiar with. Apparently Williams wasn't aware the coverage he bought came with a deductible of any amount, and says the Sixt agent didn't explain it. Sixt offers various deductible levels, from zero to 1,000 euro, says Weiss.
"As a rule, Sixt staff tell their customers every time they rent that they can opt to reduce their deductible to zero in return for an extra fee," says Weiss. "It seems that Mr. Williams did not choose to do that."
Williams never contested that he damaged the car. He just thought the LDW Sixt sold him would take care of the entire bill. The total damage to the car cost 679 euros, according to Weiss, so the initial 600 euro Sixt charged to Williams' card was correct.
Prior to departure, Williams had checked his coverage with his Capital One Visa Signature card. Credit card coverage often has restrictions on types of cars, location, and rental length; Williams was good to go on all counts. His rental was covered as long as he charged the entire rental on his card and declined the rental car company's CDW/LDW.
Not only was Williams pushed into spending 90 euros on LDW that he didn't need, that LDW did indeed invalidate his coverage through his Capital One Signature Visa card, just as he feared.
He might have been able to avoid the clash with the clerk over insurance if he'd obtained a "letter of eligibility" from Visa, either in advance or by calling Visa from the rental car desk, according to Visa representative Andrew Gerlt. Visa's rental car insurance benefit administrator is available 24 hours a day, 365 days a year at (800) 847-2911.
"This typically serves as reassurance to the rental agency (most often internationally) that there is some level of coverage for the automobile rental therefore they have recourse in the event of an incident and will not then force a consumer to accept and pay for the coverage they offer," says Gerlt.
After Williams disputed the charge with Capital One, Sixt was left with no way to collect its legitimate 600 euro fee. Sixt indicates it did respond to the chargeback inquiry, so it's unclear why Capital One closed the file in Williams' favor.
"That is why the company had to appoint a collection agency, which is the standard way of proceeding in the industry," says Weiss.
After I contacted Sixt, it agreed to call off its collection agency and remove the original charge as well as all penalties, even though the company behaved "correctly and transparently," says Weiss.
"The company considers its customers its most important assets, and does of course want them to choose Sixt next time they rent," says Weiss. "Sixt therefore treats customer satisfaction as its foremost priority."
How can you avoid trouble?
• Learn the details and limits of your credit card coverage ahead of time. Benefits vary tremendously according to card type and issuing bank, and is usually laden with restrictions over rental location, duration, car types and more. Visa won't cover rentals in Jamaica, for example, or cars considered exotic or expensive, or international rentals lasting more than 31 days.
• Find out what other insurance you have and what you need; duplicating coverage is a waste of money but at the same time, you don't want to be liable for the full value of a car. The NAIC's consumer website has tips on what questions to ask.
• Bring documentation to the car rental counter. Whether you're relying on credit card coverage, your personal auto policy or travel insurance, take a copy of paperwork proving you're covered with you to avoid a fight with the rental agent.
• If the rental agent won't accept coverage you're sure is valid, call your credit card company before buying CDW/LDW to make sure you won't lose your benefits.
• If you buy coverage through a rental car company, take the time to read through what you're buying and ask questions. Better to wait a few more minutes than have your vacation—and budget—ruined over a damaged car.
Do you have a travel consumer issue you'd like Traveler's Aide to pursue? E-mail Linda Burbank at usattravelersaide@gmail.com. Your question may be used in a future column.
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