What is the most recent car rental damage insurance trap?
The situation unfolds something like this:
A company employee rents a vehicle for a business trip. They use the vehicle for any number of days. They then drop the rental vehicle off and are told by an employee there that no walk-through is needed, and they are good to go. Then, a month or so later, they receive a letter from the third party claims administrator (TPA) for the rental company that the rental vehicle was damaged while under the care of the employee, and the employee must pay for the repairs.
These claims are sketchy at best (click HERE for numerous BBB complaints alleging the same scenario with the exact TPA we have seen involved). The TPA can often not prove that our insured employees are responsible for the alleged damage, and most carriers are denying the claims outright. However, as we all know, anyone who rents a vehicle must provide their driver’s license and credit card. And if that employee uses a personal credit card to rent the vehicle, the employee; not the company they work for may be held personally responsible for the damages to a vehicle they rented for a business trip.
The TPA has even gone so far as to send letters to an employee at home demanding payment, even after the carrier has denied the claim due to lack of evidence of wrongdoing. This is obviously a nuisance at best, and major issue at worst, if the individual employee does not respond to these demands for payment.
So what can you do?
First of all, make sure all employees that rent vehicles (both regularly and on rare occasions) are aware of this type of claim. These claims aren’t likely to stop anytime soon, so it is best for everyone to follow a simple protective risk management strategy to avoid these situations.
All employees that rent vehicles should take a full video of the vehicle – body, wheels, interior, and mirrors – upon pickup AND upon drop off of the vehicle. This should be done, even if a car rental employee is also doing a damage inspection. If any nicks/dents/scratches are observed upon first renting the vehicle, detailed photos should be taken, and the time/date noted. Secondarily, purchasing full collision coverage from the rental agency could also eliminate this situation, however, this is a much more expensive solution.
While these extra steps may be inconvenient, these extra few minutes will go a long way to eliminating a potential time-consuming situation. Videos and photos are invaluable in the claims process.