Insurance "Watch Out"

[sum escape]

Like many others, we do not own a car and carry a "non owned" liability only auto policy. We use a credit card for rentals and the comprehensive / damage coverage is provided by the credit card.
So the watch out..... We recently encountered a deer strike and after submitting all the paperwork the credit card company required we did get reimbursement for damage. But they would not cover one element in the rental car company's claim. There was a "diminishment in value" line item in the damage claim they would not pay.
I'm not sure all personal policies would pay this either, but I am still pursuing the "why" for denial on this as there is nothing in the brochures that says this is an excluded item.
I am also challenging the rental car company to document why this is a legitimate part of a claim.
Would like to hear about others experiences here.

 

[JimTid]

Diminution of value statutes are different in every state. The amount is determined by a formula based on case law in the state where the incident occurred. Read your policy carefully to make sure you have coverage for diminished value as well as loss of use. In some states the rental car company can make a claim for loss of income while the car is being repaired.

 

[Drake]

We had exactly the same situation. Hit a deer and our insurance paid to fix the car, but not diminished value or loss of use. That’s one of the ways car rental companies can really take advantage of you. First, there isn’t really any diminished value unless there has been major damage. Used rental cars already carry a deep discount because of the way they have been driven. Loss of use is even worse. The rental company has no incentive to get the car repaired promptly since they’re charging you for it every day it sits waiting for repairs.

 

[Bay Pelican]

Several warning areas here that I have learned during 35 years of having employees of my law clients rent cars all over the world:

In a foreign rental you may be relying on credit card coverage, but if you take the rental car companies coverage you loose the credit card coverage. Also check to make sure the deductible on the rental car company's coverage 1,500 euro deductible is frequently seen especially in Ireland.

If you are renting for more than a few days in a foreign country and a planning on relying on your credit card, be prepared with a letter from the credit card company (freely given) that they grant coverage in that country. Typical scam is for the agent to announce that that card doesn't work here. Issue here is that the agent frequently gets a bigger commission from selling the insurance than renting the car.

If you are going to rent in Ireland make sure you have the letter and double book. At Dublin airport I have been refused cars a couple of times when cars were short and I refused to take insurance. The agent just rented my car to the next guy who would take insurance. An agent in Milan tried this on me this September and I had to call the local headquarters of the agency to get my car, wasted 90 minutes.

Crossing from the US into Mexico if you are a Mexican citizen the law 20 years ago prohibited you from driving a US rental car across the boarder. One employee of my client did so and the car was confiscated permanently. Don't know the law today.

 

[sum escape]

To be clear, the credit card paid the repair and loss of use but not the diminished value.

 

[bayview]

In FL my insurance company refused to pay diminished value on my personal car.
With carfax etc today diminished value is real.

 

[BandB]

I've seen many issues with coverage on rental cars. Diminished value claims is just one. Typically your personal insurance won't pay it on a car you own either. Another issue I've seen is if you refused the rental car company's damage waiver coverage and you're waiting for your insurer or the credit card company to pay, they'll charge you for each day the vehicle is out of their rental service. Of course they charge their maximum daily rate too.

 

[rjwilliams11741]

Thank goodness I have never had a situation when damage to a rental car has been more than incidental and didn't get involved in a loss of use situation. I wonder if anyone has ever filed suit against a car rental company based on the fact that a rental company's fleet is probably not 100% "in use" every day and that the loss of use charges should be based on that percentage rather than every day the car is "down".

Regards one poster's comment regarding a Mexican Citizen driving a US plated rental car in Mexico is in violation of Mexican law, that is still true. Mexican Citizens and people holding status as Mexican Permanent Residents cannot drive a foreign plated vehicle unless the owner of that car is with them in the car.

 

[BandB]

Thank goodness I have never had a situation when damage to a rental car has been more than incidental and didn't get involved in a loss of use situation. I wonder if anyone has ever filed suit against a car rental company based on the fact that a rental company's fleet is probably not 100% "in use" every day and that the loss of use charges should be based on that percentage rather than every day the car is "down".

Regards one poster's comment regarding a Mexican Citizen driving a US plated rental car in Mexico is in violation of Mexican law, that is still true. Mexican Citizens and people holding status as Mexican Permanent Residents cannot drive a foreign plated vehicle unless the owner of that car is with them in the car.

One would still have to pay the rental car company and then seek to recover and likely not worth it. But until you pay, they keep the clock running.

One thing all this points out to me is to have a very good insurance agent or advisor and cover everything you'll be doing with them. Many of us here live uncommon lives and are subject to issues most people don't have.

I'm sure some day I will, but to this point, I've never rented a car in a foreign country. I've chosen to use taxis, limos, drivers, anything to avoid doing so.

 

[sum escape]

The rest of the story....

To be clear, the credit card paid the repair and loss of use but not the diminished value.

So now that I have been in contact with the executive offices of Citicard and Virginia Surety (their insurer) I will fill in "the rest of the story". They like other credit card companies carry insurance for the rental car damage coverage. Both Virginia Surety and Citicard had the same story....they don't pay diminished value claims.
Personally I believe diminished value is a valid claim in today's Carfax world. They paid loss of use and an administrative fee charged by the rental car company. Seems inconsistent to not pay diminished value.
No where does it say this is not covered except for a disclaimer that "all costs may not be covered". I suggested to them that they are not very clear on their consumer disclosures...and that I would share my experience. Thus, the purpose of this post. Buyer beware.....

 

[BandB]

I've heard the car company use this as an argument that you should buy their insurance. I've seen people billed for loss of service of the car too.

 

[BruceK]

"Diminished Value" is an odd term, doing the best based on posts I gather it means compensation for loss of use of the car for rental purposes during the repair time. Called "demurrage" over here. An entirely proper claim in itself, seems the problem is lack of cover from some insurers. Always a good idea to know what cover you have. I never trust included "free" credit card cover, it doesn`t have a great reputation here.

 

[BandB]

"Diminished Value" is an odd term, doing the best based on posts I gather it means compensation for loss of use of the car for rental purposes during the repair time. Called "demurrage" over here. An entirely proper claim in itself, seems the problem is lack of cover from some insurers. Always a good idea to know what cover you have. I never trust included "free" credit card cover, it doesn`t have a great reputation here.

No, they also charge for the loss of value of the car, it's diminished value. This is the difference between the value of the car before the wreck and it's value with a wreck now showing on it's history. I remember the argument with insurance companies decades ago when an almost new car was in a wreck that it didn't matter how it was repaired it was still worth less money. Now that the wreck history is so easily available, that's even more true.

 

[BruceK]

Thanks B&B, it`s what I originally thought, but the discussion took me elsewhere. Must be a fertile area for argument, rental cars are usually devalued because they are "rental cars", treated badly by their many users. Except me, I treat them like my own car, it pays off in no losses, usually. I`d say there is an element of double dip, they charge you/your insurer for the repair, and then for reduced value, which the repair was supposed to reinstate. Never heard of it here, nor encountered or even read of it, in Europe. Came close to a high speed head on in Canada,had we collided the rental car would have been a write off, us too. Diminished value would have been a minor inconvenience. Saved by my advanced driver training, rally experience, and a very alert following driver.

 

[Cigatoo]

A few years back we had a rental car while on vacation in Florida. I went to the local library to do some work while using their internet. While I was working a fellow approached me and asked if I owned “this” car. Sure enough it was my rental that he had backed into. I called my insurance company, Amica, and gave them the mans information. The women at Amica told me to enjoy my vacation and handled everything. And I mean everything from calling the rental car agency (Enterprise) to seeing the repairs through. Absolutely no effort required by me after the initial call. I have had another much more serious homeowners claim and experienced the same level of customer service.
I have always (35 years) had all my insurance with Amica and would never consider a change. And yes I am plugging Amica because they afford me a piece of mind which is exactly why I buy insurance.

 

[psneeld]

Easting..... did you own a car at the time?

Or just have a "non owners" policy that is really the topic with the issue?

A regular car policy may or may not pay for everything, but is more likely than the "non owner" liability type from input I have read/heard.

 

[danderer]

I have always (35 years) had all my insurance with Amica and would never consider a change. And yes I am plugging Amica because they afford me a piece of mind which is exactly why I buy insurance.

While I'm not a customer of theirs, I know folks in the industry who STRONGLY recommend Amica based on their quality of service.

 

[sum escape]

Recap of this Thread

A recap may be in order given all the comments.

I used the credit card coverage for damage to a rental car caused by a deer strike.
Citicard (Virginia Surety, their insurer) paid:
-Collison repair
-Loss of 4 days rental
-Administrative charge

Did not pay:
-Diminished value (car worth less after accident repair...Carfax)

The only issue I have is that this was never disclosed as "not covered" in any of their brochures or other materials explaining the rental car damage coverage included with their card. Buyer beware....

 

[Cigatoo]

Easting..... did you own a car at the time?

Or just have a "non owners" policy that is really the topic with the issue?

A regular car policy may or may not pay for everything, but is more likely than the "non owner" liability type from input I have read/heard.

Yes we own and insure 2 cars so I am probably off topic. However we deal with so many companies in this world that provide little / to no / to horrible customer service when I find a company that consistently “over performs” (And it’s an INSURANCE COMPANY) I try to pay them gratitude.

Sorry for this and my previous rant.

 

[Rossland]

Last year in Florida, our parked car was hit by a truck. The insurance company paid for the repairs, but refused to pay for diminished value. I consulted a lawyer who said I would have to sue the truck driver, but he was an illegal Mexican immigrant and has now disappeared. He was given two tickets, careless driving, and no drivers license. I don't know if he paid either.

So I will never be able to collect.

Florida has legislation that allows for diminished value compensation, but insurance companies are refusing to pay. At the time of the accident, our car was less than one year old, so diminished value is significant, but reduces as the car ages, and by the time the car is ten years old, diminished value will be reduced to near zero.

 

[Cigatoo]

“A regular car policy may or may not pay for everything, but is more likely than the "non owner" liability type from input I have read/heard.”

The best part is I do not know what they did or did not pay for. They just handled it. Which is what I pay for.

 

[Shrew]

Part of the problem here is we are discussing and comparing apples and oranges.

1) Rental car hits deer. This puts liability on the driver. Insurance claim submitted to credit card

2) Rental car is hit by other driver. This puts liability on the other driver. Insurance claim submitted to insurance company. It's unclear whether 'diminished value' was assessed in claim.

 

[FoxtrotCharlie]

About 15 yrs ago when my daughter was a senior in high school we got her a new Honda CRV. Less than 6 months later a lady ran a stop sigh and hit her car on the passenger side. Lady had insurance (State Farm I think) that paid for the repairs. Afterwards I knew the car was worth less having been in an accident (pre Car-Fax days), but did not know the term 'diminished value'. After several calls up the ladder at the lady's insurance company someone said 'oh, you're talking about diminished value!'. You would have thought I was calling in a bomb threat! I had come up with a value after talking to several auto dealers, and I presented this to the insurance company - they were demanding that I sign a non-disclosure agreement - I refused and suggested that my attorney should step in - they were terrified about diminished value becoming commonly known. They paid up, and I did not sign the NDA.

 

[sunchaser]

"Diminished Value" is an odd term, doing the best based on posts I gather it means compensation for loss of use of the car for rental purposes during the repair time. Called "demurrage" over here. An entirely proper claim in itself, seems the problem is lack of cover from some insurers. Always a good idea to know what cover you have. I never trust included "free" credit card cover, it doesn`t have a great reputation here.

In contract work the term "consequential damages" applies. I've been involved with negotiation and application of this contract wording worldwide.

 

[sum escape]

A recap may be in order given all the comments.

I used the credit card coverage for damage to a rental car caused by a deer strike.
Citicard (Virginia Surety, their insurer) paid:
-Collison repair
-Loss of 4 days rental
-Administrative charge

Did not pay:
-Diminished value (car worth less after accident repair...Carfax)

The only issue I have is that this was never disclosed as "not covered" in any of their brochures or other materials explaining the rental car damage coverage included with their card. Buyer beware....

Addendum:
We only have a non owned liability policy which provides no damage (comprehensive) coverage.

 

[psneeld]

“A regular car policy may or may not pay for everything, but is more likely than the "non owner" liability type from input I have read/heard.”

The best part is I do not know what they did or did not pay for. They just handled it. Which is what I pay for.

But what you pay for is more important than pushing an insurance company that may do no more than any other.

Just making sure TFers get pertinent info over just brand loyalty.

So hardly the best part unless qualified.

 

[BandB]

This does all emphasize one thing. Have an insurance broker you trust and who knows everything you do during the course of the year and all your travels. Then tell him you want to be completely covered for it all. Let him know your credit cards. Tell him to figure out whether you should accept or decline rental company coverage and how to be completely covered if you decline. Build a relationship and expect and require more than just an insurance salesman.

I recall growing up that anything that ever happened we just called the agent and he handled everything from there. My father backed into someone's prized T-Bird (the guy turned off his lights before he parked behind us). The guy was so distraught. 9:00 AM the next morning he called my father apologizing and saying our agent had already spoken with him and made arrangements for the repair. I have a front end loader being used for snow removal to hit my car in the school parking lot. You could tell that's what it was by the height at which it was hit. One call, all set. Someone is going to earn a commission. Make sure it's someone who merits it. Even with companies like State Farm, a huge difference in agents, so why not choose the one who serves you best. There was a very large agency in our area but the owner still made a personal call anytime anything happened. He'd call to make sure the person was being helped properly and then call again after the repair to make sure all was ok. He also gave every client his cell phone number.

 

[ctjstr]

just remember, once you make a claim, the whole process changes to more or less an adversarial one. You're not dealing with that great agent you used for years. You're dealing with an adjuster. Completely different ball game. Thats not to day that having a good agent can't be of help in a pinch, but they don't write the checks.

there is also a bit of term confusion on this thread. "Loss of use" is different from "diminished value" The first compensates you on a per diem basis for the time you're item is being repaired. The latter is the difference between owning a nice shiny newish car with no accidents, and owning something that has been repaired. With carfax a fact of life, that difference can be large..in the several thousand dollars range for a newer car.
Likewise "fair market value" is different than "replacement cost" (think craigs list used price v. new in the store price.

POint is, if you have any sort of claim, unless its a bone stupid simple one, at least give a call to a lawyer before you accept a settlement. You don't have to hire him/her, but at least find out if there is something missing. The insurance carrier is certainly not going to remind you about extra money you have coming, with rare exceptions.