Rental Car Small Accident Situation - what Can I Do?

[seeeker]

Seeking advice on what to do in this particular situation.

I live in Colorado. June 2016, vacation in St. Thomas USVI, rented an economy 2015 Toyota Yaris. Declined the LDW from the rental agency because I have car rental insurance through my personal auto insurance, and through the credit card.

The roads in St. Thomas are atrocious. Excessive potholes, rocks, dirt roads, steep hills, steep switchbacks. Anyone can have a minor "accident" even while exercising caution. I know this now in hindsight.

Late at night, first night, unfamiliar with the terrain, on a dirt driveway, I scrape a rock on the bottom right fender between wheelhouse and passenger door.

The rental company is sticking me with a $1700 bill.

From a local body shop, based on photos of the damage, I got an estimate of $1350. The rental agency in St. Thomas has mentioned something about "shipping parts in" to the island. My local estimate said new parts were not required. And the rental agency has reminded me this is not a negotiation.

The credit card offers supplemental insurance which would cover my $1,000 deductible. So up front, this would not cost me out of pocket.

However, my personal auto insurance will be dramatically affected. If a claim is over $1,000, it affects my monthly premium. A LOT. Currently my auto insurance is $541/6 months. With this accident, my rate would go up $249/6 months, for a total of $790/6 months. This would last three years. So the total cost for me over three years will be $1494 (249x2, x3 years).

The thing that pisses me off the most is it wasn't really an "accident" of obvious negligence or carelessness on my part. I understand there is damage to the car, but I'm not a bad or careless driver. The roads were horrible. It was a hidden rock, I had no idea it was even there, I couldn't see it in the dark. Could have happened to anyone. Yes I should have taken the coverage the rental agency offered however, in hindsight. But I feel like the penalty on my auto insurance is excessive and severe.

I realize it's essentially my fault, but I'm trying to minimize the damage to my wallet here. The rental agency is threatening to send it to collections if I continue to challenge them or ignore them.

Do I have any options to mitigate this? Should I just shut up and suck it up? Is there anything I can do? Thank you.

 

[Hoosier]

It's 100% an at fault accident. I highly doubt the Rock was trying to commit suicide and ran out in front of you. It is your responsibility not to hit inanimate objects. It just makes me laugh that you would think that you should not be held accountable. Try calling your agent, or is he a lizard and that's why you're here? Either way, you have probably already been charged with an accident whether you claim it on your insurance or not. Don't be surprised when your renewal rate goes up.

 

[InsCommentary]

Even if you had bought the rental car company's loss damage waiver, it is voided if you violate the rental agreement. Most of them prohibit the use of the vehicle off paved roads as one example. Credit card coverage may be voided by the same thing or even by purchasing the LDW. That would leave your auto policy and most good ones don't exclude such use. Another example is DUI...not covered by the LDW, probably not by the credit card, but covered by a good auto policy.

The belt and suspenders approach is to have auto physical damage coverage as a backup to the LDW. When I rent a car on a trip, the cost of the LDW is usually 5-10% of the total trip cost. It's simply part of the overall trip budget.

 

[seeeker]

Thank you for the replies, but they don't really address my central point - looking for opinion on mitigating my penalties (which I believe are excessive).

I'm not saying I'm not at fault, and I'm not saying I shouldn't be held accountable. I'm mostly upset that it is affecting my personal auto insurance so excessively. With a damage cost of 1700, and my increase totaling 1494 over three years, it's like I'm paying the insurance company back. What is the point of insurance if I am just paying them back? Insurance is a gamble for both parties. Usually the house wins, but sometimes they have to pay claims. And they are now penalizing me severely because they lost the gamble this time. Boo hoo. I feel I'm being penalized severely for what I believe is a minor damage event. It's not like I ran a red light and plowed into a minivan.

One idea I had was to just pay the 1700 out of pocket, and leave the insurance out of it completely. This way my rate would remain the same, and I wouldn't have to deal with months of claims and documentation. (And I could shop around for new insurance, because I think Am Fam is rather expensive). Opinions?

Driving on dirt roads outside of rental agreement is irrelevant. The island is full of dirt roads, the road conditions are abysmal, they know that. There is no avoiding it. Half the rental fleet is jeeps. In hindsight I would have done everything differently of course - rented a jeep, took the LDW.

And I'm also just trying to understand the insurance world a little better, understand my options, and like I said I'm just hoping to mitigate the penalties here, not escape accountability. Thanks.

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My agent had no worthwhile advice. He just said "Call me if you want to make a claim." Is he on my side at all?

 

[InsCommentary]

The agent may have already put the insurer on notice. Under the law of agency and quite possibly the agency/company contract, the agent is obligated to report all known risks of loss to the insurer.

Sometimes rental company charges have a way of growing in the form of loss of use claims, diminished value, administrative fees, etc.

Driving off paved roads isn't irrelevant if you buy the LDW and it is voided by driving off paved roads.

 

[seeeker]

Driving off paved roads isn't irrelevant if you buy the LDW and it is voided by driving off paved roads.

Duh didn't you even read what I wrote? All the roads on the island are in **** condition, there are dirt roads everywhere, they know that.

 

[jlanier]

If I were in the same situation and it was monetarily feasible to do so - I would pay out of pocket for the damages. Insurance is purchased for protection. An incident of this severity is easy for the carrier to recoup over a time period. However, if you had totaled the rental vehicle there is no way for insurance company to ethically increase your rates enough to reimburse them for the damages. More than likely the premium would have increased approximately the same amount as they are proposing it will increase in this situation.

Prior to getting into insurance I would have filed the claim unknowingly. However since becoming an agent I have seen many claims should be paid out of pocket.

Pay out of pocket if you can - shop with a local independent agent and purchase a policy that has accident forgiveness - read the accident forgiveness criteria and should you find yourself in a situation such as this in the future you will be more prepared.

 

[seeeker]

jlanier, Thank you. Finally some constructive advice.

I think I will pay out of pocket. This way I will avoid dealing with the two claims (my primary insurance and the supplemental from the credit card,) and avoid months of paperwork and headaches, and increased rates. It's a real pain in the ass, but I'm learning a lot from this experience. And I will shop around for different/better coverage. Cheers.

 

[djs]

Don't chase a bad incident with potentially bad advice. At this point, paying it yourself may not prevent the insurance premium increase. It might, but technically, it isn't what the payout actually is, it is based on the amount of damage done. Since its already been reported to the carrier, they can still rate for it and if you paid for the claim and then have the increased premium, that is a double whammy.

I don't understand the hesitancy of filing the claim with the carrier. Yes, all you are effectively doing is 'financing' the damage over 2 1/2 years (renewals have a funny way of making a 3 year rate increase be only 2 1/2). Also, some carriers have a higher 'penalty' upfront which then decreases over time, so it may not be as much as you think.

Also, when you get the renewal with the premium increase, you can shop the policy and see if you can get a better rate elsewhere. Accidents coming and going on a policy are a perfect time to do it. Don't worry about it though till you see the premium increase on a renewal bill.


Dan

 

[jlanier]

I guess I look at it from a pessimistic view. What happens when you turn this claim in let insurance pay then 6 months down the road have a decent sized claim that isn't possible to pay out of pocket? Then you have two at fault accidents on your record and are being thrown in to the substandard market. I've had clients that have had this happen and they come in and ask if they can pay back their initial small claim - at that point it's too late.