When you hire a rental car, not only do you pay for the hire of the car itself, but the company will be offering to you to maximise your cover to reduce the excess you have to pay in case you have an accident or incident and need to make a claim. The companies make big money out of these add ons to the amounts you pay.
To provide “Maximum Cover” a standard daily rate with a hire car company can be $45. If you paid that annually, that is a sum of $16,425. That’s expensive insurance if it was insurance. The policy on your own car will no doubt be generally under $1,000 per year.
But here is the catch. What you probably don’t realise or see at the time, and the rental companies don’t want you to realise or understand is that they are not offering you insurance at all. If you look closely, you will see that the hire cars do not use the word ‘insurance’ at all in any of their material – they will use words like “Cover” or similar. It is and has been found by the courts, that these representations are misleading and deceptive. Rental companies continue to advertise the services they provide in the same way. You have rights under the Australian Consumer Law to protect you against the practices of the hirer.
So the real issue comes if you have to make a claim because there has been an accident and you believe that you should make a claim on the ‘insurance’ that you paid for when you hired the car. The first problem is that if you don’t pay the ‘Maximum Cover’ reduction or similar, you will have to pay an excess of several thousand dollars. You should check your credit card if you paid with one as quite often, credit cards provide cover to pay the excess. Make sure you understand though what your credit card is going to pay for and how much.
The next problem is actually getting the hire car company to cover for your loss. So this is where the problems start. You thought you had insurance but you don’t. What you have got is a contract with the insurance company to cover you for damage (or not) depending on what has happened.
So you need to understand what those terms and conditions say in the contract. When you take out insurance for your own car, you know that even if you are at fault, then you can make a claim knowing that you will get a pay-out. It is also often the case that you may have made a mistake like going through a red light or similar breach of traffic regulations.
That is why you have insurance in the first place due to accidental damage and that ‘maximum cover’ should mean you don’t have to pay any excess. But things are very different with the rental car companies and their terms and conditions and more importantly, the exclusions in the contract. Such exclusions can include matters such as if you cause the accident (that’s why you have insurance though!), break a road rule, hit a kangaroo, drive in the snow or on an unsealed road, on a beach, damage to the roof (you went under a low bridge etc) and the like.
So instead of getting insurance cover, what you end up with is potentially a claim against you by the owner of another vehicle but also, a claim against you by the company you hired the vehicle for damage to it, hire costs and the like because you don’t have any insurance.
It will depend on the circumstances, but you rightly have cause for complaint and rights to pursue the hire company not only to cover you for a claim made against you say by another driver, but also to protect you against any claim the hire car makes against you. It is quite common such claims are made.
Aitken Whyte Lawyers have successfully negotiated outcomes with rental car companies in these circumstances. There are court decisions that will support you if you need to make a claim or defence proceedings.
You should contact us if you believe your hire car company is trying to rely on its terms and conditions not to pay you for losses you have sustained in an accident. It may be that they have to indemnify you.
Aitken Whyte Lawyers
Level 6, 9 Lawson St, Southport
Ph: +617 5596 9099