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Why do rental companies charge a large excess when the repair cost is small? What happens if I'm "not at fault"? Will I get my money back? When?

WARNING! This is really long and boring!

There's a lot to insure here so please bear with us. This FAQ talks about several inter-related and quite technical concepts. It shouldn't be so technical, but remember the rental companies like to make it technical so they can rip you off. You can be "all over" the detail by reading on, or if its TL:DR (Too Long Don't Read) just call us!


What happens if there's an accident?

You pay the rental company and we reimburse you the repair cost.

What if the excess charged by the rental company exceeds the repair cost?

If its a single vehicle accident the difference will be repaid within a week or so unless the rental company is particularly disorganised or greedy. Once that refund takes place we are ready to pay you the outstanding amount. This is why our target for claims payments is 7 business days.

If its a multiple vehicle accident it's a different story. Keep reading...

What's the process if there's more than one vehicle in the accident?

The rental company will deduct your full excess. They will hold that amount way beyond the time when the repair is completed.

Why?

Rental companies will hold your money for as long as possible because let's face it, that money is nicer sitting in their bank account rather than yours. This is just another questionable practise by the rental companies (there's heaps). Their excuse is that there is an investigation by the insurers of both drivers taking place. What it means is that you are out of pocket while the insurers determine who was "at fault". That period can be 3 months for a simple matter (where the "at fault" driver is already agreed) and 12 months if the "at fault" driver is not agreed.

That process is called "subrogation". So for up to 12 months the rental company keeps your money even though they paid the repairs - using your money - within a week of the damage occurring.

So summarise what that all means!

The rental company will deduct the full excess amount if there's significant damage to the vehicle. Timing for your refund will differ dramatically:
1. If the accident involves your vehicle only, you will get a refund soon after the repairs are done.
2. If the accident involves two or more vehicles, the rental company will keep your full excess payment well beyond the time when the vehicle was repaired. Their excuse for doing so is that the "insurers are investigating". You will get a full refund eventually (once the insurers close the case or the rental company gets sick of your complaints) and that refund amount will be either:
a) The excess charges less repair costs, or
b) if the rental company refunds drivers who weren't at fault you will receive a refund of the full excess that you paid.

Did you see that point #2(b)? Most rental companies won't refund you if you weren't "at fault".

Yes that's correct. If you weren't at fault and their terms and conditions don't stipulate that refunds are owed to their drivers who were "not at fault" in an accident, the rental company will collect a cheque for the cost of repairs from the other driver's insurer. Yes, they collected it from you too because they will only refund you the difference between the excess that you paid and the repair cost! So yes, they make a tidy profit and they kept your entire excess payment for up to 12 months!

What is our view on all this?

Referring to the above:
#1 is acceptable.
#2 is not acceptable. They should refund the difference between your full excess charge and the actual repair costs immediately after repairs are done. There's no excuse for holding onto your money given they will be refunding - as a minimum - the difference between the excess charge and your repairs. If they refund their "not at fault" drivers, the rental companies are effectively waiting up to 12 months to refund you because they can't decide if they should refund you part of the total cost or all of the total cost! 
#2b is not acceptable because we believe rental companies shouldn't make a profit from damages. If they get money from the "at fault" driver's insurer it should go to you. Instead those companies that don't refund "not at fault" drivers are making a profit on the accident! 
 
Here's what we do about it...

We use our legal resources to pressure the rental companies to refund the difference between your excess charge and the repair cost and we separately pay you the repair cost in full as part of our normal claims process (that's what our policies do). If the rental company's policy is to refund drivers who are later proven to be "not at fault", we arrange for the subsequent refund to be paid into our bank account (because you've already successfully claimed and received payment for that same repair cost). This keeps our customers happy because they forgot about the whole thing 12 months ago!

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