Zipcar insurance, part 3

A couple of months ago, I spoke to three Zipcar executives about the Zipcar insurance situation. I reported then:

Zipcar told me that they’re going to make it much clearer on their website that their liability coverage is pretty weak; this fact has been very, very buried up until now.

Two months later, what’s happened to the web page saying that “gas, reserved parking and insurance are included in all of our rates and there’s no crazy paperwork and waivers to fill out”? Um, it’s still there. The main “How does Zipcar work?” page still tells you to “remember, gas and insurance are included”. The only change is on the insurance page (part of the small print, and hard to find), which used to say that “Insurance is just part of your Zipcar membership” and now says that “Basic insurance is part of your Zipcar membership”. They do now helpfully provide a list of state-mandated insurance levels, too.

The main thing that hasn’t changed is the insurance situation. The amount of insurance that Zipcar provides (or doesn’t provide) is exactly the same as it ever was, and you still have no ability to buy extra insurance from them if you want it. Instead, you’re told to “consult with a licensed agent” to see if you can buy the extra insurance elsewhere — something which is both a major hassle and very expensive, since no one’s going to sell you insurance for a two-hour car rental.

I’ve also learned something else about the holes in Zipcar insurance, thanks to a comment on my second post. It’s not just liability coverage they lack: it’s also uninsured motorist insurance. What that means is that if an uninsured or underinsured motorist runs into you, Zipcar’s insurance will not cover your bodily injuries. And again, of course, they don’t offer that even as an optional extra.

I sent Kristina from Zipcar an email two weeks ago, asking her what the developments were on the insurance front. I never received a reply. So this afternoon, at 3:39pm, I phoned her at her PR company, RF Binder. I was told she was working at Zipcar; I asked for her number there, but the woman answering the phone wouldn’t give it to me. Instead, she took down my message, and said that someone would get back to me.

At 3:59pm, I got the following comment on my old Zipcar post, from someone calling himself “Jude Carlson”:

Why are you so negative about Zipcar? Did you know that 100,000 people use it? Obviously, they can’t all be wrong about the company. Morover, you are loosing sight of the fact that their program reduces gas emmissions at a greater rate than any other organization and helps people become more mobile at a reasonalble cost. It is easy to point out faults with anything or anybody, but one question we should all ask ourselves is; “Am I doing as much as Zipcar to improve the enviroment and the lives of a hundred thousand people? What have you done latley?

My Movable Type software helpfully logs IP addresses, and this one came from, which I looked up. And guess what? It’s registered to Zipcar California Inc!

At this point, then, I’ve stopped giving Zipcar the benefit of the doubt. I think that they are not serious about fixing their broken insurance situation, and indeed it seems that rather than simply return my phone call and talk to me, they’re much happier to leave sock-puppet comments on my blog — a classic sign of bad faith.

Up until now, I was reserving judgment. My commenters generally seemed to think that Zipcar was being deliberately misleading, while I still thought there might have been a genuine mistake. Now I agree with those commenters: I’ve caught Zipcar red-handed in one of the most notorious and devious tactics of all. Shame on Zipcar, and I’m going to start looking for an alternative car-sharing company.

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38 Responses to Zipcar insurance, part 3

  1. Saul says:


    Zipcar was commenting about themselves on your board. That is just bad….but it does explain what they are up to instead of fixing this problem


  2. Bobbi says:

    This insurance thing is a big deal and the fact that they are writing rouge comments is a big deal but I think the bigger deal is the fact that Zipcar is a membership based operation and even if they were never going to do anything about your request they still should have called you back and not ignored you.

    If this is how they treat their members it makes me glad that I am a member of Autoshare (the other car sharing service in Toronto)


  3. Lance Knobel says:

    Sad that you can’t use City Car Share, which has decent insurance and runs as a non-profit:

    I’m completely devoted to it.

  4. Anonymous says:

    Since I have a choice in my city (Washington DC), your posts have made my choice clear – I will be using Flexcar, not Zipcar. Flexcar’s insurance coverage probably isn’t much better, but Zipcar’s dishonesty and lack of good faith have convinced me they’re not getting my money.

  5. Unlucky says:

    Don’t I know it! I got into an accident in a zipcar and I had to pay a $500 deductable even though it was not my fault. If boston had another carshare option, I’d take it.

  6. sam says:

    So, where’s part I and II? Sorry i am not so very good at finding the chronological orders of blog posts and i am not good at looking for them also.

  7. Hamilton says:

    Does this potentially make Zipcar a company for people with

    a) no assets because if they’re sued they don’t have anything to take.

    b.) have an expensive umbrella type policy that may cover them in a worst case scenario where the zipcar driver is at fault. Aka hitting a pedestrian.

  8. Steve says:

    I just got an email from Zipcar today:

    “During our investigation, it was discovered that there was minor damage to the Zipcar that occurred during your reservation. To allow you to view and understand the scope of this damage, we have included links in this e-mail.

    These links provide you with photos of the damage as well as an estimate detailing the costs associated with these necessary repairs. Please review these documents carefully, as they serve as the basis for charging you the deductible – $500.00, to reimburse Zipcar for the cost of the repairs for this vehicle.

    This deductible is described in the Membership Agreement that you acknowledged awareness and understanding of at the time you applied for a Zipcar membership.”

    That dent was on the car before I picked it up. They already charged my credit card. I emailed saying it wasn’t me. Any Idea how to fight this ?? I will stop using zipcar if the don’t change their stance on this. It’s $500!!


  9. Jerry says:

    Steve – the same thing happened to me.

    I got the same e-mail, and after my very first reservation, no less. For my Rabbit 2-door Rochester at 25th street in NYC. I argued for weeks that this damage wasn’t mine, and was still charged $500.

    I figured, cynically, that it might be a bit of corporate policy to try to tack-on damage charges to a novice, who might not know better how to fight back. Or, that the garage damaged the car, and tried to blame the damage on me.

    In any case, after suffering weeks of begging for a call from a decision-maker (talking to these poor, kind client service people who couldn’t understand why no one was returning my calls), and then calling Zipcar corporate myself and not getting a response, I found myself with a $500 charge already applied to my credit card AND an account still suspended (since their system still had me “disputing” the charge – despite the fact they already had my $500!).

    I spoke with one of the VP’s, and got all investment banker-style restrained huffy with him, and did get part of the $500 refunded.

    The moral of this story is their customer service and responsiveness to customer issues involving damage is appalling. I’ve worked in finance for years, and advised start-up derivative companies, and I can only assume this is a deliberate strategy, and not a disorganized group of people floundering with how to handle customer issues. Why? I always found their customer service for OTHER issues to be warm and conscientious – helping with a rental, answering other questions, being helpful when I couldn’t figure out how to use the gas card. And the organization around parking, gas cards, NY/NJ ezpass, their website, etc. is very well run. I can only think (and imagine equity investors are very happy about) the extra damage-related claims and mis-information about insurance is strategy, and deliberate.

    Steve, good luck with this. I also hope the insurance liability issue is resolved soon. Like many Manhattanites, I’ve got significant assets, and the thought of max $25/$50k coverage for damage and liability makes my heart sink.

  10. Avinash says:

    We recently launched a new company called Sunday that is very beneficial to Zipcar users. You can store your login details in the Sunday Portal and our team of agents can help you reserve a car real time. You can interact with them via email or phone. Use the promo code “zipcar” for a free month trial.

  11. Avinash says:

    We recently launched a new company called Sunday that is very beneficial to Zipcar users. You can store your login details in the Sunday Portal and our team of agents can help you reserve a car real time. You can interact with them via email or phone. Use the promo code “zipcar” for a free month trial.

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  13. cam says:

    felix, thanks for documenting all of this. invaluable information. i just signed up for a zipcar membership but will definitely cancel and forfeit my $25 application fee. it’s much better to do that than take the insane risk of driving around new york city without proper liability insurance. and the uninsured motorist insurance part is what scares me the most. how many uninsured motorists are driving in the new york area? i don’t want to find out the hard way.

    btw, i can’t believe that someone at zipcar posted that stupid comment. aren’t there ways to hide one’s IP address? if not, don’t post or at least wait until you’re at a public library. what an idiot.

  14. JB says:

    I emailed Flexcar about their liability insurance. I asked them:


    I am comparing joining Zipcar versus Flexcar, and I have two questions regarding Flexcar’s insurance.

    1. Flexcar’s website says “Our coverage exceeds state minimums at $300,000 for accident, plus an additional $5,000 per person limit per accident for medical payments (after the $300,000 is used up).” Can you provide a more specific breakdown of Flexcar’s liability insurance coverage and how that $300,000 per accident is distributed? Specifically, per accident, what are the dollar amount limits on liability coverage to the non-Flexcar motorist, broken down by the maximum dollar amounts for bodily injury per individual and for property damage?

    2. Flexcar’s website says “If a member is involved in an accident that is the fault of someone who doesn’t have insurance then our member and occupants of the Flexcar are covered at state minimums.” In California the minimun liability insurance requirements are

    * $15,000 for injury/death to one person.

    * $30,000 for injury/death to more than one person.

    * $5,000 for damage to property.

    So does that mean if I am driving a Flexcar and I am hit by an uninsured motorist, then my Flexcar insurance will only cover $5000 damage to the Flexcar I’m driving?


    Flexcar sent me the reply below. I still don’t exactly understand how much they pay for property damage to another vehicle, but if an uninsured motorist totals your Flexcar in California, it looks like you’re on the hook for damage above $5000.


    Below is the breakdown of Flexcar’s liability insurance coverage.


    Combined Single Limit (Flexcar)

    Sub-limit: Lessee/Renter


    Medical Payments per person/accident


    Bodily Injury and Property Damage Deductible (Flexcar)


    Uninsured Motorists Protection

    As per State Mandated Min.

    Also, corporate has confirmed that you are correct about your 2nd question.

  15. NYC Zipper says:

    This insurance discussion I have found to be really helpful (! thank you) when I rented a Zipcar pickup truck to move some items and was almost charged for $500 damage not caused by me, and I started to research this automatic $500 you could be fined.

    In the end, they waived it after much discussion. Lesson learned: absolutely absolutely walk around every Zipcar you use and note damage and call it in. Also, for pickup trucks, go to the traditional sources, as many amateurs drive the Zipcar truck fleet and damage them and don’t call it in (because there’s no incentive for them to do so).

    It used to be that if you started your reservation late (say you collected the car an hour or so after you reserved it if you sleep in), your damage report would not be accepted; at least now Zipcar will accept a damage report at whatever point you start your reservation. Agreed?

    As someone who runs a rental fleet operation (granted, of bicycles, not cars), I find that my overall experience of Zipcar is not consistently meeting my expectations (or theirs). In the beginning, before the injection of capital from General Electric, the fleet seemed better – maintained as it was smaller.

    Now, it seems as if every third rental I have, something goes wrong. Prior inconveniences include: a flat tire on a Zipcar, the Zipcar not there, duct tape holding up a glove compartment, the Zipcar’s EZpass account empty (thus generating a fine for me), the attendant out for a joyride in my reserved Zipcar (!@@##), and a drained engine coolant reservoir, thus spoiling a planned outing on Long Island as the car had to be returned to its garage to protect the motor from damage.

    Love the concept, love the rental fleet diversity (who else rents Minis, after all?), and love the simplicity and fairness (Zipcar won’t put a surcharge on you if you live in Brooklyn like Hertz, e.g.). But the randomness is beginning to worry me. Is this off-topic?

    NYC Zipper.

  16. andy says:

    I haven’t owned a car in many years, so when Zipcar said that insurance was included, I took them at their word. However, a recent Zipcar email said there’s a $500 deductible if you have an accident, the same as if you had private insurance. I’m so thick that when they said they took care of insurance, I thought they took care of insurance. Now that I know about the $500 deductible, I have second thoughts about using Zipcar. In my experience, their cars aren’t particularly well maintained, raising the possibility of an accident. The big auto rental companies go over their cars; at the very least they vacuum them. Since I have a family, I think I would rather rent from one of the biggies, pay the collision damage waiver and have a little more peace of mind. Does anyone have any thoughts?

  17. Timjbd says:

    According to their website, they now offer $300k in liability (apparently this is since they bought out Flexcar):

    Thanks for getting to the bottom of it all, though.

  18. Charlie says:

    On Saturday, July 21, I drove a Mazda 3 from the garage on 144 Street and 8 Avenue to pick up my mother and 2 more people from Newark Airport. On Friday, July 27, I got this e-mail:

    We are contacting you regarding a damage report we received following your reservation on 6/22/08 in your Zipcar. As you know, we depend on our members to be our extra set of eyes and since the damage was reported following your reservation, we hope that you can work with us to resolve this issue.

    We are not assigning blame, nor have we confirmed the damages to the car. We are simply following up on the report that we received. We will thoroughly investigate the damages reported and will update you regarding the status of this incident.

    Per our Member Agreement (section 9.6), damages incurred during a member’s reservation are the responsibility of that member. That responsibility can include payment of the damage fee for repairs. It is also essential that you do your pre-reservation walk around and report existing damage to 866-4ZIPCAR. This helps us determine when damage to a Zipcar occurred, and lets us know that it didn’t occur during your reservation. We trust our members and do our best to weigh all of the various possibilities and scenarios when investigating a damage report. While we look into this, we would appreciate it if you could reply to this email to let us know if you have any information about the damages. For more information on our minor damages policy, please refer to your member agreement.

    If you have any questions, please feel free to call Member Services at 866.494.7227

    I did not cause the damage (some scrapes on the sides of the car, plus chipped paint on the rear), which means that the damage was caused by someone else– maybe one of the garage attendants, nor did I do an inspection of the car. I responded to the e-mail by saying that I did not cause the damage. On Tuesday, July 1 I got this e-mail:

    As you know, we have been investigating damages to Mineral that were reported after your reservation. We have completed our investigation of the damages and based on the information available to us have determined that the damages were incurred during your reservation.

    To allow you to view and understand the scope of the damages, we have included links to photos of the damage, as well as a detailed estimate of the cost of the necessary repairs. We will allow you to respond within 72 hours before charging your account. Please review these documents carefully as they outline the basis for charging you the damage fee for repairs (up to $500.00).

    The minor damages policy, as well as the practices for resolving damage issues can be found in your Membership Agreement, which you agreed to and signed upon application to Zipcar. We appreciate your patience and understanding, as we continue our mission to provide the best service possible for all our members.

    If you have any questions, please feel free to contact the local Zipcar office.

    The same Zipcar rep called me the next morning, and I told him that I did not cause the damage, nor I did not do an inspection of the car. The rep told me that they would investigate prior reservations to mine to see if the damage was caused then. I thought I was off the hook until I got this e-mail today (Monday, July 14):

    We were not able to confirm that the damage to Mineral existed prior to your reservation. Because this damage was reported directly after your reservation, and was not reported by you on your pre-reservation walk around, you are responsible for the damage fee. We have charged the damage fee amount of $500 to your account.

    At this point we consider the matter closed. If you would like to appeal this charge, you may do so by filling out the following form and sending it to Zipcar’s corporate office for review.

    Attatched to the e-mail were an appeal form and the bill for repairs ($1,043.05). On the appeal form, I just have to fill in my member info, and a member statement stating the account of the incident. The $500 was shown on the “Reservation and other activity” part of the bill, but not the “credit card activity” part of the bill. It was not shown on my credit card statement neither.

    I know the best thing to do is to appeal at this point, but what should I put down when I don’t have any proof of the damage? HELP!!!

  19. Emil T says:

    Charlie – I am in the exact same situation… i borrowed the BMW Billows on the Upper East Side in Manhattan on July 18, 2008. I had noticed some minor damage above the front left wheel which I should have called in… Now I’m getting slapped with a $500 charge for damage that I didn’t cause! Either someone prior to me didn’t notice they did this or they were just hoping that they could sneak away without getting caught… which seems to be the case now.

    I guess my situation is slightly different in that I noticed the damage and didn’t think much of it. ZipCar is convenient – but that comes with a price sometimes.

    Anyone has any ideas on how to get out of this? There’s really no way to prove my case… I feel like I’m guilty before being proven innocent.

  20. Charlie says:

    Zipcar is convenient– but it could be BS also. Ever since that incident, I report ALL damage. In fact, my last 3 reservations all had some type of “damage” to the car. Zipcar makes it so unclear for which “damage” to report in. The reason why I habitually did not report any damage was because 1. most vehicles do not have any damage, 2. most vehicles do not have any noticable “damage” which I’m not even too sure to report in. Once I become 25 years old, I’ll start renting a car from traditional agencys more.

    As for the appeal, I mailed it out on July 17. On the appeal form, it said that they would come to a decision within 30 days, but so far I haven’t heard from them yet. I doubt I will get my $500 back.

    One last thing, I signed up for text alerts from Zipcar to see if my reservation could be extended, and I don’t even get that all the time. One time I did not get my text until 30 minutes AFTER my reservation ended! **** Zipcar!!

  21. Charlie says:

    As for my previous incident back in June, the appeal was declined and they just took away my $500. Today I got this in an e-mail:

    Dear Charles,

    Thank you for your response. Please remember as per the Rules of Vehicle Use (section 6.2), you “must do an exterior walk-around and interior look-over. You must advise Zipcar at the start of your reservation by phone of any new damage or abnormality encountered on the vehicle or in the operation of the vehicle. If Zipcar is not notified of a problem at the start of a reservation, then we will necessarily assume that you caused the problem.”

    Thank you for reporting damage to Mcmann. However, as per our policy, you are to report any damage and/or mess at the beginning of your reservation. I noticed you reported the damage over 3 1/2 hours late while using the car, which is enough time for an incident to occur. The vehicle has been serviced out, and you may be held responsible for the charges.

    On the same day, that same evil rep from June called me about this incident. I told him that I did report the damage but I did not have any minutes on my phone card to report the damage. Just like before, he said that he will send an e-mail to the previous user before me to see if he caused the damage. That does not make any sense, it is better to report damage 3 1/2 hours late than not to report it at all. I have a haunch that the evil rep will get me again.

  22. sjz2004 says:

    I should have read your blog before registering for zipcar.

    I had not idea that zipcar did not offer any liability insurance. I think 99% of the zipcar customer do not know that they are not fully covered. This is very dishonest way of doing business.

  23. Ryan says:

    I guess I just don’t see the issue. I carry separate liability insurance. I never rely on any rental car company’s insurance. I don’t view Zipcar as any different. I do however thing it might be a good idea for them to offer the additional coverages like Hertz and the others do.

  24. Seth says:

    Beginning November 1, 2007, for Zipcar members 21 years of age or older, our insurance coverage consists of a combined single limit of $300,000 per accident, meaning that all third party bodily injuries, or property damage costs relating to the accident covered in the aggregate up to $300,000. For drivers under 21, we provide coverage up to state-mandated levels, which vary by the state in which the accident occurs. Zipcars are covered under a vehicle collision policy.

    For both third party or vehicle damage claims, the member is responsible for a damage fee of up to $500 to cover repairs if the accident is his or her fault, or if no fault is assigned. Members age 21+ have the option to purchase a damage fee waiver to reduce that amount to $250, or to eliminate it altogether.

    Zipcar provides Personal Injury Protection (PIP), or “no-fault” coverage, at statutory limits for our members if they are injured in an accident. Members may also use their own health care coverage in case of injury.

    If the total amount of the injuries and/or property damage exceeds our coverage limits, Zipcar members are responsible for this excess and will be contacted by either Zipcar, our insurance provider — Liberty Mutual — or the insurance company representing another driver involved in the accident.

    Members engaging in prohibited uses of our Zipcars are not covered. You are not covered as a Zipcar member in any vehicle not supplied by Zipcar. A non-member driving a Zipcar is not covered as well. We will revoke membership if we learn about unauthorized use.

    If you have any concerns about the insurance coverage Zipcar provides and whether it works for your personal situation, we encourage you to consult with a licensed agent and put them in touch with us if needed. You can reach us

  25. RP says:

    As of Sept 2007 they have expanded their insurance to 300k for all members over 21. Members are covered for any property damages or medical costs up to that amount. So unless you put someone in the hospital with major injuries and total both cars, you should not have to pay more than the $500 damage fee.

  26. I find that the services provided provided by Zipcar are really very good and helpful…this post is very helpful for me…Thanks for this post.

  27. vbtwo says:

    Well, to play the devil’s advocate, Zipcar rules clearly state that you should walk around your car and report any damage that you see before you drive away so that they know that it was there before your reservation. Otherwise, if the next person after you reports the damage, they assume that it was caused by you. If you’re lucky, the next person also won’t call it in and then it will be his problem if the person after that calls it in. I have recently been hit with them on this as I was in a hurry and didn’t look, but apparently there’s a dent in the bumper that the next person called in, so they assume I caused it.

    In addition, they now offer a $75/year damage waiver that gets rid of the deductable. If you’ll be using Zipcar a lot, I think it’s worth it for the peace of mind that you won’t get hit with a large charge for something that you didn’t notice (or if you’re in an accident where they can’t prove conclusively that it was the other guy’s fault). It’s possible also that your credit card covers damage to your car (not Visa though, Visa doesn’t consider Zipcar to be a rental for whatever reason), so you might want to call your credit card company and file a claim, the worst that will happen is that they deny it.

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