“A person, Mr. A, had a bizarre experience in May when using a rental car. After hearing from the rental company that there would be no deductible for vehicle damage, Mr. A enrolled in ‘super car’ insurance. Upon returning the car, he noticed some damage on the vehicle and informed the staff to request insurance coverage. However, the company demanded repair costs of 200,000 won, stating that since the accident was not reported immediately, it was excluded from insurance coverage. Mr. A requested a refund of the repair costs, claiming that such details were not in the terms and conditions, but his request was denied.
With the increase in rental car usage during the summer vacation season, consumer damages related to rental cars are also on the rise. According to the Korea Consumer Agency on the 16th, there were a total of 1,743 applications for rental car-related damage compensation from 2019 to 2023. Among them, the highest number of applications, 519 cases (29.8%), were during the peak travel demand period of July to September. By region, there were 1,083 cases (62.1%) on the mainland, 639 cases (36.7%) on Jeju Island, and 21 cases (1.2%) overseas. Most of the cases, 1,342 cases (77%), were related to contract and accident disputes.
In particular, until 2022, there were many disputes related to contract termination, breach of contract, etc., but last year, it was revealed that disputes arising from accidents were the most common. Of the 617 accident-related disputes filed from 2019 to 2023, the highest number, 458 cases (74.2%), were related to excessive claims for repair costs. The next most common reason was exemption or denial of insurance coverage, with 107 cases (17.3%).
Many issues arose, such as charging repair and deductible fees without providing estimates when returning rental cars, or not providing detailed repair invoices or cost evidence after repairs. Disputes over separate car insurance products, sold at high prices by rental car companies under names like ‘full car’ and ‘super car’ (vehicle damage waiver system), were also reported.
The Korea Consumer Agency pointed out that while rental companies claim to fully exempt (compensate) all costs for vehicle damage, in reality, many cases involve low exemption limits requiring customers to pay for repair costs exceeding the limits, or full exemption not being applied in the event of a single accident.
In the event of vehicle damage or accidents, consumers should immediately inform the rental company on-site and request repair estimates and detailed repair invoices. The Korea Consumer Agency urged consumers to carefully examine the terms and conditions, including the existence of a deductible, exemption limits, and excluded exemption ranges, rather than being deceived by terms prior to purchasing car insurance.
The Korea Consumer Agency plans to carry out consumer damage prevention activities focused on the concentrated demand for rental cars during the summer vacation season in Jeju Island. Starting in mid-July, in collaboration with the Jeju Special Self-Governing Province, they will visit rental car companies within the province to inspect rental agreements, vehicle maintenance status, and operational conditions. They also plan to create promotional materials containing precautions for each stage from reservation to return, and distribute them at major tourist sites.”