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A class action lawsuit has been filed against Visa Inc. in a California federal court Monday alleging that the credit card company did not honor its policy to cover theft or damage for cardholders who rent cars from Zipcar, claiming that it’s “not a car rental company.”
Washington state resident Ron Davis filed the Visa rental car insurance class action lawsuit after using his Alaska Airlines Signature Visa credit card to rent a car from Zipcar on Oct. 14, 2012. Visa’s Auto Rental Collision Damage Waiver “‘provides reimbursement for damage due to collision or theft up to the actual cash value of most rental vehicles.” The damage waiver is enacted when a cardholder turns down the damage waiver offered by the rental car company.
Zipcar would not allow Davis to turn down the mandatory insurance for his rental, but he did turn down Zipcar’s optional insurance that would cover the deductible. By doing so he believed that he “activated VISA’s Auto Rental CDW benefit.”
While Davis was using the car, it sustained about $720 in damages, according to the class action lawsuit. “The deductible for Zipcar’s mandatory insurance was $750,” which means that Davis was responsible for covering the whole bill.
He claims he filed a claim with VISA in a timely fashion, and it was denied because VISA claimed that Zipcar is not a car rental company, but “car share” company. VISA also said that when Davis declined “the optional deductible insurance did not satisfy the condition that the consumer qualify as ‘decline the collision damage waiver (CDW) coverage if offered by the rental company,” the claim states.
Davis alleges that not covering card holders who rent from Zipcar is part of VISA’s secret policy.
“While VISA does disclaim certain types of rentals or transactions in its Auto Rental CDW agreement to consumer, Visa fails to make any disclaimer or exclusion for rentals made through Zipcar,” the class action lawsuit states. “Regardless of Visa’s internal policy, Zipcar is a car rental company, and thus rentals made through Zipcar are covered by the Auto Rental CDW benefit.”
Davis explained in his class action lawsuit that “Zipcar customers do not ‘share’ ownership in the cars they rent, and indeed have no ownership in rights in the vehicles whatsoever.”
He also argued that he was not allowed to turn down Zipcar’s mandatory insurance policy.
He was only seeking “reimbursement for that potion of costs which would have been covered by the declined, optional deductible coverage.”
He also explained that “the mandatory insurance offered by Zipcar is an insurance policy provided by a licensed, regulated insurance entity, not a ‘collision damage waiver’ as described in the Auto Rental CDW Benefit Agreement.”
Davis is charging VISA with breach of contract, breach of good faith and fair dealing, declaratory relief, and violations of the Consumers Legal Remedies Act, California Civil Code and the Unfair Competition Law, Business and Professions Code.
He is asking that his lawsuit be certified as a class action suit.
The plaintiff is represented by Charles D. Marshall of Marshall Law Firm.
The VISA Car Rental Insurance Class Action Lawsuit is Ron Davis v. Visa Inc., Case No. 3:13-cv-5125, in the U.S. District Court for the Northern District of California.
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