Do you purchase Damage Waiver when renting a car?
Moderators: Josh, independent guy
-
mrs dean wormer
- Insurance Journal Fan
- Posts: 4
- Joined: Fri Dec 17, 2010 9:24 am
Re: Do you purchase Damage Waiver when renting a car?
You hit the nail right on the head for me, Lonestar. "Only" $13/day is about 20 times what I pay for insurance on my own car, for similar coverage. I always decline the CDW!
Re: Do you purchase Damage Waiver when renting a car?
Now that you have made an educated decision to decline the CDW rent car coverage, you should not be upset if your auto insurance policy increases 25% a year (or more)for the next 3 years if the rent car is damaged by hail, or is damaged by a hit and run driver. I agree that you should look at you pay, but I would also suggest that you also consider what it could / would COST you if you decline the CDW coverage and have to file on your own policy to fix the rent car. If you are in an "at-fault" state, then your personal auto policy will charge you accordingly for a few years after the claim is paid. I personally would rather pay the $13 a day, then take the chance that my future auto rates would increase due to ANY accident, theft, glass claim, damage caused by an uninsured motorist, or act of God causing damage to the rent car. It also makes it very difficult to change insurance carriers if there are one or more "at-fault" claims on the driving record. I will save those "at fault" surcharges for when I drive my own personal car into a telephone pole. Just my .02 cents. For those that do not live in an "at fault" state, your mileage may vary.mrs dean wormer wrote:You hit the nail right on the head for me, Lonestar. "Only" $13/day is about 20 times what I pay for insurance on my own car, for similar coverage. I always decline the CDW!
Re: Do you purchase Damage Waiver when renting a car?
if you have an AF while driving a rental car it will still affect your rates same as if you got a speeding ticket in a rental car. buying the damage waiver will not change that.
Re: Do you purchase Damage Waiver when renting a car?
itzawlgud, you are correct, and no one is disputing this type of claim. What I was referring to was the types of claims that are not considered "at fault" normally, but would cause the same type of resulting surcharge on one's own personal auto policy if the CDW coverage was waived, such as: Rent car being damaged by any comprehensive event, or by an uninsured motorist, or heck, even if the rent car was damaged by an insured motorist. By declining the CDW coverage, you give the rent car company(by signing the rental agreement) a legal right to file against your personal auto coverages FIRST to fix the rent car. This can be avoided by purchasing the CDW coverage. And we have not even got into loss of use damage the rental company can claim, as well as diminished value damages. Who wants to fight all this just to save $13? To use an analogy of different product of insurance, we can all save a lot of money by not buying life insurance, but what does it COST us(our loved ones) if we decline the life coverage and we die? Isn't there a saying that mentions something like a penny wise and a pound foolish?
Re: Do you purchase Damage Waiver when renting a car?
That is a silly comparison comparing CDW to Life Insurance. You should insure the catastrophes that you can not afford to pay and retain or self insure the other smaller risks you can afford to pay. Life Insurance is the former and CDW is usually the later. If paying a CDW claim over and above your personal insurance or credit card coverage would drive you bankrupt or at least cause you severe financial harm, then buy the CDW.
Personally, I am so outraged at the cost of CDW that I would not give those crooks the money just on principle. If you think $13/ day (which is a sizable portion of the rental cost) is insignificant, then you probably don't need to buy it anyway.
Personally, I am so outraged at the cost of CDW that I would not give those crooks the money just on principle. If you think $13/ day (which is a sizable portion of the rental cost) is insignificant, then you probably don't need to buy it anyway.
Re: Do you purchase Damage Waiver when renting a car?
Lonestar, we realize Texas is a whole 'nuther nation, but the rest of us using the ISO PAP cover damage to a rental car from the Physical Damage section. The old Family Auto Policy paid under the Liabilty section, but that was changed years ago when the PAP replaced it and moved coverage for damage to non-owned autos to the Physical Damage coverage part.
We always recommend taking the LDW from the rental car company. To advise your client their personal auto policy is sufficient is just looking for trouble. The diminution of value is one issue but only a few rental companies do this. There more common problems can arise from reimbursing the rental company. 1) for loss of use-if your Rental Reimbursement max is $30 a day and you just crash a $50 a day car, that's quite a load if it's a three week repair. The personal auto policy will not adress handling fees from the rental car company. 2) If relying on your personal auto policy you credit card is dinged for the estiamted bill until you settle up with them, and that can take a while during your insurer's investigation, ordering the officer's report, etc. 3) If relying on your credit card, you have to first submit to your auto insurance carrier, see what they will pay, then send it to the credit card company and wait for their reimbursement.
In the meantime you'll get a letter from the rental car company's loss recovery department demanding immediate payment with a threat to turn you in for collection. The exception to that is the previously mentioned Amercian Express primary coverage program they just introduced. I signed up for that, too.
You'll also have spent time filling out the rental car company's loss report.
If you'll simply advise your clients to take the LDW, their lives will be much easier. Report or return the damaged car and pick up another one to continue your trip. No long forms to fill out, no deductibles to pay, no out of pocket for charges or fees not adressed by your auto policy, no threatening letters seeking reimbursement. And especially no angry client who calls to tell you your advice to depend on their auto policy didn't work out quite so well.
We always recommend taking the LDW from the rental car company. To advise your client their personal auto policy is sufficient is just looking for trouble. The diminution of value is one issue but only a few rental companies do this. There more common problems can arise from reimbursing the rental company. 1) for loss of use-if your Rental Reimbursement max is $30 a day and you just crash a $50 a day car, that's quite a load if it's a three week repair. The personal auto policy will not adress handling fees from the rental car company. 2) If relying on your personal auto policy you credit card is dinged for the estiamted bill until you settle up with them, and that can take a while during your insurer's investigation, ordering the officer's report, etc. 3) If relying on your credit card, you have to first submit to your auto insurance carrier, see what they will pay, then send it to the credit card company and wait for their reimbursement.
In the meantime you'll get a letter from the rental car company's loss recovery department demanding immediate payment with a threat to turn you in for collection. The exception to that is the previously mentioned Amercian Express primary coverage program they just introduced. I signed up for that, too.
You'll also have spent time filling out the rental car company's loss report.
If you'll simply advise your clients to take the LDW, their lives will be much easier. Report or return the damaged car and pick up another one to continue your trip. No long forms to fill out, no deductibles to pay, no out of pocket for charges or fees not adressed by your auto policy, no threatening letters seeking reimbursement. And especially no angry client who calls to tell you your advice to depend on their auto policy didn't work out quite so well.
Re: Do you purchase Damage Waiver when renting a car?
BKCPU, you make a valid point. Different states have different policy forms, and not all states have the same tort / laws on the books(at fault states vs. no fault states). So, I guess the safe thing to do when renting a car, is for everyone to first check with their insurance agent / company and ask the question: "If I deny the CDW rent car coverage, and if the rent car is damaged while in my possession, and my personal insurance policy is claimed against, what are the surcharges going to be on my policy, and for how many years will the surcharge apply and affect my auto rates?" Once the answer is known, then one can make an educated decision as to whether it is a good idea to decline the CDW coverage or accept it.
Re: Do you purchase Damage Waiver when renting a car?
(Borrowed from an article I saw elsewhere...Lonestar)
Secrets to unraveling car rental insuranceBy Jonathan Weinberg
Published January 25, 2012
You’ve probably been there before. You’re standing at the car rental counter, and the agent is trying to terrify you into purchasing an insurance package that totals more than the rental itself. After all, they’re not getting rich off that super $10 a-day deal that you snagged on-line.
Before you dismiss the pitch with a wave though, and initial eight times in the ‘DECLINE’ section of rental agreement, there are some things you probably should consider to ensure sure you’re adequately protected in the event of an accident.
Here’s a quick guide to covering your bases when renting in the U.S. (If you are planning a trip to Europe, for example, that's a discussion for a later date, as policies outside the U.S. vary greatly.
Your Personal Auto Insurance Policy
If you decline the insurance provided by the rental company, then your personal auto insurance policy will often cover you when renting. Assuming you’ve confirmed this with your insurance broker or carrier, then the policy provided by the rental company often duplicates coverage you already have in place.
While there’s peace of mind that comes from being well protected, you may be wasting your money. On the other hand, you won’t have to deal with paying out a deductible, you won’t have to file a claim with your own company, and in some cases, you won’t be dinged for an accident which may drive up your insurance premium.
Your Credit Card May Not Be Enough
It’s fairly common today to have car rental insurance included with your credit card—especially with gold, platinum and business cards. It’s important to realize though that all coverage is not created equal.
Renters who get into an accident often find out the hard way that most cards offer what is known as “secondary” coverage, which basically means that it will only pay out after your personal auto insurance policy has been exhausted (assuming you have such a policy). Some credit card policies also have a deductible.
Credit cards often have many conditions and stipulations on when they will pay out. Some for example will not cover SUV’s, vans or luxury cars. A car rental industry insider I spoke with told me that he’s seen credit card companies try to weasel out of claims for all sorts of reasons, so it’s very important to understand what you are covered for before you decide to rely solely on your credit card’s coverage.
Ask your credit card company for a copy of their rental insurance policy and familiarize yourself with what it actually covers. Even cards from the same company can vary widely in terms of coverage.
Premium Protection from American Express
American Express offers an interesting product in the form of Premium Car Rental Protection for existing Amex cardholders. The way it works is that once you opt-in for this coverage, your Amex card is automatically charged a flat $24.95 each time you rent ($17.95 for California residents). Unlike typical credit card coverage, this is primary coverage, which means that it kicks in before your personal auto insurance policy. There’s no deductible to pay, and coverage limits are much higher than a typical credit card policy. Most vehicles are covered, and you can be covered for up to 42 consecutive days for that single $24.95 fee.
This coverage can be a great idea if you don’t have a personal insurance policy and want to be better protected than what your standard credit card offers. Even if you do have a personal policy, it will provide an extra measure of protection and keep your insurance company out of the loop should something happen.
On any rental of more than two days, you’ll probably come out ahead financially vs. buying LDW from the rental company, since they will charge per day for insurance, while Amex’s Premium Protection is a single fee for the length of the rental.
What About Liability?
The discussion above has focused on coverage for damage on your rental vehicle so far, but what about the unfortunate situation where you damage someone else’s vehicle or property, or injure someone? That’s where liability comes into play. Rental companies are required by law (except in California) to provide state –mandated minimums for liability coverage in the basic rate. While the state minimums may cover most fender benders, in a serious accident you may be sued for more than you’re covered for.
Of course, the rental companies have an answer for this as well in the form of Supplemental Liability Coverage (SLI or SLP). For a per day fee, SLI will supplement the state mandated coverage provided by the rental company, typically up to $1 million. Your own personal auto coverage will be on top of what the rental company offers as standard, so SLI may not be necessary, but if you don’t have a personal auto policy, or you want the extra protection, then SLI may make sense for you.
Note that no credit cards offered in the U.S. include liability coverage.
The Easy (and Expensive) Way Out
While it's no secret that over-the-counter rental coverage is completely overpriced, it does serve a purpose. If you do have an accident, and you’ve opted for the rental company’s Loss/Collision Damage Waiver (LDW/CDW), then the car rental company will waive any repair costs if the rental car is damaged or stolen, provided the car is not driven recklessly or driven by an unauthorized driver.
There is certainly some peace of mind that comes with handing the keys back to the agent at the end of your rental, and not worrying about insurance deductibles, submitting claims to third parties, or getting stuck in the middle when the there’s a dispute.
Be Prepared
Standing at the rental counter on the receiving end of the hard sell on insurance is not the time to think about whether you have the coverage you need. Find out ahead of time what your personal auto insurance and/or credit card covers you for. All coverage is not created equal. Taking the insurance offered by the rental company will provide peace of mind and a minimum of hassle should something happen, but it will come at a price.
Jonathan Weinberg is the founder and CEO of AutoSlash.com, a website that automatically applies discounts, and re-books your rental if rates drop.
Secrets to unraveling car rental insuranceBy Jonathan Weinberg
Published January 25, 2012
You’ve probably been there before. You’re standing at the car rental counter, and the agent is trying to terrify you into purchasing an insurance package that totals more than the rental itself. After all, they’re not getting rich off that super $10 a-day deal that you snagged on-line.
Before you dismiss the pitch with a wave though, and initial eight times in the ‘DECLINE’ section of rental agreement, there are some things you probably should consider to ensure sure you’re adequately protected in the event of an accident.
Here’s a quick guide to covering your bases when renting in the U.S. (If you are planning a trip to Europe, for example, that's a discussion for a later date, as policies outside the U.S. vary greatly.
Your Personal Auto Insurance Policy
If you decline the insurance provided by the rental company, then your personal auto insurance policy will often cover you when renting. Assuming you’ve confirmed this with your insurance broker or carrier, then the policy provided by the rental company often duplicates coverage you already have in place.
While there’s peace of mind that comes from being well protected, you may be wasting your money. On the other hand, you won’t have to deal with paying out a deductible, you won’t have to file a claim with your own company, and in some cases, you won’t be dinged for an accident which may drive up your insurance premium.
Your Credit Card May Not Be Enough
It’s fairly common today to have car rental insurance included with your credit card—especially with gold, platinum and business cards. It’s important to realize though that all coverage is not created equal.
Renters who get into an accident often find out the hard way that most cards offer what is known as “secondary” coverage, which basically means that it will only pay out after your personal auto insurance policy has been exhausted (assuming you have such a policy). Some credit card policies also have a deductible.
Credit cards often have many conditions and stipulations on when they will pay out. Some for example will not cover SUV’s, vans or luxury cars. A car rental industry insider I spoke with told me that he’s seen credit card companies try to weasel out of claims for all sorts of reasons, so it’s very important to understand what you are covered for before you decide to rely solely on your credit card’s coverage.
Ask your credit card company for a copy of their rental insurance policy and familiarize yourself with what it actually covers. Even cards from the same company can vary widely in terms of coverage.
Premium Protection from American Express
American Express offers an interesting product in the form of Premium Car Rental Protection for existing Amex cardholders. The way it works is that once you opt-in for this coverage, your Amex card is automatically charged a flat $24.95 each time you rent ($17.95 for California residents). Unlike typical credit card coverage, this is primary coverage, which means that it kicks in before your personal auto insurance policy. There’s no deductible to pay, and coverage limits are much higher than a typical credit card policy. Most vehicles are covered, and you can be covered for up to 42 consecutive days for that single $24.95 fee.
This coverage can be a great idea if you don’t have a personal insurance policy and want to be better protected than what your standard credit card offers. Even if you do have a personal policy, it will provide an extra measure of protection and keep your insurance company out of the loop should something happen.
On any rental of more than two days, you’ll probably come out ahead financially vs. buying LDW from the rental company, since they will charge per day for insurance, while Amex’s Premium Protection is a single fee for the length of the rental.
What About Liability?
The discussion above has focused on coverage for damage on your rental vehicle so far, but what about the unfortunate situation where you damage someone else’s vehicle or property, or injure someone? That’s where liability comes into play. Rental companies are required by law (except in California) to provide state –mandated minimums for liability coverage in the basic rate. While the state minimums may cover most fender benders, in a serious accident you may be sued for more than you’re covered for.
Of course, the rental companies have an answer for this as well in the form of Supplemental Liability Coverage (SLI or SLP). For a per day fee, SLI will supplement the state mandated coverage provided by the rental company, typically up to $1 million. Your own personal auto coverage will be on top of what the rental company offers as standard, so SLI may not be necessary, but if you don’t have a personal auto policy, or you want the extra protection, then SLI may make sense for you.
Note that no credit cards offered in the U.S. include liability coverage.
The Easy (and Expensive) Way Out
While it's no secret that over-the-counter rental coverage is completely overpriced, it does serve a purpose. If you do have an accident, and you’ve opted for the rental company’s Loss/Collision Damage Waiver (LDW/CDW), then the car rental company will waive any repair costs if the rental car is damaged or stolen, provided the car is not driven recklessly or driven by an unauthorized driver.
There is certainly some peace of mind that comes with handing the keys back to the agent at the end of your rental, and not worrying about insurance deductibles, submitting claims to third parties, or getting stuck in the middle when the there’s a dispute.
Be Prepared
Standing at the rental counter on the receiving end of the hard sell on insurance is not the time to think about whether you have the coverage you need. Find out ahead of time what your personal auto insurance and/or credit card covers you for. All coverage is not created equal. Taking the insurance offered by the rental company will provide peace of mind and a minimum of hassle should something happen, but it will come at a price.
Jonathan Weinberg is the founder and CEO of AutoSlash.com, a website that automatically applies discounts, and re-books your rental if rates drop.
Last edited by lonestar on Thu Jan 26, 2012 1:07 pm, edited 4 times in total.
Re: Do you purchase Damage Waiver when renting a car?
It might not be worth it..but if you have the extra money to pay for it, then there's no harm in purchasing it. You never know, it might prove useful in a certain situation you'll encounter.
-
mightyquinn
- Insurance Journal Addict
- Posts: 61
- Joined: Fri May 09, 2008 1:04 pm
Re: Do you purchase Damage Waiver when renting a car?
If I'm traveling and will be driving quite a bit in an urban area with which I am not familiar and the weather is or is projected to be wet/icy, you better believe that I will buy the CDW.
________________________________
"Free" ain't free
"Free" ain't free