Car rentals and loss damage waivers
Should you buy the loss damage waiver?
The Loss Damage Waiver (LDW) sold by car rental companies is sometimes seen as price gouging. At a typical $20/day rate, this “we won’t go after you with exorbitant charges” service can quickly add up.
Although the price can be high, some insurance agents recommend it. Here’s why:
- Your auto insurance may not cover rental cars.
- If your auto insurance extends to rentals, it may exclude some types of vehicles (SUVs).
- Accidents or damage to a rental car may be treated just like they happened to your car; you will incur the same deductible, paperwork, and possibly higher premiums as a result of the claim.
- Without LDW, rental car companies may add fees (administrative, loss-of-use) and charge for the diminished value of the vehicle.
- The rental company may charge damages to your credit card while waiting for reimbursement, which can potentially cost you more money by maxing it out or bringing on interest charges or other fees.
Before you rent a car or buy LDW, ask your insurance agent and credit card company for specific coverage details. You may already be covered, but it’ll pay to know exactly how much coverage you have.
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2 Responses to “Car rentals and loss damage waivers”
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Edward Says:
How can you tell what your coverage is with your auto insurance without calling your agent? Shouldn’t it be listed in your policy?
October 27th, 2009 at 3:10 pm -
Matt Says:
Yes, it should be listed in your policy. If you have Comprehensive and Collision coverage on your own car, this is what would be transferred to a rental car. So check those sections of your policy for details. But if there is any uncertainty, it may be best to get clarification from your agent or someone else at your insurance company.
October 29th, 2009 at 1:52 pm
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