Since COVID-19 many of us have not traveled, nor had to rent a car.
Collision Damage Waiver
When you rented a car last, did you take time to read the rental agreement? What insurance coverage do you need? Are you aware that a rental car firm can charge you $25 a day for the Loss Damage Wavier? Is it really worth the cost?
How many times have you rented a car in the last year? Have you ever rented something big, like a motor-home or extra-large car or van? How about a box truck when you moved from one place to another? For the occasional renter, purchase the Collision Damage Waiver.
Read The Fine Print
All rental car contracts are a little different. There is no standard contract; some provide more coverage than others. In my experience, it is wise to use the same company and take time to read the contract. A good rule of thumb, whether you read the contract or not, is to purchase the Collison Damage Waiver.
Rental Car Basics
Let's start with who can drive the car.
- You
- Anyone on the contract
- Anyone authorized under your Rental Car profile (typically a fellow employee, spouse or significant other)
- Valet parking attendant
- Anyone else in an defined emergency .
- All operators must be 25 years of age or older.
- All operators must have a valid driver's license.
Reading the fine print of the contract is necessary, as some of the drivers mentioned above may be excluded. Sometimes the valet services, kids and family can be excluded. Coverage on the rental car contract can be restrictive.
Prohibited Uses
Were you aware there are some prohibited uses of a rental car? Let's explore a few common uses.
- Operation by a non-authorized driver
- Use outside of the United States
- Failure to use seat belts or child seats
- Use off paved or on unpaved roads
- Leaving the keys in the car
- Failing to lock and close all doors
- Use while intoxicated or on drugs
- Use in any type of crime, including having drugs in car
- To tow or push anything
- Racing or speed contests
- In drivers training courses
- Use while over loaded
- Carrying anything on top of the vehicle
- Storing explosives (example, fireworks) or corrosives in the car
Many of these make common sense, however, there is a reason that they are spelled out -- someone has tried these while renting a vehicle!
Damage to the Rented Vehicle
You are responsible for any damage to the vehicle; you are responsible for any kind of damage from any cause.
What is the total tab for damages?
- Responsibility limited to "retail fair market value" less salvage.
- + towing and storage
- + administrative fee, not disclosed at time of rental
- + "reasonable charges for loss of use" fee
- + pro-rata license plate fee.
As you can see, the tab can be quite costly!
Then you have a rental car of diminished value because it was damaged. Be aware Diminished Value varies by state. What about your own Personal Auto Policy? Won't there be protection for you there? Does your Personal Auto Policy cover Diminished Value? Not unless it specifically states that in an endorsement added to your policy. Without this endorsement, you will pay for all loss or damage to the rental car, regardless of the cause. Now the $25 per day for the Collision Damage Waiver does not sound so bad, does it?
Coverage Offered Under the Collision Damage Waiver
For $25.00 a day, you are subject to:
- Liability and Uninsured Motorists (for injuries and property damage) - usually to a limit of $1,000,000
- Personal Accident coverage - $175,000 per person
- $2,500 Medical Payments
- Personal effects (Luggage, etc.) $600 per person to $1,800 depending on the Rental Car firm.
If you do buy the coverage remember: Use of the car in any prohibited manner will void the Loss Damage Waiver and cause you to be responsible for the loss or damage to the car. Remember the prohibited uses, non-authorized driver, off paved roads, driving under the influence, failure to remove keys and even failure to lock the car could void the Collision Damage Waiver.
Bottom line, the Collision Damage Waiver is expensive. Consider the "hassle" factor, but it may be worth paying the fee. I always buy the coverage.