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Loss
Damage Waiver
Q:
What is it?
A: The optional Loss Damage Waiver (LDW) offered by car rental companies
is not insurance. It's an option that reduces renters of financial
responsibility if the car is damaged or stolen while under rental
contract. Using the vehicle in violation of any of the use restrictions
listed on the rental agreement could void LDW and leave the renter
fully responsible for any damage to the vehicle.
Q: What if I decline LDW?
A: If you decline LDW you may be responsible for up to the full fair
market value of the car if it is damaged, vandalized or stolen during
the rental. You may also be responsible for reimbursing the car rental
company for the revenue lost by not being able to use the car while
it is being repaired or not recovered due to theft (loss of use).
Q: Who needs it?
A: When renting for business, check with your corporate travel manager
to see if the company provides coverage in the event of loss.
If you're renting for personal reasons, check your own automobile
insurance policy before you pick up your rental car. Many policies
do cover rental cars, but even if a renter has personal automobile
insurance, he or she may not be totally protected.
For example, if you decline LDW and rely on your own insurance, you
probably would be responsible for paying your usual deductible. Also,
loss of use fees are not normally covered by personal auto insurance
policies. And, personal auto policies that extend collision coverage
to a rental car may only provide a coverage limit equal to the value
of the vehicle scheduled on the policy.
If the value of the renter's personal auto is less than that of the
rental vehicle, the renter could still have some damage responsibility.
Finally, if you don't own a car and don't have automobile insurance,
you should consider accepting Loss Damage Waiver.
Q: Won't my credit card cover
it?
A: Some credit card companies offer protection if you present their
card at the time of rental and use the same card to pay for your rental
at the time of return. Renters should examine closely the terms of
this coverage as the protection is often supplemental and certain
limitations or restrictions may apply.
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Cars
