Declining collision damage waiver?

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nisiprius
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Declining collision damage waiver?

Post by nisiprius » Sat Jan 16, 2010 12:03 pm

Here's a meta-question, since I know the answer is likely to vary from state to state and policy to policy.

For about ten years now, my wife and I have felt that we are not getting a straight answer from our insurance agent to this question: "Is it OK to decline the collision damage waiver (CDW) when we rent a car? Does our car insurance cover us?" We get an ambiguous answer. My feeling is that they would just as soon that people opted for the CDW, perhaps because it is complicated to deal with claims on rental cars or something.

So, the meta-question. What do we need to be asking? If it's not as simple as "you're covered just the same as if it were your own car," how can we phrase the question so that we will get a real, detailed answer? What are the likely sorts of issues that might be involved?
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Post by LadyGeek » Sat Jan 16, 2010 12:11 pm

Consider that your credit card may also provide coverage. VISA has a good list of questions: Auto Rental Collision Damage Waiver - Personal

You could also try searching for "collision damage waiver" or "loss damage waiver" on the car rental sites.
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Post by renter » Sat Jan 16, 2010 12:26 pm

How about, I'm planning to rent a car. What, if anything, does my existing policy NOT cover me for on the rental?

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Post by tibbitts » Sat Jan 16, 2010 2:38 pm

I don't think you ever get detail answers to "what-if" questions from insurance agents, and if you did, I don't think the answer would be binding, so it probably doesn't matter. You have to just read the policy and decide for yourself. Same with credit card coverage. Some cover collision, some cover other damages but not others. For example, some will cover you if the car is stolen, but maybe not if just part of the car is stolen. Nobody can afford to pay the LDW, but there is probably nothing that will cover as much or as conveniently.

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Re: Declining collision damage waiver?

Post by Sammy_M » Sat Jan 16, 2010 2:49 pm

nisiprius wrote:Here's a meta-question, since I know the answer is likely to vary from state to state and policy to policy.

For about ten years now, my wife and I have felt that we are not getting a straight answer from our insurance agent to this question: "Is it OK to decline the collision damage waiver (CDW) when we rent a car? Does our car insurance cover us?" We get an ambiguous answer. My feeling is that they would just as soon that people opted for the CDW, perhaps because it is complicated to deal with claims on rental cars or something.

So, the meta-question. What do we need to be asking? If it's not as simple as "you're covered just the same as if it were your own car," how can we phrase the question so that we will get a real, detailed answer? What are the likely sorts of issues that might be involved?
Mr./Mrs. Insurance Agent:

If I pass on the CDW,

Am I covered for any loss of use charges assessed by the rental car company?

Am I covered for any diminished value of the rental vehicle even after it is repaired?

Btw, rental agreements commonly make you responsible for the above, and the answer to both questions is very likely no from your insurer. I personally chose to self-insure these exposures, but I do so knowingly.

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Post by tfb » Sat Jan 16, 2010 3:04 pm

tibbitts wrote:I don't think you ever get detail answers to "what-if" questions from insurance agents, and if you did, I don't think the answer would be binding, so it probably doesn't matter. You have to just read the policy and decide for yourself. Same with credit card coverage.
I agree. Read the policy. The policy defines when a vehicle is covered and what's covered. If it's not in the policy, it's not covered.
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Post by northend » Sat Jan 16, 2010 4:19 pm

The trouble with reading my auto policy is that they use the words "regular use" in determining whether or not I'm covered.

So what the heck does regular use mean? The policy doesn't define it.

If I rent a car for one week, is that regular use? How about two weeks, three weeks and so on?

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cdw

Post by JerryB » Sat Jan 16, 2010 5:36 pm

The question isn't so much the coverage, it is what do you have to go through if you do damage the car. With CDW, you walk away. Without, how much red tape is involved? I don't know and I don't want to find out the hard way.

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Post by Downeastah » Sat Jan 16, 2010 10:56 pm

I was on a business trip two years ago with a rental and had a minor accident. I declined the coverage from the rental company and American Express took care of everything for me.
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Post by dbr » Sun Jan 17, 2010 12:00 pm

SurgPath wrote:I was on a business trip two years ago with a rental and had a minor accident. I declined the coverage from the rental company and American Express took care of everything for me.
Megacorp requires the CDW be declined and self insures the consequences. I have had colleagues walk away from some significant losses.

What is tricky is CDW when using the company rate for personal travel, which is an authorized perk of the plan. Apparently Megacorp still covers, but the rental agency wanted to convince me that was not so.

My insurance company has stated in the past that they cover damage but not loss of use. I think this may have been changed or else the person who said so, not a company rep, is mistaken.

It is very helpful to be able to walk away from any amount of damage no questions asked with the CDW (provided you didn't violate some term of the rental agreement).

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cdw

Post by JerryB » Sun Jan 17, 2010 1:28 pm

Good to hear Amex paid. How did your claim work? Did Amex pay the rental company directly for the damage and loss of use? How much paperwork on your part? Did your own auto insurance get involved? My understanding is that credit card coverage is secondary insurance.

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Re: cdw

Post by tibbitts » Sun Jan 17, 2010 1:34 pm

JerryB wrote:Good to hear Amex paid. How did your claim work? Did Amex pay the rental company directly for the damage and loss of use? How much paperwork on your part? Did your own auto insurance get involved? My understanding is that credit card coverage is secondary insurance.
Years ago I had a collision in Canada and I never heard from National after filling out the forms. I had used Diners Club which is always primary coverage. I don't have Diners Club now, but in any case if you rent for work and use a business card, the card is primary. If you're not renting for work, even a business card is secondary. Amex might be primary for personal use if you have some level of card, like Black or something.

Paul

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Post by RustyShackleford » Mon Jan 18, 2010 3:07 pm

LadyGeek wrote:Consider that your credit card may also provide coverage. VISA has a good list of questions: Auto Rental Collision Damage Waiver - Personal
I read the fine print on my VISA and discovered that it does not apply
to rentals of more than 2 weeks or so. Wish I'd read that before my
one-month rental out west a few years ago - but, no blood no foul.

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Re: cdw

Post by Downeastah » Mon Jan 18, 2010 3:18 pm

JerryB wrote:Good to hear Amex paid. How did your claim work? Did Amex pay the rental company directly for the damage and loss of use? How much paperwork on your part? Did your own auto insurance get involved? My understanding is that credit card coverage is secondary insurance.
I just called the # on the back of my Amex card following the accident, and they put me in contact with their insurance division. They took some info, and I just had to forward the claim forms from the rental agency. The rental company tried to incorporate some bogus "administrative fees" totaling $150. Amex challenged them on that part, and asked them for proof of those fees. The rental company ended up removing those fees from the claim, and Amex paid everything else.....around $800 in damages. My insurance company never got involved.
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Post by sharimac » Mon Jan 18, 2010 6:03 pm

Yes, if you decline the CDW and use a credit card for rental cars it works fine, just check for any exceptions in the fine print. In my case the coverage did not include trucks or vans and I had rented a truck to move some huge trees to a new property. The damage was not too bad and since I had used a local car dealer's rental business, I was able to negotiate the repair with another local small business.

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Post by kerry75 » Thu Jan 21, 2010 7:15 pm

I recently posted a reply to a similar question in this forum in which I reported that I had an almost new rental car stolen rather than simply damaged. I had not taken out the rental company's CDW when I rented it.

My own insurance company paid for it. From the language of the rental agreement it was obvious that in the event of theft even with CDW I was on the hook. My insurance company agreed and told me this language prevented potential thieves from renting cars and having their friends steal them.

My insurance company asked me a lot of questions in a fair manner and paid the claim promptly.

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Post by nisiprius » Tue Jan 26, 2010 2:41 pm

My agent said there were two things I should be aware of.

First, my policy coverage is limited to the actual value of my own car, so if the rental car is a fancier car (as it always is), damage to it could exceed the limit that would be covered.

Second, car insurance never covers loss of use, and she said you need to read the rental contract but it often says that you are liable for the cost of their loss of use while their car is being repaired.

I have not yet embarked on the task of trying to find out for sure whether the rental car protection provided by my Discover card covers these.
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Post by ryuns » Tue Jan 26, 2010 3:58 pm

nisiprius wrote:My agent said there were two things I should be aware of.

First, my policy coverage is limited to the actual value of my own car, so if the rental car is a fancier car (as it always is), damage to it could exceed the limit that would be covered.

Second, car insurance never covers loss of use, and she said you need to read the rental contract but it often says that you are liable for the cost of their loss of use while their car is being repaired.

I have not yet embarked on the task of trying to find out for sure whether the rental car protection provided by my Discover card covers these.
Definitely read the agreement. Anecdotally, from two people who used CC coverage to help pay for rental car damage, the CC happily forked out the money for the deductible for repairs, but did not cover loss of use. That was MasterCard and Visa, I believe.
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Post by Specialized » Tue Jan 26, 2010 7:33 pm

ryuns wrote:Definitely read the agreement. Anecdotally, from two people who used CC coverage to help pay for rental car damage, the CC happily forked out the money for the deductible for repairs, but did not cover loss of use. That was MasterCard and Visa, I believe.
Anyone have a sense of how much a week or two of lost use would cost? Is it that big of a risk to self-insure on that one?

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Post by nisiprius » Tue Jan 26, 2010 8:12 pm

Specialized wrote:Anyone have a sense of how much a week or two of lost use would cost? Is it that big of a risk to self-insure on that one?
Yeah, I've been wondering that myself. Logically, you'd think would be the cost of a couple of weeks of car rentals--that is, the revenue that the rental company had to forego while it was in the shop. Which would not be so terrible.

Actually that would be an upper bound, because they might not always have 100.00000% of the cars rented, and when they rent a car, their revenue isn't 100% profit--the miles put on the car reduce its value, it needs to be cleaned after every rental, etc.

Hmmm... it cost this travel writer $282.32 in administrative fees and loss of use. An interesting and troublesome article...

Aha. My wife says a friend of hers hit a deer with a rental car, and they in fact did exactly what I'd have supposed: charged the car rental rate for the number of days the car was in the shop.
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Post by tetractys » Tue Jan 26, 2010 10:40 pm

LadyGeek wrote:Consider that your credit card may also provide coverage. VISA has a good list of questions: Auto Rental Collision Damage Waiver - Personal
Yes, often rental car liabilities are covered by the credit card you use. Nevertheless the car rental salesperson will still try to convince you to payout for redundant insurance. So you should also check to see what exactly is covered by your credit card issuer. -- Tet
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Post by bobbyrx » Tue Jan 26, 2010 11:51 pm

I used to decline both collision damage and personal liability. I generally rent cars once/twice a year in Colorado. One year, before I arrived, severe hailstorms damaged numerous autos, so I started accepting collision insurance since I read an article that stated that rental companies were examining car returns much more closely looking to "enhance" income.

However, this brings up a second issue. Is liabilty insurance from your own auto insurer more ironclad than collision coverage? A gap there could have much more serious ramifications.

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Post by Sammy_M » Wed Jan 27, 2010 8:37 am

bobbyrx wrote:Is liabilty insurance from your own auto insurer more ironclad than collision coverage? A gap there could have much more serious ramifications.
While it is always wise to read the actual policy, I have found that the liability protection afforded by personal auto policies is pretty solid and there is no reason to buy liability coverage from rental companies if you have personal coverage. If you don't have a personal auto policy, don't assume you're covered via a commercial auto policy without verifying you have "hired auto" liability coverage, and even then it is limited to business purposes (and it's generally best to rent in the company's name).

Comp/collision coverage is automatically provided for hired autos within the standard personal auto policy (in the states I have reviewed), but it is of course subject to the deductible. On a commercial auto policy, you again would have to check whether comp/collision coverage has been added for hired autos (generally not unless requested).

Where you have a gap with insurance is on the loss of use and 'diminished value' charges that are assumed under rental agreements. Your personal auto policy likely doesn't provide anything there. Your credit card might cover loss of use (see Visa link from LadyGeek above), but I don't see where they would pick up diminished value charges if imposed (i.e., the value of the vehicle even after repair is not what it was prior to the accident). The loss damage waiver may be the only way to cover this exposure.

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Post by Redbelly » Wed Jan 27, 2010 8:54 am

I got bumped from the rear in a Hertz rental car and the rear bumper fascia was damaged. I got a police report and shared all the information with Hertz. They agreed that I was clearly not at fault and that they'd go after the person that hit me. A couple weeks later I got a bill from Hertz for the repair - it was obvious they had made no effort to collect from the other party's insurance.

In the end I had to file a claim against the other party's insurance company and agree to have them pay Hertz directly. As a side note, Hertz charged them for repainting both front and rear bumpers which was a minor ripoff, but I decided to back out when I had the chance. In fact, now I wish I'd never fessed up, as the check in kid would not have noticed the damage.

Good info in the linked article that VISA is more likely to pay the loss of use fee than other cards.

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Post by Sammy_M » Wed Jan 27, 2010 10:18 am

here is a good comparison. i'll be paying for rentals with my visa now.
http://www.creditcards.com/credit-card- ... 8090#chart
Visa provides rental auto insurance to all cardholders as a free benefit. American Express offers it on all cards except the Delta Skymiles Options card; a paid upgrade to premium insurance is available too. Discover and MasterCard offer rental auto insurance only to cardholders at more elite levels, such as gold or platinum (in other words, those with better credit).Discover is the only issuer that doesn't offer loss-of-use coverage.
obviously best to verify

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Post by nisiprius » Wed Jan 27, 2010 12:09 pm

Sammy_M wrote:here is a good comparison. i'll be paying for rentals with my visa now.
http://www.creditcards.com/credit-card- ... 8090#chart
Visa provides rental auto insurance to all cardholders as a free benefit. American Express offers it on all cards except the Delta Skymiles Options card; a paid upgrade to premium insurance is available too. Discover and MasterCard offer rental auto insurance only to cardholders at more elite levels, such as gold or platinum (in other words, those with better credit).Discover is the only issuer that doesn't offer loss-of-use coverage.
obviously best to verify
I don't believe what dummies we've been. This appears to be correct, and a VISA rep at 800-348-8472 told me that my card has the benefit; that not all VISA cards offer the benefit; that the benefit is identical for any card that offers it; and that the current benefit details are best obtained from VISA's own website, http://www.visa.com/benefits , specifically Auto Rental Collision Damage Waiver.

We got a Discover Open Road card for the gas purchase cashback but also for their auto rental collision damage waiver benefit, which they pitched strongly. The gas purchase cashback has been reduced to uselessness, but we've hung onto the Discover card because of the auto rental benefit.

We had a better benefit all along with the old VISA card we've had for a decade! The differences are that indeed Discover does not cover loss of use and VISA does, and, probably not very important, but Discover has a $25,000 cap on the benefit and VISA does not.

VISA's rep says they do not cover "diminished value" by the way.
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Post by JordanIB » Wed Jan 27, 2010 1:37 pm

I believe card issuers claiming to cover loss of use can be misleading. My experience (solely from surfing the internet and reading stories) is that the process usually goes like this:

- Card holder/renter has accident.
- Rental company claims damages including repair, loss of use, and administrative fees.
- Card issuers refuses bogus admin fees, pays repair charges, and requires fleet utilization records to prove loss of use.
- Rental company refuses to provide fleet utilization records.
- Card issuer does not attempt to follow-up to receive utilization records since they are aware no rental company ever sends them.
- Card holder winds up on the hook for loss of use charges.

Someone with actual first-hand experience may be in a better position to explain, but this is what I've read in doing my own research on the "Decline rental car insurance?" question.

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Post by nisiprius » Wed Jan 27, 2010 1:51 pm

JordanIB wrote:I believe card issuers claiming to cover loss of use can be misleading. My experience (solely from surfing the internet and reading stories) is that the process usually goes like this:

- Card holder/renter has accident.
- Rental company claims damages including repair, loss of use, and administrative fees.
- Card issuers refuses bogus admin fees, pays repair charges, and requires fleet utilization records to prove loss of use.
- Rental company refuses to provide fleet utilization records.
- Card issuer does not attempt to follow-up to receive utilization records since they are aware no rental company ever sends them.
- Card holder winds up on the hook for loss of use charges.

Someone with actual first-hand experience may be in a better position to explain, but this is what I've read in doing my own research on the "Decline rental car insurance?" question.
Why couldn't the story end:
--Card holder calls credit card company and disputes loss of use charges
--Credit card company credits account and charges back the rental company?

I'm sure it doesn't work that way, but why not?
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Post by Chip » Wed Jan 27, 2010 2:07 pm

Someone with actual first-hand experience may be in a better position to explain, but this is what I've read in doing my own research on the "Decline rental car insurance?" question.
Okay. I have first hand experience, though it is from several years ago. Credit card insurance (Visa Platinum) covered all repairs, as well as loss of use charges. There was no attempt by the rental company to recover any sort of diminished value loss. YMMV.

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Post by tfb » Wed Jan 27, 2010 5:40 pm

nisiprius wrote:Why couldn't the story end:
--Card holder calls credit card company and disputes loss of use charges
--Credit card company credits account and charges back the rental company?

I'm sure it doesn't work that way, but why not?
Because the rental agreement said the renter is responsible for loss of use and it does not require furnishing fleet utilization records?
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Post by Sammy_M » Wed Jan 27, 2010 7:19 pm

tfb wrote:
nisiprius wrote:Why couldn't the story end:
--Card holder calls credit card company and disputes loss of use charges
--Credit card company credits account and charges back the rental company?

I'm sure it doesn't work that way, but why not?
Because the rental agreement said the renter is responsible for loss of use and it does not require furnishing fleet utilization records?
does the rental agreement prescribe liquidated damages? loss of use. wouldn't it be implicit that such loss will be evidenced?

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