CDW insurance?

[jaff87]

I am covered through our normal insurance policy, but am debating whether or not to take out the CDW offered through the rental car agencies. What do most of you do when you rent and why?

Thanks!

 

[U2_rocks!]

I always take CDW (LDW) and the SLI.

CDW takes away your liability completely - from a scratch that someone else made while you were parked, all the way up to a total write-off of the rental car. It is technically not insurance - it's a waiver of liability. If you are covered under your regular insurance policy, you need to know what your deductible would be in the event of a claim, and if there are any situations that your insurance wouldn't cover. Then you need to think about the hassle involved in dealing with any possible claim, and the amount your premium might go up at renewal as a result of your claim. I pay for CDW (even though I can get insured through my credit card) b/c I don't want to deal with the hassle of a claim, and I don't want to be out of pocket in a foreign country (I don't live in the US). I also don't want to have to come back to the US to deal with something long after my trip is over. With CDW I can just walk away.

I get SLI b/c where I'm from we don't need large liability coverage, so I don't have it. I need to protect myself in case I injure someone else in an accident and get sued for medical costs etc. I know those numbers can get large in the US, and I feel the need for that protection. If you live here and have other liability coverage, you likely don't need it.

 

[jaff87]

I always take CDW (LDW) and the SLI.

CDW takes away your liability completely - from a scratch that someone else made while you were parked, all the way up to a total write-off of the rental car. It is technically not insurance - it's a waiver of liability. If you are covered under your regular insurance policy, you need to know what your deductible would be in the event of a claim, and if there are any situations that your insurance wouldn't cover. Then you need to think about the hassle involved in dealing with any possible claim, and the amount your premium might go up at renewal as a result of your claim. I pay for CDW (even though I can get insured through my credit card) b/c I don't want to deal with the hassle of a claim, and I don't want to be out of pocket in a foreign country (I don't live in the US). I also don't want to have to come back to the US to deal with something long after my trip is over. With CDW I can just walk away.

I get SLI b/c where I'm from we don't need large liability coverage, so I don't have it. I need to protect myself in case I injure someone else in an accident and get sued for medical costs etc. I know those numbers can get large in the US, and I feel the need for that protection. If you live here and have other liability coverage, you likely don't need it.

Thank you for your advice. Your information is exactly what I was looking for as far as reasons you should take it out. While the chances are in your favor of not having an accident, I saw so many people when I was there stopping dead in the left lane of regular street traffic because they needed to get into the right lane to make their turn. We actually had one car in front of us who literally crossed over 3 lanes of traffic to get to where they needed to be, wife was pointing in one direction, husband in the other direction, kids in the car and neither one of them even thought to look behind them to see what havoc their indecisions were causing!

 

[U2_rocks!]

Adding CDW makes our car rentals so much more expensive, but I'd be too nervous if I didn't have it. It's just too risky for ME. And remember it's not just those unlikely accidents you have to worry about - it's any damage at all, including scratches and dings that might end up there without your knowledge (like, when you were parked and away from the vehicle). And if you have CDW you don't have to inspect your car thoroughly before you leave the lot in case you get blamed for someone else's dent - you won't be held responsible at all.

Yeah it's a ton of money, but for me it's worth it for my piece of mind!

 

[delilah]

We purchase the CDW for the reason I had descibed in an earlier post. To summarize, we rented a car in Ft. Myers one evening. The next morning, I noticed a little asymmetry on the bumper skirt while the car was parked head-in at the hotel where we were staying. There was no paint, just the bumper skirt pushed in a little on one side. In the dark, and since at the time we had an infant son, we hadn't made note of all the damage, however insignificant to the car before we took it off the lot. We got a letter about two months later asking us about the "accident" the car had been in, and of course, asking for our insurance information to pay. My brother, who is an attorney, told us to say we had no accident, which is true, since somebody later may have had a significant accident with the car, and then tried to blame it on us. From then on, we have purchased the CDW, since it is less than the deductible on our private insurance. An interesting side issue is that my employer will not pay for the CDW when I rent a car on business. Now we always purchase the CDW and always are real PITAS about pointing out every little scratch or dent on a car we rent.

 

[jaff87]

We purchase the CDW for the reason I had descibed in an earlier post. To summarize, we rented a car in Ft. Myers one evening. The next morning, I noticed a little asymmetry on the bumper skirt while the car was parked head-in at the hotel where we were staying. There was no paint, just the bumper skirt pushed in a little on one side. In the dark, and since at the time we had an infant son, we hadn't made note of all the damage, however insignificant to the car before we took it off the lot. We got a letter about two months later asking us about the "accident" the car had been in, and of course, asking for our insurance information to pay. My brother, who is an attorney, told us to say we had no accident, which is true, since somebody later may have had a significant accident with the car, and then tried to blame it on us. From then on, we have purchased the CDW, since it is less than the deductible on our private insurance. An interesting side issue is that my employer will not pay for the CDW when I rent a car on business. Now we always purchase the CDW and always are real PITAS about pointing out every little scratch or dent on a car we rent.

The extra cost will be hard to swallow, but one that I think is well worth doing. Just out of curiosity, how did you end up making out with that issue in Ft. Myers?

 

[KINGBOBOFTHENORTH]

I'm in the insurance industry and I have to tell you (and of course this is just my opinion), CDW is a complete waste of your money. It's a huge moneymaker for the rental car companies...at your expense...and it probably doubles your cost of renting. Here's why I think this way:

1) If you have Collision/Comp on your personal auto policy, it will cover you driving a non-owned auto with the permission of the owner. And that's what a rental car is. Check with your agent to verify this. Make sure you declare anyone else that's going to drive besides the renter because if you don't, then you have a driver that does not have the owner's permission.

2) So you might say ok, but I've got a $500 or $1000 deductible on my collision coverage. And I'd say that may be true, but if you trust yourself driving your own car 358 days per year with that deductible, why don't you trust yourself the 7 days you're on a trip with that deductible? There's no evidence that you're more likely to have an accident because you're in an unfamiliar car or unfamiliar location.

3) Most gold and platinum VISA, Mastercards and AMEX cards cover you while renting a car if you DECLINE the CDW/LDW and charge the entire rental to that charge card. Check your brochure or call your credit card company. Overseas it covers your rental car on a primary basis, in the U.S. and Canada it's secondary to your own insurance. So it covers your deductible.

4) So you say ok, but I don't want to report a claim to my insurance for damage to the rental car. I can understand that but my only response is the same as #2 above....you take that risk every day at home while driving your own car. Why be extra scared of the rental car getting damaged than your own car?

If something happens to you then you'll be glad you purchased the CDW/LDW. If nothing happens, you'll be glad you didn't. The odds of nothing happening are far greater than the odds of something happening. Each person must make their own decision. But if you're comfortable with the risk you face everyday at home, why be so much more adverse to risk when on a trip that you're willing to almost double the cost of renting?

BobK/Orlando

 

[ClarabelleCowFan]

The only positive side of purchasing the additional insurance is that you won't have to worry about the car rental agency coming after you for "loss of use" which is basically the daily rental rate of the vehicle that they can charge you from the time the vehicle is damaged until it is returned to their fleet and available for rental again. There is no regulation that specifies how long the rental car company can take to have a repair made and this "loss of use" fee is generally NOT covered by your insurance company.

My friend is an insurance agent and she has seen many instances where rental car agencies have sued and WON for the "loss of use" fees.

I agree with Bob - 99% of the time your insurance coverage is plenty and there is no need to buy the ridiculously pricey extra coverage from the rental car agency but it is that 1% of the time when something COULD go wrong that you need to weigh before you decide to decline the coverage.

When I travel on business I use my Amex Platinum so I always decline the coverage. When I travel on personal time I use a non-platinum Mastercard so I do purchase the additional coverage.

 

[U2_rocks!]

Do you have any idea how aggressively they would pursue the "loss of use" damages if the renter does not live in the US? If that fact would put them off, then maybe I will investigate and compare CDW vs not a little more closely. I do have a Gold Visa which covers it, but I'm not sure my local insurance would cover driving a rental car in the US (as the US is a foreign country). The CC would likely not cover "loss of use", so that's a big concern. However, if they are not likely to pursue it with foreigners, maybe it's worth taking the chance?

BTW: I'm worried about an accident as much as I'm worried about incidental damage that I might get blamed for. i.e. the car gets scraped by an unknown vehicle in a parking lot, or there was prior damage that I didn't notice. At home I might get my friend to repair it at a low cost, or I might not bother to repair it yet if it were minor - I'd simply add it to the list of minor stuff to fix before I eventually sell the car (there are savings to be had by fiing all your minor stuff one time instead of each time they occur). But with a rental car there is no choice about whether to fix it or not, and no choice about who fixes it (and at what price!). You also have no control over how long the car is out of commission (and therefore how much "loss of use" there is). At home I'd borrow my Mom's car and never have to worry about being out of commission and having a possible rental car expense.

How does everyone feel about these issues?

 

[KINGBOBOFTHENORTH]

Well, my previous post was directed to American travelers. You're quite right about your European insurance not covering you in the United States; look on the insurance green card to see where you're covered. A European would have a completely different set of considerations and CDW may indeed be a good idea.

Always inspect a rental car all the way around and on top when you first pick it up and make sure everything previously damaged is noted. Don't be afraid to be too picky. There are some rental car companies out there that make a lot of money gouging renters for old damage. If your rental company begins with the letter B, D or E, be even more careful.

BobK/Orlando

 

[manning]

Well, my previous post was directed to American travelers. You're quite right about your European insurance not covering you in the United States; look on the insurance green card to see where you're covered. A European would have a completely different set of considerations and CDW may indeed be a good idea.

Always inspect a rental car all the way around and on top when you first pick it up and make sure everything previously damaged is noted. Don't be afraid to be too picky. There are some rental car companies out there that make a lot of money gouging renters for old damage. If your rental company begins with the letter B, D or E, be even more careful.

BobK/Orlando

A and N get their licks in too!!!

I got rear ended last year and the other guy's insurance tried to stick me with E. Stuck to my guns and got H.

 

[KINGBOBOFTHENORTH]

H is good. E's cars are often kind of ratty & run-down looking.

 

[manning]

We'll have to keep on eye on H. Ford sold out their interest in it and the track record of the new owner(s) is unknown.

 

[manning]

I just got back from paying my auto insurance premium (State Farm). While there I brought up the subject of "loss of use". It got a little confusing and the agent had to call the home office and we are still a little confused. They think loss of use is covered on a rider for $32.00 for six months. I took it and will examine the paper work when it arrives in the mail. $32.00 won't break me and if it isn't what I'm after I just won't take it next time.

If it is for loss of use it will be a heck of a lot cheaper than $5.00 per day and liability and collision will be covered as primary on my Diners Club card.

The next time you drop in to see your agent bring the subject up.

 

[KINGBOBOFTHENORTH]

"Loss of Use" is a term used to describe something you might owe to a 3rd party because you damaged their car. For instance, if you rear-end someone and they are without their car for 8 days to get it fixed, the liability portion of your auto policy pays to fix their car and also pays for their loss of use....either putting them into a rental car or just paying them cash for the loss of their car use while it was out of commission. However, a car you rent for yourself is excluded under the liability portion of your policy and loss of use would not get paid there.

Repair cost for damage to a car you rented is paid for under your 1st party Collision coverage, subject to your deductible. I believe the coverage you just purchased is "Rental Reimbursement" coverage, an optional coverage that pays for a rental car for YOU while YOUR car needs repairs. While your collison coverage would pay to fix the rental car you damaged while using it, it's doubtful that your Rental Reimbursement coverage would pay for the "Loss of Revenue" claim the rental car company might have because you took their car out of commission for awhile. And that's not covered by your Collision coverage either.

This is my opinon and is based without having read the terms and conditions of your auto policy.

BobK/Orlando

 

[manning]

"Loss of Use" is a term used to describe something you might owe to a 3rd party because you damaged their car. For instance, if you rear-end someone and they are without their car for 8 days to get it fixed, the liability portion of your auto policy pays to fix their car and also pays for their loss of use....either putting them into a rental car or just paying them cash for the loss of their car use while it was out of commission. However, a car you rent for yourself is excluded under the liability portion of your policy and loss of use would not get paid there.

Repair cost for damage to a car you rented is paid for under your 1st party Collision coverage, subject to your deductible. I believe the coverage you just purchased is "Rental Reimbursement" coverage, an optional coverage that pays for a rental car for YOU while YOUR car needs repairs. While your collison coverage would pay to fix the rental car you damaged while using it, it's doubtful that your Rental Reimbursement coverage would pay for the "Loss of Revenue" claim the rental car company might have because you took their car out of commission for awhile. And that's not covered by your Collision coverage either.

This is my opinon and is based without having read the terms and conditions of your auto policy.

BobK/Orlando

There was some confusion about this at the State Farm office thus I was willing to pay the $32.00 to get the documents in hand to read the terms and conditions. If it is not what I want I can have it taken off the policy and get a pro-rated refund. I will get it clarified. The girl was somewhat confused and the party she called sounded somewhat confused.