So you’re going on vacation and renting a car. The rental car company offers you the “damage waiver” for an additional charge. Do you need it?
I wish I could just answer yes or no, but it really isn’t that simple.
First of all, we are assuming you are in the United States or Canada. If you are not in one of those two places, we STRONGLY recommend not renting the car at all because your insurance probably doesn’t cover you at all. It could if you have a personal umbrella, but even that is not a sure thing.
If you have comprehensive and collision coverage on at least one vehicle on your personal auto policy, we will cover a normal, short-term car that you rent just as if it was your own car. So if you have a $1,000 deductible on your collision, and you wreck your rental car, we will fix the car and you will have a $1,000 deductible to pay.
So what’s the problem?
There are some things a rental car company may want you to pay, that your insurance wouldn’t pay because the charges wouldn’t apply to a vehicle you own.
- Loss of Rents – This means the rental company could have rented the car for $30 a day, but it was disabled for 10 days till they fixed it. They may charge you $300 for the rent they could have collected. Now before you just pay the bill, ask them to prove that all their cars of that size category were all rented during that time period. If they had cars available to rent, then you don’t owe them for the loss of rents, because they didn’t actually lose any rents.
- Diminution of Value – This means when they resell the car you rented they will get less for it because it was wrecked. This you will probably owe for, and it could be substantial. If they could have resold the car for $18,000 but now they can only sell it for $14,000 they can charge you for the $4,000. Ouch!
- Administrative Fees – The rental car company had to pay an employee to organize getting the car fixed etc.
So what is the bottom line? I would buy the collision waiver most of the time. Just pay a little more, and enjoy your vacation!
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