Declining rental car damage waiver potentially risky

Many travelers who rent cars decline the damage waiver offered by rental car companies because they believe that their own automobile policies will provide adequate cover when they use a rented vehicle.

“But, even if your policy includes rentals, there may be costs it doesn’t cover,” warns Bill Wilson, CPCU, who is the director of the Virtual University of the Independent Insurance Agents & Brokers of America. “For example, the rental company may well use a more expensive way of calculating vehicle damage than your auto policy and you might be stuck paying the difference.”

Most policies also allow the insurance company to inspect a vehicle and appraise damage before authorizing repair or disposal of the vehicle. Rental car companies are not bound by this procedure, however, and may wish to move more quickly with returning the car to service or disposing of it – which can affect whether or not the renter will be covered.

It’s also possible that the rental company might require immediate payment for any damage by using the renter’s credit card surcharge, which can “max out” a card’s credit limit.

Most automobile policies also cover the loss of income to the rental company, the actual “loss of use” calculation could be hundreds of dollars above the renter’s policy limits. Furthermore, the rental agreement might make the renter responsible for “administrative” charges, such as appraisal, storage and towing, which are normally not covered by automobile policies.

www.iiaba.net