The eternal question do I need to purchase rental insurance or a loss damage waiver when renting a car? And the answer is absolutely YES! If your gut feeling is to save money and rely on your auto insurance or credit card coverage, ignore it. You could be creating a coverage gap of thousands of dollars. Although the usually astronomical cost that can easily surpass the rental cost itself, there are numerous reasons why it is a good idea for nearly all consumers to buy the loss damage or collision waiver. It is possible for the rental company to contractually charge the renter for various indirect expenses that are ordinarily not covered by auto policies or are covered for only small amounts. The most outrageous is “diminished value.”
The main issue with claims such as diminished value is that there is little to no coverage for most policies. The amount of diminution is more or less subjective and not exact unless the vehicle is sold. If the rental vehicle is repaired and placed back into service, then there has been no tangible loss of value until it is retired and sold. There have been cases where rental car companies have charged consumers thousands for diminished value. One horror story was a $15,000 credit card assessment on a luxury SUV rental. In another case a customer had to not only pay for the diminished value but also for the addition of traveling to another state in order to appear in court to respond to a suit brought by the rental company. Despite the fact that courts have generally upheld the ability of insurers to exclude diminished value claims under physical damage coverage, in general diminished value can be claimed on a liability basis such as that under a car rental agreement.
So even though the next time you rent a car and see the outrageous charge that is rental insurance, take it! The peace of mind and protection it provides is well worth it. |
