Rental Car and the car damage waiver insurance plan

Recently, I started going on personal trips in various States and each time I had to rent a car.

Renting a car means that not only you pay a daily rental rate for the car but are also offered to buy an optional LDW (Loss/Damage/Collision Waiver insurance plan aka LDW / CDW).

The LDW costs from $9 to $30 dollars a day. That could be the same rate as the car rental itself, thus you are paying double the price to rent a car.

So the question is, what are your options to save money and should you?

There are two answers to this question and each with its cons and pros.

Not buying the LDW

If you don’t buy the LDW, then you may be relying on two things:

  • Your primary insurance coverage
    • Call your insurance company and ask about the coverage rules.
    • There could be a 500$ deductible and an increase on your yearly premium fees
  • Your credit card company coverage
    • Some credit card companies offer coverage (Visa, AMEX, etc…)
    • Check with your CC company what is the extent of the coverage

Bottom line, if an accident happen, you may be still liable if either of the insurances you have fail you because of some hidden close you failed to read.

If you don’t have insurance it could be a disaster if an accident happen because the rental company will charge you for:

  • Loss of use: daily rate while the car is out of operation (being repaired for instance)
  • Towing
  • Their repair fees
  • Administrative fees
  • Diminishing value claims
  • etc….

This blog post is interesting and more detailed:

Buying the LDW

If you choose to pay up to $30/day for the LDW provided by the rental company then you are buying peace of mind at a relatively high cost.

Beware that, if an accident happens and you are at fault then the LDW may become void. Check with the rental company.

On the positive side, if you buy the insurance and you’re not at fault then you are relieved from all the expenses.

Check this site that discusses Top 10 reasons to buy Rental Car Damage Waiver

Bottom line

I personally still but the LDW most of the times especially when:

  • I am traveling to new locations and have to do lots of driving around
  • Renting a car that I am not accustomed to driving (say a big car, a truck for moving furniture, etc…)
  • When it is a short rental period: buying the peace of mind is worth it

This site also shows the cons and pros with lots of interesting user comments:

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