Rental Car Coverage- Business Auto Policy
Should I purchase the Loss Damage Waiver offered by the rental agent when I rent a vehicle while on company business, and instruct my employees to do the same?
This is a great question, and one that our customers ask frequently. When you or one of your employees rent a vehicle for business use while out of town, there comes that time when you’re standing at the rental car counter and the agent asks the inevitable question: “Do you want to buy our loss damage waiver (or our insurance coverage)?”
Most loss damage waiver (LDW) fees are outrageous. Sometimes they cost more than the daily rental fee itself. But are they worth the additional cost? The answer may depend on your tolerance for risk and inconvenience. You must decide if the extra cost is reasonable, considering the potential for an uninsured loss should something happen to the vehicle during the term of the rental contract, and the resulting inconvenience of dealing with the rental company and your insurance company - or perhaps even your employee’s insurance company - to satisfy the rental company’s demands.
First, you should know that the LDW is not actually an insurance policy. It is a waiver of the rental company’s requirement in the rental contract that the renter bring the vehicle back in the same condition as when it left their lot. Most rental contracts make the renter responsible for any damage to the vehicle, including theft and weather-related damage. When the renter purchases the LDW, the rental company is removing that provision from the contract on a conditional basis.