I have written a lot about buying the rental car loss damage waiver (LDW), but still the vast majority of internet and other articles tell people their insurance covers them so no need to buy the LDW. On a personal note, just recently I was involved in my first auto accident since 1968 (I may have a story to tell about my claim experience soon). My personal auto policy includes coverage for a rental car while my vehicle is being repaired. I asked the adjuster if I negotiated a rental rate that included the LDW that was within my daily coverage limit, would they pay for it. The answer was no and the adjuster went on to say that I didn’t need it since my policy extended to nonowned autos. When I advised that the LDW potentially covered a lot of things my policy doesn’t, I got the email equivalent of a blank stare. But this isn’t the story I wanted to share in this article. Back to the issue at hand….

Here is an account from David Thompson of the Florida Association of Insurance Agents from a couple of weeks ago demonstrating why buying the LDW can pay off…and he only had a cracked windshield, not a $5,000 diminished value charge, to contend with.

This past weekend I took my daughter, Leslie, on what I think was our 16th “father/daughter trip” in about the past 18-20 years. We’ve been from Alaska to Europe. This trip was a fast-paced and a somewhat short trip to Bryce Canyon and Zion National Parks; my fourth visit to each park, but her first. They rank as numbers three and four on my list of 21 of the 59 national parks I have visited.

A few days before the trip, I was swapping email with Chris Boggs of IIABA; he is the Executive Director of the Virtual University where I serve as one of his 50 or so volunteers. Chris and I swap numerous emails each day discussing various coverage issues, each of us sort of “trying to start a fight to prove the other wrong.” (I usually win! He will tell you that I only THINK  I win!)  I told Chris, “You’ll have a few days off without me pestering you; I’m taking my daughter out west and shutting down email.” He told me to have a good trip and I closed with, “Maybe I’ll come back with a good insurance story.” Chris’ reply was, “I’ll hold you to it.” Well, that is exactly what happened; so the whole dang thing is his fault!!

We flew into Las Vegas and picked up our rental car. (Chevy Equinox SUV; Leslie “has” to ride in a SUV, not a sedan!) After a few quick turns and a mile or so, we were on I-15 heading north towards Bryce Canyon National Park and then within a mile WHAM!!! A large stone flew up from the road as a car ahead of us drove over it. It sounded like someone took a baseball bat and hit the windshield! Right there in my line of sight was a quarter-sized rock hole; no doubt that was a full replacement and not a repair. I don’t think the rock had fallen to the road before Leslie said, “Good thing you bought the insurance, Dad.” See, she didn’t even have to ask, “Dad, did you buy the insurance?” Let’s just say that she knows me pretty well!

I asked Leslie (my navigator and Internet slave) to research the cost of a windshield for that vehicle. Several websites had the cost at about $400. Add to that the charges I’d expect the rental car firm to impose on me too; probably a charge for at least one day of loss of use and likely an administrative fee; I’ve seen those as high as $200. Plus, when returning the vehicle (at 4:30 a.m.) I would have had to fill out the incident report. Instead, for a mere $82.50 for the three-day rental I showed the damage to the Hertz agent as he checked me in. His response was simple, “You bought the damage waiver, you are smart…most are not. Here is your receipt, have a nice flight.”

Ironically, it was almost exactly eight years ago to the day that I rented a vehicle at the same airport and the exact same incident happened. It was the first time I was in a rental vehicle that was damaged. From 2010 to this past weekend makes the fourth time I have “dropped the keys and walked away.”

Bill Wilson (Founder of the Virtual University, recently retired from IIABA, now founder/CEO of InsuranceCommentary.com,and author of a great “Insurance Nerd” book When Words Collide: Resolving Insurance Coverage and Claims Disputes) has a similar horror story of a rental in Phoenix. We both teach about this issue and both get amused at the amount of misinformation there is out there about how the loss damage waiver is a waste of money. I sent Bill a text photo of the car and rental contract. His “tongue-in-cheek” reply was, “Sucker, don’t you know the LDW is a rip-off and your auto policy gives you full coverage.” After all, read almost any article about LDW on the Internet (sadly, a few from somewhat well respected insurance organizations) and that’s the message they send.

The trip was very long and tiring, but a lot of fun. The weather was perfect, albeit a little hot (105 degrees), and we both got back safely. My daughter can “hang with the old man” too. She will tell you that SHE had to wait on ME as we hiked the Angels Landing Trail in Zion; that’s up for debate in my book!

See the photos of the “evidence” on the car damage, plus Leslie and me on the Angels Landing Trail. No, we didn’t go to the top, just maybe 300 feet  of the way up the last half mile. Near the top the trail is 28 inches wide and a sheer drop 1,200 feet to the canyon below. See this link, but not if you have a fear of heights!

I think of the LDW this way: Airfare was expensive for our trip. Add that cost, plus two nights in national parks lodges, food, and incidentals and the cost around $2,400 for the four-day trip for two. If I can afford to take that quick vacation, I can easily afford $82.50 for LDW. That purchase sure made the trip a lot less stressful at the end.

Four times in eight years of “drop the keys and walk away.” I’m a believer in the LDW, are you?

Do YOU buy the LDW? Do you recommend to your customers that they buy it? What’s your E&O policy deductible?

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Bill Wilson

Founder at InsuranceCommentary.com
One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America. Reprint Request Information