Yes, I know I wrote about this a few months ago. The problem just will not go away, so I’m taking another shot. For years in E&O seminars, I always recommended to agents that they recommend to customers to buy the rental car loss damage waiver (LDW). I never did, though I knew the downsides to not buying it.

Then on a trip to Las Vegas, the Grand Canyon, and Phoenix, I rented a car and the LDW was only $9.95 a day, rather than 2-3 times that amount. I thought it was a good deal, so I bought it. The night before our 6:30 a.m. flight, we were at a Mexican restaurant and when I came out, I found that the entire back end of the rental car was smashed in, likely by some drunk or otherwise negligent person leaving the parking lot. The restaurant gave me a wire coat hanger and I was able to tie down the trunk which wouldn’t close.

The next morning, I simply returned the car, the attendant acknowledge the LDW, and we were on our way. No discussions, no paperwork, no insurance claim filing, no credit card charges (particularly for things like diminished value), etc. It was the best value of my entire trip and it was a tiny fraction of the overall cost of the trip.

Today, I view purchasing the LDW as a necessary evil to make the trip more enjoyable from a “quiet night’s sleep” perspective, as taught in risk management classes. If you want a good vacation, you’d probably choose an Embassy Suites over a Motel 6. I view the LDW in the same light.

David Thompson, CPCU has many stories about people who don’t buy the LDW. For example, the agent whose customer went rock climbing in Colorado and didn’t buy the LDW because “I’m a good driver.” Well, the guy who side-swiped his rental car in the parking lot at the rock climbing venue was not a good driver. He got hit by the rental car agency for several uncovered charges, including about $3K in diminished value, got sued, and had to pay anyway, along with what the attorney cost him to respond to the lawsuit filed in Colorado. For less than $100, a small percentage of the overall cost of his trip, he could have walked away from the damage.

Below are two articles from the Big “I” Virtual University. As a public service, they are not password-protected. I very strongly suggest that you direct everyone you work with to these articles which explain why you and your customers should almost always buy the LDW.

Note: Please scroll down to read the Comment about coverage under a personal umbrella policy….

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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

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