Over the years, I have written and spoken extensively about rental cars and whether the loss damage waiver (LDW) should be purchased (YES!!!!!). Here is one of my blog posts on this subject:
Does Your Personal Auto Policy Cover Rental Cars? Answer: No!
The blog posts links to two other more detailed articles, one I wrote for the CPCU Journal and the other I wrote many years ago (since updated) about the Top 10 reasons to buy the LDW. One of the main reasons I ALWAYS buy the LDW is because of the rental company’s ability to assess me for diminished value if I return a vehicle that has been damaged while in my possession.
The vast majority of auto policies do not cover diminished value and I’ve seen a number of DV assessments in the range of $1,500 – $5,000. I’ve heard of even higher assessments, one being $15,000 on an upscale rental. The reason I’m revisiting this is that I learned about an insurer that is providing this coverage. A colleague sent me a “Personal Auto Enhancements Endorsement” from Acuity Insurance Company that says:
“If you or a relative is legally responsible for loss to a rented car, we will pay your contractual obligations for loss of use and diminution of value, resulting from the loss. We will not pay the rental car company if they are not legally permitted to recover loss of use or diminution of value.”
To read the full details of this and other enhancements, contact your local Acuity representative.
If you are aware of other insurers that cover diminished value, feel free to send me a copy of their policy or endorsement and I’ll update this blog post.
Photo by lordsutch 
Bill Wilson
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Hi Bill – I know your post references personal auto but I wanted to share that on the Commercial side, CNA offers this enhancement on short term rentals through their Auto Extension endorsement. I’ve sent you a copy to review. This is also a great post as I just had a client asking me about whether or not they should purchase the LDW coverage on a rental they were going to be taking out and I also advised them it would be wise based on the Dimunition of Value provision alone (They are not insured with CNA),,,,,! Thanks again for another great post.
Robin, thanks for providing this information. Looks like the limit for this coverage is $5,000. That’s probably adequate for the majority of diminished value claims. I’ve seen one as high as $7,000 and heard of a $15,000 DV assessment, but this is certainly better than nothing and a worthwhile coverage to include.