Reasons to Purchase the Rental Car Damage Waiver

WOLF AGENCY, INC.
www.wolfagency.com

Abstract: Although damage waiver fees are generally considered outrageous, most consumers should consider purchasing the waiver for short-term rentals. This article addresses the types of losses and expenses a consumer can incur which may not be covered by their auto insurance or credit card coverage. Please note that insurance policy coverages and exceptions referred to are specific to personal auto insurance policies written in New York.

Although most collision damage waiver (CDW) or loss damage waiver (LDW) fees are considered excessive, most consumers should consider purchasing the CDW/LDW for short-term rentals. This is becoming increasingly the case as rental car companies charge ever-higher fees and penalties for losses and expenses not covered by most auto policies or credit cards. Consider the following reasons for purchasing the rental car damage waiver:
1. Loss Valuation
The value of a rental car, according to virtually all rental agreements, is determined solely at the discretion of the rental company and may be significantly different from the market value "ACV" basis used in most auto policies. The “industry standard” (ISO) personal auto insurance policy covers the lesser of the "actual cash value" (market value) of the vehicle or the amount "necessary" to repair or replace the damaged property.
The rental agreement mayl contractually obligate the consumer to reimburse the rental agency for the "full value" (whatever that is) of the vehicle. If the renter’s insurance policy has a "betterment" clause, the insurer might not pay the “full value” and the renter could be responsible for the difference.

Significant Others, Significant Issues

WOLFAGENCY, INC.
www.wolfagency.com

Abstract: In 1950, over 80% of households were occupied by married couples. Today that number is less than 50%. Today, households are comprised of singles and, increasingly, couples living together. If one-half of the couple has a homeowners policy, is the other covered?

Oh how the times have changed. In 1950, eight in 10 households were occupied by married couples. According to the 2000 U.S. Census, that number declined to 51.7%; the balance being singles and couples living together who are not married. The former includes individuals who either live alone or with roommates; the latter encompasses both opposite and same-sex couples who consider themselves partners. It is the latter segment which now makes up approximately 10% of American households.

Renting Motor Homes, UHaul Trucks & Trailers

WOLF AGENCY, INC.
www.wolfagency.com

Question: I'm going to rent a motor home for an upcoming vacation. In trying to find out if my personal auto policy covers the motor home, I've called the insurnce company three times and gotten three different answers? Can you help?

One of the most common questions received by insurance agents involves rental cars. Less common, but just as important, are questions about renting vehicles other than private passenger autos, such as motor homes and UHaul-type trucks.

So, let's take a look and see what the 1998 version of the "ISO standard" personal auto policy says about coverage for motor homes and commercial-type vehicles.

The Personal Auto Policy & Pizza Delivery

WOLF AGENCY, INC.
www.wolfagency.com

According to the 1998 ISO Personal Auto Policy, there is no coverage for an insured’s ownership or operation of a vehicle while it is being used as a "public or livery conveyance," except that the exclusion does not apply to a share-the-expense car pool. The expressed intent of the policy drafters (via 1989 ISO insurance department filing memorandum) is that this exclusion is designed to preclude coverage for vehicles indisciminantly available for hire to the general public for the transportation of people or cargo (e.g., taxis, sight-seeing vans, package delivery services, etc.).

This exclusion presents "gray" areas as to coverage for certain activities such as newspaper deliveries, rural mail carriers (for subrogation claims under the Federal Tort Claims Act), home products sales reps (e.g., Avon, Amway, etc.), and so forth. For example, a continuing controversy is whether or not the exclusion applies to "pizza delivery." One court, in interpreting the more restrictive "transporting persons or property for a fee" exclusion, ruled that the exclusion did not apply to an employee using his own auto in the course of employment, largely because the delivery charge did not directly benefit the insured (United Services Automobile Association v. Couch, Tennessee Court of Appeals, 1982).

Reasons to Purchase the Rental Car Damage Waiver

Significant Others, Significant Issues

Renting Motor Homes, UHaul Trucks & Trailers

The Personal Auto Policy & Pizza Delivery

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