RENTAL CAR COVERAGE GUIDELINE
 

Juffer Inc.  strongly recommends to its customers that they purchase the optional Collision Damage Waiver, (CDW), or Loss Damage Waiver, (LDW), from the car rental company when they rent autos. Our reasons are given below.

1.    Loss Valuation:    The Personal Auto Policy, (PAP), covers the lesser of the "actual cash value" of the vehicle or the amount "necessary" to repair or replace the damaged property.  The rental agreement may contractually obligate you to reimburse the rental company for the "full value" of the vehicle.   Your auto policy’s Appraisal clause may be invoked with its accompanying costs. The PAP also does not pay for any "diminution" of value, (if the market value of the vehicle, after repairs, is less than that before the accident).

2.    Claim Handling:    The insurance company has the right to “...inspect and appraise the damaged property before its repair or disposal.” However, the rental company, unlike you, is not contractually obligated to the insurer...it may choose to make the repairs immediately, potentially resulting in a lack of PAP coverage because of failure to comply with this contractual condition. In any case, purchase of a CDW or LDW usually allows the renter to “walk away” without the headaches involved in adjusting an auto claim.

3.    Immediate Loss Payment:   The rental agreement may require immediate reimbursement for damages, and it is customary for the rental company to charge your credit card. This could  “max” out the card's credit limit (perhaps shortening a vacation or business trip).

4.    Carry Comp & Collision: Rental agreements often make the renter responsible for any loss in value beyond normal wear and tear, regardless of the cause and regardless of fault. In order for your PAP to respond, you must insure at least one vehicle for both collision and other-than-collision (often called “comprehensive”) coverage. If not, your policy will not respond to rental car damage and loss of use claims.

5.    Indirect Losses: You will most likely will be responsible for the rental company’s loss of rental income on the damaged unit. Your policy has limited coverage for these charges.

6.    Administrative Expenses:  The rental contract may make the insured liable for a number of  loss-related expenses
such as administrative fees,  towing , appraisal, claims adjustment, storage, etc.  Some of these expenses may not be covered by the PAP.    

7.    Other Insurance:  The PAP says that it is excess over:  any coverage provided by the owner of the auto,  any other applicable physical damage insurance, and any other source of recovery applicable to the loss—travel policies, credit card coverage, etc. The potential controversy over who pays what is obvious.  In addition, keep in mind that many states have statutes, proprietary policy forms, and/or case law precedents that may govern this and other rental car exposures.

8.    Excluded Vehicles & Territories:  The PAP does not provide physical damage coverage for motorcycles, mopeds, motor homes, or other vehicles that are not private passenger autos, pickups, vans, or trailers. In addition, use of covered vehicles is limited to the U.S., its territories and possessions, Puerto Rico, and Canada (the rental agreement may also exclude operation outside a specific geographical area). If you rent a trailer (U-Haul, camper trailer, etc.), coverage is limited to $500.

9.    Excluded Uses & Drivers: The PAP may have limitations on use of vehicles, (for example, physical damage for business use of non-owned pickups is excluded), that are not otherwise excluded by the rental agreement's CDW or LDW.  Also, the PAP may include an exclusionary endorsement for certain drivers.  The CDW will only apply to listed operators, but operators for which no PAP coverage is available may be afforded protection under the rental agreement by adding them as listed driver.

10.    Additional and/or Future Costs:  Any losses for a rental vehicle under the PAP will include the deductible you carry for either comprehensive or collision, (depending on the type of loss), typically in the range of $100-$500 or more. In addition, a claim under the PAP for damages to a rental car may result in a premium surcharge or loss of credits on your next policy renewal

Other Tips:

• When you rent a vehicle, ask for an advance copy of the rental agreement in order to determine your contractual obligations for damage...a few rental car companies post this information on their web sites. Here is a listing of several national rental car company web sites.  Click on the titles to go to the respective websites.

• Be sure to inspect the rental car for existing damage to the interior and exterior and have the rental company acknowledge such damage in writing before you leave the premises with the rental car.
   

• Take proof of insurance with you on your trip
   

• Carry an inexpensive disposable camera with you to document existing damage or any damage that may occur while renting the vehicle.
   
• If you will be traveling abroad, try www.auto-europe.com for information about driving requirements and rental cars in Europe.