April 2005 Dec Page
Question of the Month
A car rented by the insured is covered as a nonowned vehicle under the terms of the personal auto policy. The policy promises to cover damage to a rented (nonowned) car in the same way it covers an owned car—the insured pays his deductible and the policy then pays for the remaining physical damage to the car. However, rental car companies offer an item called the loss damage waiver (formerly the collision damage waiver) that may confuse insureds when it comes to physical damage coverage for rented autos.
If the insured faces the choice of either purchasing a loss damage waiver or declining the offer, what should he do? What are the consequences for the insured if the rental car is damaged and the insured has declined the waiver? Does the personal auto policy negate the need for buying a waiver from the auto rental company? For information on the relationship between the personal auto policy and the loss damage waiver, see Rental Cars, the PAP, & the Loss Damage Waiver. The article is on the Personal Auto M.2 pages.
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