The insuring agreement states that the insurer “will pay all sums an insured legally must pay as damages because of bodily injury or property damage to which this insurance applies…”  As legal damages include both direct and indirect/consequential damages, we are wondering if CDW should be considered an indirect/consequential damage.

Utah Subscriber

Property damage is defined in the BAP as damage to or loss of use of tangible property. So we agree that daily rental fees would be owed but as for CDW insurance, that has nothing to do with damage or loss of use when it comes to property damage. CDW is a choice that some renters make when renting a car and it does protect them if the renters were to have an accident and damage the rental car. But, since the renter can choose not to purchase CDW and still can rent a car, we do not see the cost of CDW being a loss of use of the claimant's own car as required in the definition of property damage.

As for CDW being considered indirect/consequential damage in accord with the insuring agreement, it is true that the insuring agreement says the insurer will pay all sums, but that is based on damages BECAUSE of property damage to which the insurance applies. And, property damage is a defined term, so the insuring agreement in effect says the insurer will pay all sums an insured legally must pay as damages because of damage to or loss of use of tangible property. There was a loss of use of the claimant's car but CDW has nothing to do with a loss of use.

Now, there may be a legal ruling in some states on this matter. You might want to check with an attorney who is familiar with the law in your area to see if the courts there consider CDWs to be property damage. If so, then of course a court ruling tops insurance policy language.