Rental Car Insurance Mythsby david daly on 03/15/12
Picture it: A giant yellow bulldozer is backing up towards you and the driver has no idea that you are in its path. Even at a snails pace, the 4 ton behemoth of steal threatens to crush your aluminum rental car to smithereens. You start honking frantically, but your desperate attempt to alert the driver of your puny obstructed presence goes unheard. Then you hear the screeching sound of metal crushing metal as the bulldozers enormous shovel arm cuts through the hood of the car like a hot knife through butter.
This was the scene outside the Jackson Hole Elk Refuge last month as Ben and I watched- in slow motion- as our rental car was crushed by a bulldozer doing snow removal in the visitor center parking lot. As we sat gobsmacked watching the demolition unfold in front of us, just two thoughts went through my mind: (1) There is no way we are going to make the 4pm sleigh ride through the Elk Refuge, and (2) It was probably not a good idea to decline the option to add me as a registered driver on the rental car contract.
The next few hours would be spent dealing with the local police, the supervisor of the Elk Refuge, Avis customer service, a tow company, and hours of phone calls and paper work with the insurance companies. The grueling process of dealing with a rental car accident taught me that there are several myths and misconceptions about rental car insurance policies that I thought I should share:
Rental Car Myths:
Adding additional drivers is an unnecessary expense Avis had offered to add a second driver for an additional $12.95 per day which we declined as an unnecessary sales gimmick, kind of like paying the $100 for the stain guard on a new couch. However, since I was driving the car during the accident and was not added to the contract, Ben was solely responsible for covering all damage incurred. The rental car company reserves the right to charge the credit card on file for a damage estimate- which in this case was over $2,000- if an unauthorized driver damages the car. The authorized driver assumes all of the risk if others will be driving the rental car, so the additional cost of adding extra drivers is a small price to pay to limit your financial liability for an accident.
If you pay with American Express, rental car insurance is automatically included The Amex Rental Car Insurance policy is full of loopholes! The coverage and benefits vary for each card and it is critical that you fully understand the coverage provided by your card before you decline the loss/damage protection offered by rental car agencies. For example, several of the cards exclude any protection for SUVs, luxury sedans, convertibles and pickup trucks. In addition, the coverage may be supplemental to your personal auto insurance which means you are still responsible for any deductibles. Furthermore, Amex only protects the cardmembers listed as authorized drivers on the rental car contract, so if you declined to add any additional drivers who then had an accident (a la moi), you are out of luck.
The Loss Damage Waiver (LDW) is a waste of money Many of us cannot decline the LDW fast enough when renting a car- its like when the waiter asks if you would prefer organic sparkling volcanic imported shiny bottled water instead of tap water. The LDW does come at an extra cost and it is quite profitable for the rental car companies, but the added protection and peace of mind that it provides should be carefully considered. The LDW benefit allows the authorized driver to basically walk away from any accident or damage to the car without any responsibility. In my case, it would have saved hours of phone calls and paper work dealing with my personal car insurance and any worry that I would have to pay anything out of pocket. But, for anyone who does not own a car and have personal auto insurance (like many New Yorkers), the LDW should never be waived. It is your only insurance option if anything happens to the rental car and without it you open yourself up to unlimited financial liability that simply is not worth the risk.
The entire accident was caught on video surveillance. Please be aware that the footage is quite disturbing: