Car Rental Loss Damage Waiver: Are You Covered?

Driving a car in Houston, Texas can be a little intimidating. Kevin Messmer learned it also can be very expensive. Kevin, who's from Colorado Springs was on a business trip and thought he was protected by paying an extra $27 a day for the loss damage waiver.

But when he had an accident in a Cadillac CTS from Budget Rent A Car he learned the loss damage waiver was just $81 he had thrown away. "I had no idea. I thought I was fully protected," said Kevin Messmer.

Kevin says he was told the loss damage waiver was voided because the accident was his fault and he was ticketed for making an illegal turn. His credit card was no help because he had purchased Budget's loss damage waiver. He was told that cancelled the insurance he would've had through Visa. Thankfully, his last cushion his personal auto insurance policy kicked in paying most of the bill.

"It was scary. I mean it was $9,500 you know, and I don't have $9,500 to pay for damage and I thought that was why I bought insurance," said Kevin.

Kevin says budget also charged him close to $1,000 for a "loss of use charge." That's because the car was out of commission and couldn't be rented while it was being repaired.

So when will Budget's loss damage waiver cover you? I tried to find out, but ran into a brick wall.

I emailed and called Budget's media relations office for answers, but only got back rules written in fine print legalese. I received no help calling the general customer service line. A representative repeatedly told me, "Even if it's actually your fault and the budget car is damaged... you won't pay for it if you purchased the loss damage waiver."

That's not what Kevin found out.

A local Allstate Insurance agent with more than 15 years experience also was surprised. "This is intriguing to me and I'm in the industry. I mean you've brought to me, you know...details about specifics I was unaware of," said Cally O'Donnell.

O'Donnell says her clients ask her all the time about the need to buy loss damage waivers. She says she often tells them it's not necessary because their own auto policy covers them. "Now I feel like I'm not even educated well enough to say yes or no because what you've brought to my attention," O'Donnell adds.

I did get some answers from the head of media relations for Hertz. Paula Rivera told me the loss damage waiver will cover you if the car's stolen, vandalized, or if you hit an animal. But you must report the incident to authorities and fill out a police report.

However, if you're in an accident and cops say you were speeding, not wearing a seat belt, or were cited for any other infraction, you've violated the contract and the loss damage waiver is totally worthless.

I can't guarantee the rules are the same for all rental car companies, but bottom line before you approach that car rental counter do your homework.

The folks behind the counter are sales people. Their job is to get you signed up for as many extras as possible. They're not the claims agents who will deny coverage based on this or that exclusion.

Also talk to your insurance agent. No sense duplicating coverage and throwing your money away.

We also talked to Senator Mark Udall's office about this issue and his staff is interested in Kevin Messmer's case. Udall co-sponsored the Credit Card Bill of Rights and wants to explore whether consumers need added protection when it comes to dealing with rental car companies.


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Comments are posted from viewers like you and do not always reflect the views of this station.
  • by infoobtainer Location: ohio on Sep 9, 2011 at 04:27 PM
    Robin, you make a valid point as far as paying the $1,000 loss of use fee if you happen to have an accident while renting a vehicle. The extra $27 (or so) dollars per day is minimal in that instance if you are rentig a vehicle for a few days. However, if you rent a vehicle long-term, say for 30 days or more, and you carry comprehensive and collision coverage insurance which provides coverage for any vehicle you are driving through many insurance companies, I think it is unnecessary to purchase the additional insurance at a rate of $800 to $900, depending on the daily amount.
  • by Glen on Feb 21, 2011 at 04:42 AM
    The statement from Q: "Using your own insurance is not an educated option. If you have an accident in a rental car your deductible comes to play and your rates go up" is completely nonsensical. For *your own automobile*, if you have an accident your deductible comes into play and your rates go up. That's a given with car insurance, and perfectly acceptable for your own car. Why would that principle automatically be wrong if the car you're driving is a rental car? We get auto insurance for *any* car that we are driving, with whatever deductibles and premiums that we choose to pay. If Q's statement is correct, it would logically mean that we shouldn't rely on our own car insurance when driving our own automobile, because "your deductible comes to play and your rates go up". Should we go to car rental agencies then to buy daily car insurance for driving our own automobile then?
  • by bk Location: austin on May 23, 2010 at 07:29 PM
    I think your report was woefully incomplete regarding the facts as to why Budget declined to cover the damage. The reporter could have simply rented a car for a day to receive an actual contract. In addition, The State of Colorado or Texas (state of incident) could have provided resources regarding when the state allows for the exclusion of coverage for loss damage waiver.
  • by Robin Location: Colorado Springs on May 19, 2010 at 06:58 AM
    I rented a car several years ago from Enterprise and for the first time, paid for the extra insurance. Then I wrecked the car...rear-ended someone on sanded roads. They picked me up and put me in another car and I never paid a dime. Renting another car for a long trip next weekend and I called my insurance company. I have full coverage that will cover most needs, but it WILL NOT cover loss of use charges, so I'll be buying whatever "extra" covers that cost. Enterprise was great to work with, but everyone please do your homework. It's worth the extra time and effort to protect yourself and your family.
  • by Nicole Location: Colorado Springs on May 18, 2010 at 09:25 AM
    I was in a car accident with a rental car. It was a brand new car. My husband had fallen asleep at the wheel. The $20,000.00 car salvaged for $300.00. Fortunately, I used my platinum Visa card to rent it, and it had accident insurance which paid for the entire car. My regular car insurance paid for all the medical bills. All I had to do was buy two new car seats.
  • by PAST EXPERENCE Location: CS on May 18, 2010 at 09:08 AM
    I WILL NEVER RENT FROM BUDGET RENTAL CAR. DUE TO PAST EXPERENCE OF MY 70 YEAR OLD FATHER /HE RENTED FROM THEM ACOUPLE YEARS AGO IN IOWA /THE CAR HE WAS DRIVING BROKE DOWN 350 MILE FROM DES MOINES IN MOLINE ILL/SO HE WENT TO CLOSEST BUDGET OFFICE AT THE AIRPORT /THEY PUT HIM IN BIGGER CAR NOT HIS REQUEST .SO HE THOUGHT OKAY EVERTHING GOOD /BUT IT WASNT GOOD BECAUSE WHEN GOT BACK TO DESMOINES WHEN TURNED CAR INTO THERE OFFICE /THEY TRIED TO CHARGE HIM FOR A UPGRADE AND CHARGE HIM FOR A DIFFERENT TURN IN POINT /HE TOLD HIM BUT THE CAR YOU GAVE BROKE DOWN ITS NOT MY FAULT .THEY TOLD HE SHOULD HAVE KEPT DRIVING IT UNTIL IT LEFT HIM DEAD ON SIDE ROAD /HE DISTUBED THE CHARGES WITH CREDIT CARD COMPANY IT TOOK ABOUT 2 YEARS TO GET CLEARED UP AND UNJUST CHARGES DROPPED .PEOPLE ALSO DONT REALIZE IT MAY HAVE HAVE A BUDGET SIGN BUT THEY ALL ARE INDEPENDALLY OWNED AND PLAY BUY THERE OWN RULES .
  • by Karen Location: Colorado Springs on May 18, 2010 at 09:08 AM
    It is a 50/50 chance if you are in anaccident that you will be cited...those are not good odds if you were at fault. They areextremely miss leading at the purchase counter. I believe Ms. Sexton is correct in the statement they are simply upselling. If the statement below is true about Enterprise, it will be my company of choice. What about the credit card company he thought would cover him? Declining him because he purchased Budgets insurance? I think Steve is right in stating why use your insurance if not necessary, so I would really check the credit card coverage as well. I have used that as my insurance for all my past rentals. Thanks for allerting the consumers to this, I know I was surprised.
  • by Q Location: Peyton on May 18, 2010 at 09:07 AM
    Using your own insurance is not an educated option. If you have an accident in a rental car your deductible comes to play and your rates go up. If you purchase coverage thru the rental companies a deductible applies, unless you took a -0- deductible option and you walk away. The same goes for truck rentals. Being in the rental equipment business for 20 years I can tell you the best option is the coverage the rental companies offer. Hence.....there are missing links in this story. FYI: The ONLY insurance company that covers rental trucks is State Farm so if you rent a truck, don't buy the coverage option and you total the truck, your out about $50,000.00. Be an educated consumer and you won't pay for it in the end.
  • by Steven Location: Colorado Springs on May 18, 2010 at 07:30 AM
    Buying the coverage regardless of what you have is a must. Why use your insurance on a car you will never use again? I'm sure your deductible is more than the Damage Waiver. Not sure about other companies but at Enterprise they cover everything no matter who is at fault and no police report needed. That is who I rent from and have cases twice and never had any troubles or loss of use to pay. The main reason I switched my company to use Enterprise.
  • by Q Location: Peyton on May 18, 2010 at 07:12 AM
    I owned several equipment rental facilities in Colo Spgs for several years, one of which was Budget Car Rentals. This was not the policy four years ago nor does it make sense that it would be now. I think there are missing links in this story.
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