Damage waiver
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This article may require cleanup to meet Wikipedia's quality standards. Please improve this article if you can. (August 2008) |
Damage Waiver, or as it is normally referred to, collision damage waiver (CDW) is an optional collision coverage available while renting a vehicle.
CDW can be expensive, increasing the basic rental cost by up to 20%. In Canada, for example, it can exceed 50% of the cost. One should exercise caution dealing with that 'coverage', since there were reported cases of unscrupulous rental car companies attempting to charge customers post-factum, after the car is returned, without customer's express consent or knowledge[citation needed]. Instead of paying for CDW, renters who have car insurance valid where the car is rented may depend on it, or they may depend on coverage offered by the credit card they pay with. However, protection does vary.
Renters wanting such coverage should check with their existing car insurance as their existing insurerer maybe able to add it to their regular yearly policy for a small premium. This provides coverage from an insurance company that they know, instead of unregulated (from insurance standpoint) car-rental outfit, which offering you may understand less.
Credit card coverage is particularly important (a) when the rental car has a small scratch or dent, which would not even be reported on a personal car, but which the rental company may have professionally repaired, and (b) when the renter lacks personal car insurance, either collision or comprehensive.
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[edit] Risks addressed
If damage is not waived, and a rented car is stolen, or damaged by accident, vandalism, weather, etc., the renter must pay the full cost, plus administrative charges and loss of use.
The rental company's damage waiver normally covers accidental damage as long as the renter complies with the rental contract (such as authorized drivers, locations, no racing). The waiver may also cover theft, vandalism, and loss of use. The renter sometimes has a choice between waiving all or part of the damage, for different fees.
Contract stipulations do apply when purchasing CDW, and for some rental companies in some countries it may leave the renter responsible for major gaps in coverage. The descriptions above come from rental company websites, under headings like Policies, FAQ, Coverage, or More.
CDW may be required if the renter lacks personal car insurance or credit card coverage. (International Travel News, August 2007, p.30)
[edit] Insurance or not?
CDW meets the basic definition of insurance, since it transfers some risk from the car renter to the rental company. However rental companies do not call it insurance, since they are not licensed to offer insurance, and it is not regulated by insurance commissioners. Rental companies treat it as a waiver of their right to make the renter pay for damage to the car.
[edit] Credit Card Coverage of Damage Waiver
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The main difference among the four credit card companies listed below is that MasterCard and Amex cover collisions, theft, vandalism and weather; Visa covers collisions and theft, but omits vandalism and weather; while Discover covers only collisions. However MasterCard is not useful in areas with dirt or gravel roads. Even among these brands, some cards lack coverage, especially debit cards and cards with low credit limits. None of these schemes apply to non-US residents. In addition, no credit card will cover a rental that is being billed out through a third party, such as in the event that an insurance company is being directly billed for the rental.
The following table is an effort at a summary, though not guaranteed. Coverage is complex and changes periodically. Telephone staff do not know the changes. Formal insurance policies govern and are not easily available to cardholders, who are only given summaries, like the links below.
The description as to American Express coverage applies only to certain AmEx cards. The AmEx Platinum Cash Rebate card, for example, comes with no car rental insurance benefit whatsoever.
Mastercard also offers this coverage only to certain cards: "Standard" cards do not give this benefit, only "Gold" or "Platinum" cards.
| Coverage | MasterCard | Visa | Discover | American Express |
|---|---|---|---|---|
| Collision damage | Yes | Yes | Yes | Yes |
| Theft | Yes, unless car keys are missing | Yes, unless car was running unattended | No | Yes |
| Loss of use and other administrative charges by rental company | Yes | Yes | No | Yes |
| Vandalism, hail, weather, falling objects | Yes | Yes | No | Yes |
| Liability, personal injury | No | No | No | No |
| Maximum length of rental (days) | 15 | 15 in country of residence; 31 days outside | 31 | 30 |
| Type of roads covered | Paved | All, except off-road | All | Paved |
| Geography covered | World except Ireland, Israel, Jamaica; maybe Aust, NZ, Italy | World except N+S Ireland, Jamaica, Israel. | US & Canada | World except Ireland, Israel, Jamaica, Aust, NZ, Italy. |
| Drivers covered, assuming a cardholder signs contract | All drivers authorized to drive by the rental contract | All drivers authorized to drive by the rental contract | Person named on Discover Card | Person named on Amex card |
| Transporting any property | Yes | No | No | No |
| Other exclusions | Trucks, large vans, motorcycles, luxury cars. Many other standard exclusions, such as lack of reasonable care, racing, violating law, wear & tear, war. | Same, also exclude large SUVs | ||
| Other aspects | Rented vehicles must have a manufacturer’s suggested retail price of $50,000 or less. | Excludes equipment not installed by manufacturer (Ex. Rental Agency GPS) Promises payment 15 days after all documents submitted. | Payment limit of $25,000. | Offer better coverage for $20 per rental. |
| Report to credit card company in | 30 days | 45 days, but in fact immediately, since they can deny whole claim if any cost could have been avoided by earlier report | 45 days. Report in 24 hours to police & rental company | 60 days |
| Source, examined 7/17/07 | mastercard.com/rentandsave or MasterCard Trinidad and Tobago benefits | visa.com/eclaims - only for US-issued cards. No sources found (6/18/2008) on Visa Europe, so the program might not cover cards issued in Europe. | discovercard.com/discover/data/account/... This page says it addresses Titanium & Motiva cards. A web search does not reveal a page for Platinum coverage, and a 2006 paper description "Important information about your Discover Platinum Card Account" has similar coverage, but also excludes private roads, such as many shopping centers and subdivisions. | 1.www124.americanexpress.com/cards/... 2.www152.americanexpress.com/fsea/... 3.www.gemut.com/... |
| Key words so you can search if these links fail | "masterrental insurance" "physical damage to and theft" | "auto rental collision damage waiver" | "secondary rental car collision coverage" | "car rental loss and damage insurance" |
