Reader’s Question:

What is a Loss Damage Waiver form and what does it do? My Car Insurance agent here in Allentown, Pennsylvania suggested I get one since they said my car insurance policy might not be able to fully cover me if I get in a car accident driving a rental car.

Luke

Allentown, PA

A Loss Damage Waiver form (LDW), which could also be known as Collision Damage Waiver or Optional Vehicle Protection, is a type of temporary auto insurance that protects or “waives” car rental customers from financial liability that could arise as a result of loss, damages, or theft by the renter to the vehicle that was rented. A Loss Damage Waiver form can also exempt the said customer from having to pay the daily car rental fee if the said car is being repaired and is unusable during the rental period. This usually costs around $9 to $20 daily, depending on the type of vehicle being rented.

If your car insurance agent tells you to purchase one, then your policy either has no provisions or clauses of extending your comprehensive and collision insurance coverage towards any other vehicle other than the one you own. This type of policy is actually very good for those who do not have any form of car insurance and just wishes to use the rental vehicle for short periods of time.

You also need to know that just because you have LDW doesn’t mean you can expect the car rental service to pay for any hospitalization bills or expenses to treat injuries. You may need to purchase some other type of insurance from them if you don’t want to be liable for any medical or legal expenses resulting from a car accident while driving the rental vehicle.

Tags: auto insurance