May 22, 2002

Cost of damage waivers can double cost of rental car

Mayfield Village, Ohio – Deciding whether or not to buy damage “waivers” at the rental car counter can be confusing to many consumers and in some instances can double the price of a rental car, says Progressive Insurance, the fourth largest auto insurer in the U.S.

Some consumers err on the side of caution and buy the waivers without realizing they may already be covered by their personal auto insurance policy. In a recent survey of consumers who have rented a car in the past three years, 19 percent said they always buy the rental company-offered “waivers” at the rental car counter and another 19 percent said they sometimes buy them. Reasons for buying waivers range from not knowing if personal auto policies provide appropriate coverage (24 percent) to feeling pressured by the rental car counter agent (eight percent).

Waivers are sold by rental car companies and waive the company’s right to collect for damages from the renter. These waivers may cover liability (damage you cause to other people or property), collision (damage you cause to the vehicle you rented) and comprehensive claims (stolen vehicle, weather-related damage like that caused by hail and flooding and collisions with animals).

The bottom line says Progressive is that rental car damage waivers can nearly double the cost of the vehicle rental. Waivers can cost between U.S. $7 and $25 per day, depending upon the company, vehicle, and type of waiver purchased.

John Barbagallo, director of product development, Progressive, said: “If you have ‘full coverage’ on your personal automobile (comprehensive, collision and liability coverages (bodily injury/property damage)), you should check with your agent or your company to see if that coverage extends to a rental vehicle. Chances are, it does and if you’re involved in an accident with a rental car, in most cases you would be liable only for your deductible on comprehensive and collision coverages, just as you would be in your personal vehicle.”

“It’s important that consumers understand what they’re already paying for and how it applies to a rental car. That way, they can make a more informed decision about what they may or may not need to buy at the rental counter,” said Barbagallo.

Other findings of the survey:

  • Sixty-three (63) percent of responders said they bought waivers because they wanted extra coverage.
  • Of those car renters who said they buy waivers, nine (9) percent bought them when they travelled on business, 45 percent bought them when they travelled for pleasure and 41 percent bought them for both business and pleasure travel.
  • Eighteen (18) percent of both men and women said they always buy rental car damage waivers at the rental car counter.
  • Younger respondents were more likely than older respondents to purchase waivers at the rental car counter. Respondents in the 18 to 24 age group were most likely to purchase waivers (58 percent), followed by the 25 to 34 age group (42 percent), 35 to 54 age group (35 percent) and 55 to 64 age group (27 percent).
  • The majority of 55 to 64 year olds reported never having bought rental car waivers (70 percent).
  • When asked where they would go for information on how their own auto insurance policy covers them in a rental car, the majority (64 percent) said they would ask their insurance agent, while eight (8) percent said they would read their policy papers.

Progressive Insurance offers these car rental tips:

Before you rent a car:

  1. Check with your insurance agent or company. Your first step should be to find out if the coverage you have on your personal vehicle will provide protection for you in a rental car.
  2. Check with your credit card company. Some credit card companies provide coverage at no charge if you use their card to charge the cost of the rental.
  3. Take your personal auto insurance policy and details of your coverages with you to the rental car counter. You may be asked a question that these papers can answer-or, if you’re in doubt, you’ll have your agent’s name and phone number readily available.

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