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Attorney Van O'Steen

Collision Waiver May Duplicate Coverage on Rental Car

Van O'Steen

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Collision waivers are high-profit items for car-rental companies. A  collision waiver is a provision in the rental contract waiving the company's right to collect from you or your insurance company if the rental car is damaged while you are renting it.

If you want this protection, you must pay for it. It can increase substantially the cost of your car rental.

In most cases, collision waivers provide only modest benefits because they generally add very little to automobile insurance coverage you already have.

Subject to any collision deductible you have on your own policy, you may be buying duplicate coverage when you pay for a collision waiver.

Some insurance companies that extend collision coverage to rental cars make an exception for "rental substitute cars." This is a car you rent temporarily to replace your car when it is out of operation. For this collision protection, you may be required to pay a small additional premium to your insurance company.

If you occasionally rent cars, I suggest you get advance written clarification from your insurance agent regarding the extension of your coverage to rental cars.  If you are adequately protected, you may want to save yourself the expense of a
collision waiver.

Even though your own insurance coverage may pay for damage to a rental car, there are modest additional benefits that come with collision waivers.

Without the waiver, your credit card immediately may be debited for the amount of damage or even the full value of the rental car. It may take some time for the car-rental company to verify your own insurance coverage and release this claim against your credit card.

Additionally, you may not have coverage for services such as towing, storage and other incidental costs that you might be required to assume.

Average daily rental charges can increase by 20 percent to 30 percent with waiver protection. For me, the benefits do not justify this relatively high cost of a collision waiver.