The Small Print in Collision and Loss Damage Waivers

Fender Bender on Highway 405

Collision and loss damage waiver insurance (CDW and LDW) is not insurance at all. Instead, the car rental company undertakes to self-insure itself if the vehicle is damaged during the period of the hire. The small print appears on the back of the form the client accepts by ticking the box on the front. However, you might need an electron microscope to read it unless you are a bot.


A Few Legal Notes Concerning the Small Print in Waivers


Damage waivers are not insurance unless the vendor has an insurance license, something most rental car operators do not have. This absolves them from the duty to obey consumer protection rules the government imposed on insurers to ensure fair play. They can also charge higher rates. Did you know that as much as 15% of their income could come from offering ‘insurance’, which is not insurance at all?

The car rental industry added a series of exclusions in the small print to their waivers over the years. For example, their rates have become a percentage of the hire fee regardless of the risk, which sounds unfair to long term renters. At Pteet, we charge a straight-line daily fee for a limited period, after which the annualized daily cost comes down considerably.

Moreover, those vastly more expensive car rental waivers include several open-ended exclusions. Lawyers have been arguing for decades over ‘what is mysterious disappearance’ and ‘how big is gross negligence’ in the small print, and making a pretty penny from it too, often at the expense of car hirers.

Rental companies also make their clients pay a first amount deductible from the value of the waiver, if it stands. The only reference to ‘deductibles’ in Pteet policies is we have none. We have no small print on our website either. We use the same font sizes on our FAQ and sales pages. Ask to see the small print in a waiver policy and note the difference.

Perhaps worst of all, most collision and loss waivers seem like a case of, 'how much money can I make out of this without breaking the law, losing customers, and ending up in court?' Pteet’s policies are transparently easy to understand.

We offer primary rental car damage insurance on a daily and annual basis, covering up to $45,000. You get separate annual cover for lost baggage (up to $1,000) and travel accident up to $25,000. With no deductibles whatsoever and no small print either. Learn more here.

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Fender Bender on Highway 405: Chris Yarzab BY CC 2.0