When purchasing insurance for the rental vehicle, it is fairly easy to fall in the trap of thinking that you have every corner covered and that irrespective of the problem, your agency’s got your back. But in reality, the coverage for damage/theft/liability may not suffice. Introducing the “loss of use” (L.O.U) fee, a gimmick utilized by some rental agencies to account for the income lost by them during the period when the vehicle is rendered inoperable. Assuming that by default the damage coverage accounts for it, the loss of use is the single biggest mistake one can make, although it seems “normal” if you think about it. But, as the Addams Family teaches us, “What’s normal for the spider is chaos for the fly”. Let’s elaborate.
The rental agency does offer you a way out, but.
it’s going to cost you a pretty penny. To put it simply, you can be sure to avoid the loss of use charges by purchasing LDW (Loss Damage Waiver) or CDW (Collision Damage Waiver), but the problem is that these options don’t come cheap and will substantially boost your rental fees. In this light, it may appear that the single reason why the loss of use fee was introduced in the first place is to make these insurance options more attractive to the public. Since nobody really wants to spend more than they have to on the rental, let’s examine your alternatives.
The rental company’s state might be your ace in the hole
The administration in several states works in the best interest of the customer by enforcing the law that stipulates L.O.U. coverage is included in the personal auto insurance of the renter. The list of states in this category includes:
– North Dakota
– Rhode Island
– New York
Therefore, if you live and/or plan to rent an automobile in these states, you should remember that you have no reason to accept the extra insurance options presented by your renter in order to be safe from loss of use charges. As for the rest of us elsewhere in the states or in other parts of the world, what happens?
Some renters can rely on their credit card providers
The keyword is “some” here, but not all and with several exceptions. For example, Visa cards constitute the best guarantee that you will not have to account for “valid” administrative fees and/or L.O.U charges because the newest addition to their policy stipulates such expenses are handled by them. Valid in this case implies rental periods that are not in excess of 15 days for internal rentals and 30 days for external rentals. In addition, paying with the Visa card is required if you want to benefit from this option.
American Express is another company that could prove useful, but only if you acquire the Premium Car Rental Protection pack. Whether or not MasterCard will help you with the L.O.U. charges is pretty arbitrary, as the “reasonable and customary” stipulation in their policy leaves room for interpretation. To put it simply, you should never assume that the credit card company will help you out unless you have thoroughly read their coverage and list of exclusions first.