Loss Damage Waiver

The rental agency may have offered a damage waiver at the time of rental. The waiver can be titled by several different names, some agencies call the waiver CDW, PDW, LDW or DW. If the renter accepts the waiver and complies with the terms of the contract, then they will not be responsible for damage claims to the rental vehicle.

Whenever a rental agency rents a vehicle, they ask the renter to sign a contract which holds them responsible for all damages to the vehicle despite fault including but not limited to the physical damages, loss of use of the vehicle, administrative fee and all other related costs. The rental agency offers the sale of a waiver to all renters, which they call "loss damage waiver". For the consideration of the stated fee and full compliance with the rental contract, the rental agency will waive their right to collect for damage claims against the renter. Loss damage waiver is simply a waiver of the right to collect for an otherwise contractual right.

Loss damage waiver is not insurance, and is not underwritten by any insurance policy. The loss damage is simply a waiver of a right to collect the damage claim. The waiver will only be enforced if the renter complies with all terms of the rental agreement. The damage waiver does not work like a collision policy, where the insured can act in an improper manner and cause the accident and still be paid for the damages to their vehicle. There is no policy which backs the damage waiver to turn to for payment.

Loss damage waiver does not relieve the renter of any and all responsibility without limitations. The renter is still required to drive safely, not violate the contract and comply with the contract requirements. The rental agency expects and requires that the renter will act in a responsible manner and comply with the terms and conditions of the contract.

Loss damage waiver is sold for the purpose of protecting the average prudent driver. This is based on the idea that despite how careful and cautious a driver may be, accidents still happen. The renter can protect themselves by purchasing the waiver and then driving safely, making wise decisions, and complying will all terms of the contract. Loss damage waiver is not sold to protect a driver from any harm despite their own actions. It is not intended to cover the individual who has a conscious disregard for the vehicle and acts in a imprudent and unreasonable manner. Certainly, it is clear that when the rental agency rents a vehicle and sells loss damage waiver they are not giving the renter a license to use their property in a rash, reckless or abusive manner.

The damage waiver is a conditional agreement between the renter and rental agency. The renter accepted the damage waiver and agrees to comply with all of the terms of the contract. In exchange for these conditions the rental agency agrees to waive their right to pursue any damage claims against the renter. The rental agencies requirement to waive any damage claims against the renter is conditional upon their compliance with the terms of the rental contract. When the renter fails to comply with one of the terms of the contract then they have voided the damage waiver and the rental agency is not bound by the waiver.

The public policy argument behind the damage waiver is to protect the average prudent driver. This is based on the idea that despite how careful and cautious a driver may be, accidents still happen. The renter can limit their financial responsibility by purchasing the waiver and then driving safely, making wise decisions, and complying will all terms of the contract.

The law would not require the rental agency to take on the undue burden or waiving damage claims against renters who have mistreated the vehicle. It would be an injustice to allow the renter to disregard the terms of the contract and force the rental agency to absorb all of the losses that occur due to the failure to comply with the rental agreement. The damage waiver is not sold to protect a driver from any harm despite their own actions. It is not intended to cover the individual who has a conscious disregard for the vehicle and acts in a imprudent and unreasonable manner. When a rental agency rents a vehicle and sells loss damage waiver they are not giving the renter a license to use their property in a rash, reckless or abusive manner and the law does not require the rental agency to protect theses types of actions by the renter.