Last Updated on May 13, 2022 by David

Do you routinely decline the over-the-counter insurance when you rent a car? If you get in an accident and you haven’t purchased over-the-counter Collision Damage Waiver (CDW), the company can charge you for the cost to repair the vehicle. It can also charge Loss of Use fees to recoup forfeited revenue while the car is in the shop. After all, the time when the car being fixed is lost for the rental company.

On the surface, that may sound reasonable. But in practice, these fees can add up to ridiculous sums. The problem has worsened during the pandemic, for two reasons. First, the longterm car shortage has sent rental car prices soaring. That means you’ll pay more for every day the car is out of service. Second, the car will likely be in the shop for longer, since many auto repair shops are backed up waiting on parts. As Indiana’s 13News reports, these days the Loss of Use fee can easily add up to thousands of dollars.

Worse yet, Loss of Use can become a quagmire because these fees are not always covered by personal auto insurance and credit card protection, so they can take renters by surprise. Here’s what you need to know.

The Car Rental Loss-of-Use Loophole

If you decline CDW because you believe you are covered through your personal auto insurance or credit card, getting slapped with Loss of Use fees can come as a shock.

Loss of Use is a murky surcharge, as the laws vary from state to state. Some states—including New York and Wisconsin—do not allow rental car companies to charge Loss of Use fees. In other states—including Colorado and Texas—there are legal precedents upholding the rights of the rental car companies to charge them.

Buy Collision Insurance For Less Than What You’ll Pay at the Rental Counter

The most surefire way to protect yourself is to buy the Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW) sold over the counter, but it will be pricey and may not be the most cost-effective solution.

Personal Auto Insurance and Car Rental Loss of Use

Most major insurers cover rental car collision damage but not Loss of Use, the 13News investigation found. Call your insurance company and double check rather than assuming you are covered.

Credit Cards and Car Rental Loss of Use

Some credit cards will cover you for Loss of Use fees.

Do you have a Visa card? Consider using it for rentals cars, thanks to its CDW that includes Loss of Use Not