Legal Definitions - loss damage waiver (LDW)

A Loss Damage Waiver (LDW) is a contractual agreement offered by a merchant, such as a car rental agency or heavy equipment rental company, to a customer when renting an item.

When you purchase an LDW, you pay an additional fee, and in return, the merchant agrees not to hold you financially responsible for certain types of damage that might occur to the rented item during your rental period. It's crucial to understand that an LDW is a waiver of liability from the merchant, not an insurance policy.

While an LDW provides significant protection, it typically does not cover all possible scenarios. Common exclusions often include damage caused by intentional acts, gross negligence, reckless behavior, or if the rented item is lost due to unexplained disappearance or abandonment.

Here are some examples of how a Loss Damage Waiver applies:

• Example 1: Car Rental for a Vacation

  Maria rents a sedan for a weekend getaway. At the rental counter, she is offered a Loss Damage Waiver for an extra daily fee, which she decides to accept. While parked at a scenic overlook, another car accidentally backs into the rental car, causing a dent in the rear fender.

  Explanation: Because Maria purchased the LDW, the car rental company will not charge her for the cost of repairing the dented fender. The waiver protects her from financial liability for this accidental damage, which would otherwise be her responsibility under the rental agreement.

• Example 2: Heavy Equipment for a Landscaping Project

  A landscaping contractor, "Precision Paving," rents a skid-steer loader for a week-long project to clear a large plot of land. The rental agreement includes an option for a Heavy Equipment Loss Damage Waiver, which Precision Paving adds to their rental. On the third day, while operating the loader, a large tree branch falls unexpectedly, scratching the paint and slightly denting the roof of the cab.

  Explanation: Since Precision Paving opted for the Heavy Equipment Loss Damage Waiver, the rental company will cover the costs associated with repairing the scratches and dent. The waiver ensures that Precision Paving is not financially liable for this unforeseen damage to the rented equipment.

• Example 3: Moving Truck Rental

  The Miller family is moving homes and rents a large moving truck for two days. They choose to purchase the Loss Damage Waiver offered by the rental company. While navigating a tight turn in their new neighborhood, the side mirror of the truck clips a mailbox, causing the mirror casing to crack.

  Explanation: Because the Millers purchased the LDW, the moving truck company will not charge them for the repair or replacement of the cracked side mirror. The waiver covers this type of accidental damage, relieving the family of the financial burden they would have faced without it.