Originally Posted by
garykung
While it is true that many car rental companies will not consider optional coverage as insurance, the reality is LDW coverage works exactly like insurance. Just because a car rental company says it is not, it does not mean it is not insurance.
It isn't insurance. It functions LIKE insurance, but it isn't insurance. It's a WAIVER, under which the rental car company agrees, for an upfront fee, not waive any claims they might have against you for damage to their vehicle.
Originally Posted by
garykung
Also - for each location that sells optional coverage, the car rental personnel selling the coverage must be licensed by the state's insurance regulatory agency. They are usually known as rental car agent or limited line agent.
This is because the liability insurance that rental car companies sell actually IS insurance. They sell liability insurance (typically dubbed SLI or something similar) under which the rental car company is providing you with insurance against claims by a third party. They also sell personal accident insurance, personal effects coverage, etc. In all these cases, the rental car company is agreeing (or their partner insurer is agreeing) to cover your losses or someone else's losses. This is insurance. LDW/CDW when provided by the rental car company isn't insurance,