Collision Damage Waiver and Coverage under the BAP

July 2, 2014

Our insured driver had an at-fault motor vehicle accident in which the claimant's vehicle sustained property damage. While the claimant's vehicle was being repaired, he rented a vehicle. The car rental agency sold him collision damage waiver insurance.

We understand that the daily rental fees would be owed as a consequential part of the claimant's claim for property damage. Would the claimant also be entitled to recover the collision damage waiver insurance fees?

Kentucky Subscriber

Property damage is defined in the BAP as damage to or loss of use of tangible property. So we agree that daily rental fees would be owed but as for CDW insurance, that has nothing to do with damage or loss of use when it comes to PD. CDW is a choice that some renters make when renting a car and it does protect them if the renters were to have an accident and damage the rental car. But, since the renter can choose not to purchase CDW and still can rent a car, we do not see the cost of CDW being a loss of use of the claimant's own car as required in the definition of property damage.