5 Things Every Equipment Dealer Needs To Know About Damage Waivers

By Amanda Murphy | Posted on February 13, 2018


Damage waiver: an oft-misunderstood but vital component of the equipment rental industry. This blog post will serve to define what damage waiver is, explain how it works, what to expect in terms of coverage, and how to provide a damage waiver to rental customers in a way that will improve profitability for a rental business and add value for renters.

  1. What is a Damage Waiver?

Called by many different names (Loss Damage Waiver, Rental Equipment Protection, Fire Theft Vandalism) with varying degrees of value, but with a common objective. Renters are responsible for any losses or damage to equipment while it is out on rent. A loss damage waiver (LDW) serves to limit the financial responsibility of the renter to repair damage to rented equipment in exchange for a fee usually listed as a line item on a rental bill.

A damage waiver is not insurance, but is often part of a program offered by a licensed insurance carrier. It reduces any exposure to a renter’s business insurance policy and eliminates the renter’s need to provide proof of physical damage insurance before renting equipment. It simplifies the rental process and the claims process.

  1. What does it pay for (or not pay for)?

The truth is, it depends.

Some damage waivers are “named perils” only, which means the only losses that are covered are the ones specifically listed in the fine print. Before renting equipment from an equipment dealer with named perils coverage, the renter should do their due diligence and become familiar with the terms of the rental agreement and which perils are covered.

“All risk” coverage, like Rental Equipment Protection™ (REP) from J.T. Bates Insurance Group pays for damage except named exclusions for the rental period. With REP the only exclusions listed are criminal activity committed by the dealer, loss of use, mechanical breakdown, missing property (unexplained or mysterious disappearance), and normal wear and tear. Proof of purchase of REP is required for any claims, and claims will not affect business insurance premiums. With all risk, it’s covered, unless specifically stated otherwise. REP also has a waiver of subrogation which means when the renter damages the equipment, we will not contact their insurance company to recoup the money we have paid out for damages.

  1. Deductibles

With damage waivers in general, equipment dealers and rental houses will often pass through their cost with high deductibles. With REP, deductibles are low and it is up to the dealer to decide if and how to pass the deductible on to the renter. In the event of a claim, the renter would pay for repairs up to the deductible amount, and REP covers any remaining damage with the exception of a very short list of exclusions.

  1. How to sell it

It’s easy enough to sell a damage waiver. Add it to the rental and it’s protected. Rental Equipment Protection™ in particular is a value-add for the rental customer. Clearly communicating the benefits of REP to customers in easy-to-understand language is an effective way to facilitate sales. JT Bates offers marketing materials and training to assist.

  1. Where you can find it

Rental Equipment Protection™ is an exceptional damage waiver option and is only available from J.T. Bates Insurance Group. Call us today for a free, no obligation quote to find out how REP can help your rental business increase profitability while eliminating risk, or to ask us about pricing for this program.


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