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Renting a Car This Summer? What You Need to Know before Reaching the Rental Car Counter

MAYFIELD VILLAGE, Ohio--May 2, 20048, 2004--

  Progressive Helps Travelers Answer That Dreaded Question: Would You Like to Buy the Rental Car Waivers?  



It's a scene that will play out during countless vacations this summer: You stand at the rental car counter, questioning whether you should spend money on the optional damage waivers offered by the rental company. If you've ever found yourself in this situation- you're not alone.

A recent survey by the Progressive group of insurance companies found that many drivers don't understand what protection the optional waivers provide. In fact, nearly three out of four respondents (72 percent) did not know what kind of protection is provided by supplemental liability waivers. Slightly more than half (52 percent) of drivers were aware that a loss damage waiver could relieve the renter of all financial responsibility for a loss or damage to the car. Fewer than half of the respondents (43 percent) were aware that personal accident and effects coverage could protect the renter and his or her passengers against accident, injury and loss to personal property.

The online survey of more than 500 drivers who indicated that they had rented a car for pleasure in the past three years revealed that one in four (25 percent) said they always or sometimes bought rental car damage waivers did so because they were not sure if they were already covered by their personal auto policy, and 15 percent said they felt pressured to buy the waivers.

Despite the confusion, many drivers don't take the time to determine if they should purchase rental car damage waivers, even though they can add significantly to the cost of a rental. Optional waivers can cost between $7 and $25 per day, depending on the rental car company, vehicle make and model and type of waiver.

The Progressive survey showed that more than one in four consumers (27 percent) do "nothing" to determine if they need to buy the damage or liability waivers sold by rental car companies. Almost twenty-six (26) percent review their credit card policy or contact their insurance agent to see if they need additional coverage. Among those who purchased optional waivers from the rental car company because they were not sure if they were already covered by their personal auto policy, only thirty-five (35) percent reviewed their policy first to determine if they needed additional coverage.

To help vacationers better understand the protection provided by optional rental car damage waivers and determine if they need them, a Rental Car Damage Waiver Guide is now available in the News Releases section of the News Room on progressive.com. Drivers can use the free, printable guide to review the coverages provided by their current auto insurance policy. The guide also lists each type of rental car damage waiver, explains what each covers, and describes typical circumstances in which a customer might want to buy them.

"We know deciding whether to buy optional waivers offered by rental car companies can be a confusing experience for a lot of people," said Tom Hollyer, product development manager, Progressive. "We want people to have the information they need to make more informed decisions about car insurance. Knowing whether you need to buy additional coverage can give you peace of mind and could save you money."

The Progressive group of insurance companies, in business since 1937, ranks third in the nation for auto insurance based on premiums written and provides drivers with competitive rates and 24/7, in-person and online service. The companies offer insurance by phone at 1-800-PROGRESSIVE, online at progressive.com and through more than 30,000 independent insurance agencies in the U.S. Providing stakeholders the information they need to make more informed decisions is a key company strategy. In 1994, Progressive became the first auto insurance company to provide its rates alongside the rates of other companies so consumers could easily compare and decide. In 2001, Progressive became the first Fortune 500 company to report operating results monthly and in August 2003 the Company began reporting earnings per share monthly. The Common Shares of the Progressive Corporation, the Mayfield Village, Ohio-based holding company, are publicly traded at NYSE:PGR. More information can be found at progressive.com.

Tom Hollyer is available for interview and additional survey data is available upon request. Rental Car Survey Did You Know... According to a countrywide survey by Progressive Insurance

Overall Survey Results

What Are Waivers Anyway?

When asked about damage waivers available at rental car counters, an overwhelming majority of consumers did not know what kind of protection is provided by supplemental liability protection (72 percent), personal accident and effects coverage (57 percent) and loss damage waivers (48 percent).

Emotions Consumers Reported They Felt At The Rental Car Counter When Asked if They Needed to Purchase Damage or Liability Waivers:

1. Indifferent (28 percent)

2. Confident (17 percent)

3. Defensive (nine percent)

4. Confused (eight percent)

5. Intimidated (seven percent)

No Thanks!

Only 11 percent of consumers said they always buy the waivers at the rental car counter, and 21 percent said they sometimes buy them. Yet, 65 percent said they never buy the waivers offered at the rental car counter.

Extra Protection, Please

Of the consumers who said they either always or sometimes purchase waivers from the rental car company, 59 percent purchase them because they want additional coverage beyond their personal auto policy limits. Fifteen (15) percent buy them because they feel pressured into doing so.

An Unprepared Rental Car Driver

Fewer than half of those surveyed (46 percent) reviewed their personal auto insurance policy prior to renting a car to determine if they needed additional coverage. Of those who said they always or sometimes purchase optional waivers from the rental car company, 25 percent said they did so because they didn't believe or know if their personal auto insurance policy covers them.

What You Don't Know Will Cost You

Almost half (45 percent) of consumers surveyed did not know that rental reimbursement on their personal auto policy covers them if their personal car is the in the shop as a result of an accident and they need a replacement vehicle.

Do I Really Need a Waiver?

More than one in four consumers (27 percent) do "nothing" to determine if they need to buy the damage or liability waivers sold by rental car companies.

Slightly less than twenty-six (26) percent of consumers review their credit card policy or contact their insurance agent to see if they need additional coverage.

Demographic Survey Results

Putting Men on the Defensive

When asked by the rental car company if they'd like to purchase the optional waivers, men were almost twice as likely as women to feel defensive at the rental car counter (11 percent versus six percent, respectively).

Who Can You Turn To?

While men were more than twice as likely as women to review their credit card policy to determine if they need to buy the damage or liability waivers sold by the rental car company (33 percent versus 15 percent, respectively), women were more likely to review their personal auto insurance policy (52 percent versus 43 percent, respectively).

Older Does Mean Wiser

Older (ages 65 and older) drivers were more likely than younger (ages 18-34) drivers to know what kind of protection is provided by loss damage waivers (55 percent versus 38 percent, respectively) and supplemental liability protection (29 percent versus 18 percent, respectively).

Younger May Be Extra Protected

Younger (ages 18-34) drivers were more than twice as likely than older (ages 65 and older) drivers to always (15 percent versus six percent, respectively) or sometimes (34 percent versus 14 percent, respectively) buy the damage or liability waivers sold by the rental car company.

The Battle of the Coasts in Insurance Smarts

-- Respondents living in the Northeast states were twice as likely as those living in the Great Plains states to review their credit card policy to determine if they needed to buy the damage or liability waivers sold by the rental car company (37 percent versus 17 percent, respectively).

-- Respondents living in the Mid-Atlantic area were most likely to review their personal auto insurance policy to determine if they needed additional coverage (52 percent).

-- Respondents living in the Midwest were more than twice as likely as those living in the West to feel defensive when asked by the rental car company if they'd like to purchase a damage or liability waiver (15 percent versus six percent, respectively).

What You Drive Affects Why You Purchase Coverage

Of those who said they always or sometimes buy the optional waivers offered by the rental car company, compact car drivers were twice as likely as SUV drivers to say they bought the waivers because they didn't know if their personal auto insurance policy covered them (30 percent versus 15 percent, respectively).

Region Definitions

Great Plains= Colo., Idaho, Kan., Mont., N.D., Neb., N.M., Okla., S.D., Texas, Utah, Wyo.

Gulf= Ala., Fla., La., Miss.

Mid-Atlantic= Ark., District of Columbia, Del., Ga., Ky., Md., N.C., S.C., Tenn., Va., W.V.

Midwest= Iowa, Ill., Ind., Mich., Minn., Mo., Ohio, Wis.

Northeast= Conn., Maine, Mass., N.H., N.Y., N.J., Pa., R.I., Vt.

West= Ala., Ariz., Calif., Hawaii, Nev., Ore., Wash.