Columnists, NBSRA, V4I6


Loss damage waiver, liability damage waiver, damage waiver fee.

The names and acronyms may vary, but the concept is uniform within the rent-to-own (RTO) backyard structure industry. It is important as a manufacturer to understand the basics of what LDW is and what it is not from an awareness standpoint.

An apple is an apple, but there are many traits that separate one type of apple from another. These small variances make a big difference in the experience someone has when they eat the apple. LDW is no different. Each RTO company may have their own small variance on the program that will change the customer’s experience, but the overall message should be the same across the industry.

In the most basic of explanations, LDW is designed to protect the customer during the rental contract from being financially obligated to make payment on a product that is damaged by an Act of God. The most common of these are accidental fire, tornado, high winds, lightning, flooding, or damage from debris of thunderstorms. As a manufacturer, it is very unlikely your warranty would cover such damage; therefore, it is beneficial for a customer under rental contract to have the additional coverage in the event the unforeseen happens.

In essence, LDW brings peace of mind to customers.

It is important for you to know LDW is not insurance in the RTO shed industry. It is an optional program the customer may decide to opt in or out of. There is no requirement at any time for the customer to select the LDW. Cost associated with LDW may range from an upfront one-time fee paid at the time of sale to a minimum monthly fee added to the rental payment calculated by a percentage factor.

Generally, the intent of LDW is not to cover damage done to the contents inside of a unit or theft of the contents, or mysterious disappearance or loss of the unit itself. It is also not designed to provide compensation for damages or injuries sustained by someone due to intentional or negligent conduct. It is common industry practice for the customer to have to be current on all rental payments to process an LDW claim.

As a manufacturer, you will want to discuss the details of the LDW program your rent-to-own provider offers in order to fully inform your sales team and customers at time of purchase. Specific details will vary by RTO provider.

The true measure of the benefit to such a program comes at the time when a customer needs it.



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