Collision Damage Waiver

When you rent a car, you have the option to opt for a Collision Damage Waiver (CDW), but many travellers are unsure whether it is worth paying for. While a CDW can reduce your financial liability if your rental car is damaged, it does not cover every situation. Read on to understand how a collision damage waiver works, what it covers, its exclusions, and whether you should choose it before renting a car.Read more

What is a Collision Damage Waiver (CDW)?

A collision damage waiver (CDW) is an additional insurance cover that car rental customers can purchase to waive off financial liabilities in case of a collision or accident. It is not the same as regular car insurance and comes with specific terms, limits, and exclusions.

For example, you rent a car for a weekend trip. During the rental period, the car is accidentally damaged while parked. If you have a collision damage waiver, you do not have to pay the full repair cost. Instead, the rental company may reduce or waive the repair charges, as per the rental agreement terms and any applicable deductible. However, the CDW will not cover damages that fall under the listed exclusions or if you violate any rules of the car rental agreement.

What Does a Collision Damage Waiver Cover?

In case of an accident or collision, a collision damage waiver usually includes coverage for:

• Damages to the rental car's body, like dents and scuffs
• Overturning of the car
• It provides coverage for theft, fire & vandalism of the rented car.
• It provides coverage for towing expenses.

What is Not Covered under a Collision Damage Waiver?

A collision damage waiver insurance does not cover the cost of repairing the damages to the rented car due to the following:

• It does not cover any injuries to the renter in case the traffic accident has been caused due to his/her fault.
• It will not cover the expenses in case the renter was drunk driving or speeding or off-roading the rental vehicle.
• It does not cover damages to third-party vehicles, their property or bodily injuries.
• Damages to several car parts, such as tyres, wheels, roof, windscreen, battery and gearbox, are mostly not covered under CDW insurance.

Also Read: Rental Car Insurance

Collision Damage Waiver Vs Car Insurance

Both the collision damage waiver and car insurance offer financial protection to the driver/owner, but they are not the same. Here are the differences:

CDW and Loss Damage Waiver (LDW): Key Differences

Have a look at how the scope of coverage varies between the collision damage waiver (CDW) and the loss damage waiver (LDW):

How Much Does CDW Cost?

The cost of a collision damage waiver varies from one car rental company to another and is usually an additional daily fee that depends on the following factors:

• Car type and value
• Rental duration
• Location of the car rental
• Type of CDW selected

Note: Before opting for a CDW, compare its cost with any rental car protection that you may already have through your car insurance or credit card.

Should You Buy a Collision Damage Waiver?

The Collision Damage Waiver is worth considering when renting a car if you:

• Do not have any existing insurance coverage for rental cars
• Plan to rent an expensive or luxury car
• Want to reduce the financial risk of accidental damage
• Are travelling in a new city or country

However, if you already have a car insurance policy that provides coverage against damages to rental cars, CDW cover is not required. Additionally, before adding a CDW to your car rental agreement, carefully check the following details to avoid any unexpected expenses later:

• What types of damage are covered
• Whether a deductible applies
• Damage exclusions
• Driver eligibility rules
• Geographical restrictions
• If theft protection is included
• Claim requirements

How to Make a Claim Under a Collision Damage Waiver?

Follow these steps to raise a claim under the Collision Damage Waiver in case of accidental damage to your rental car:

• Immediately after the incident, inform the rental company as well as the police (if required)
• Take clear photos of the damage
• Provide the required documents and accident details
• The rental company reviews the incident and applies CDW as per the agreement

Note: The exact claim process under CDW may vary from one rental company to another.

Wrapping Up!

A Collision Damage Waiver helps reduce your financial responsibility if a rented car is damaged. However, it does not replace traditional car insurance. Since the scope of coverage and exclusions under CDW vary across rental companies, carefully understand the terms before you opt for this waiver. This will help you avoid unexpected expenses during your trip.