Collision Damage Waiver gives you protection up to a certain limit in case your rental car gets damaged. It is good to understand fully what CDW covers and how much it can cost you if your rental car has damage when returned.
When you rent a car it can be important to have the necessary insurances. A rental car without insurance can quickly turn into a bad costly experience if you are involved in an accident. With this being said, we will go over the most common insurance in rent a car, Collision Damage Waiver (CDW). We will go over what it covers, what not and what to keep in mind about the CDW.
What is Collision Damage Waiver?
Collision Damage Waiver, also known as CDW is a basic car rental insurance offered to renters by rent a car companies. CDW limits your financial liability in case of damages to the body of the hired vehicle with an excess. The driver is responsible to pay for the excess, but the rest of the cost is waived by the car rental company. This excess can be different between rent a car companies.
How does Collision Damage Waiver work?
CDW is protection that limits your financial liability in case of damages to the bodywork of the hired vehicle. This limit is also called an excess. Each car rental company will have its own CDW policy and excess. In other words, with Collision Damage Waiver there is an excess. So if you get into an accident you will only pay for this excess and the cost that goes above this excess is waived. So if your excess is 200 EUR, you only pay 200 EUR. and any cost above that either falls on the rental company or its insurance company. This is of course as long as the damage goes under the policy of the protection.
What does Collision Damage Waiver cover?
If you get involved in an accident, the CDW will cover the cost to repair the damage to the bodywork of the car. Collision Damage Waiver covers the bodywork of the car. In case of collision, the body of the vehicle usually gets damage. This means that in case of dents or scratches to the bodywork of the hired car, there will be a maximum amount (called excess or deductible) to be paid. If the cost to repair the damage is under the excess, you will only be charged for the amount that will cost to repair the vehicle.
The photo below shows what Collision Damage Waiver covers.
So if the excess of your rental car is 200 EUR, the maximum amount you would be charged in case of a collision is 200 EUR. The remaining cost to fix the damage will be waived. It is also important to keep in mind that there are some exclusions to CDW which we will list below.
What does CDW not cover?
Collision Damage Waiver will cover the bodywork of your hired vehicle. However, it will not cover the following car parts:
- Towing charges
- Replacement keys
- Replacement locks
- Personal belongings
- Flat battery
- Extras (GPS, ski racks, child seats, etc. )
- The car's interior
It is important to keep in mind that the policy of CDW can be different between car rental companies and countries. So we recommend that you ask the agent at the counter what CDW does not cover.
Does Collision Damage Waiver cover Third Party damages?
Collision Damage Waiver only covers the bodywork of hired cars. It will not cover third-party damages. To be covered by Third-Party you will need to have another protection. The Third-Party Liability covers damages to other people's property or injuries to people.
You will also see Theft Protection (TPL or TP) as coverage offered by car rental companies. It covers your hired vehicle in case of theft, or damages caused when someone steals it.
Car rental companies all have their own coverage included in their prices. With many in Europe, you will find TPL and CDW included in the rental prices. With Orbit Car Hire it is displayed in the booking search for each offer you see.
Do I need a Collision Damage Waiver?
Many people in the USA citizens already have insurance through their personal car insurance or credit card company. Some credit card companies such as American Express, Visa cards, Mastercard, and other credit card companies will offer CDW as the primary coverage for your rental car. If you have CDW through your credit card, bring proof of coverage included with you. And read through their policy and make sure they provide coverage for the length of your car hire and rental car type.
If you do not have coverage through your credit card, it can be a good idea to have a Collision Damage Waiver. Without it, you can expect a hefty bill if your hired car is involved in an accident. As we all know, accidents can never be predicted so it is important to have protection to avoid unforeseen costs.
Can I buy additional coverage for my rental car?
When you pick up your rental car, you will be offered to purchase extra cover or insurances. Additional cover or insurances can all have different names that can be quite confusing. You might see coverage that is called Super Collision Damage Waiver. Many car rental companies have their own names for their coverage such as Premium Protection, Platinum Protection, Relax Package.
This additional coverage will minimize the excess, cover other parts of your hired vehicle, and can help you avoid having to leave a security deposit. You can also be offered coverage that reduces the excess to zero. This will mean you would not have to pay anything that the coverage includes in case of an accident.
Is Collision Damage Waiver an insurance?
Collision Damage Waiver is often called insurance but in reality, it is not. Car rental companies are liable for any damage that may occur to their cars. They are the insurance holders. The car rental companies have the right to pass on their liability to people who rents their cars, but they do waive this right. The renter is still responsible for the cost or the excess although the company has waived its right.
Although it may be called insurance or a waiver it comes out to the same for the renter. Regardless of the name, it is a coverage that can stop hefty bills to set a scar on a wonderful holiday.