If your head tends to spin after a rental car agent explains the extra insurance options when renting a car, I’m here to help. There are so many choices, but do you really need the extra rental car insurance in the first place? In this guide, I dive into the collision damage waiver to answer this question and more.
What is a collision damage waiver?
A collision damage waiver (CDW), also known as a loss damage waiver, is an agreement where the rental car agency waives its right to charge a high deductible for damage to a rental car. It is not so much insurance as a guarantee the rental company will pay for any damages to your rental car.
What does CDW insurance cover?
CDW insurance typically covers any damage to a rental vehicle while in your possession, such as driving in a city and getting into a fender bender. It also covers theft of the vehicle and vandalism. Waivers can cover lost income a rental car company might charge while the car is being repaired.
What is not covered by a collision damage waiver?
An auto rental collision damage waiver will not pay for injuries to you or other passengers, or damage to your personal property if you get into an accident in a rental car. The waivers also don’t typically cover damage from negligence. This could be behavior such as speeding or driving under the influence of alcohol.
How much does it cost?
If you’re looking to keep the cost of your rental low, collision damage waivers can make you squirm. They typically cost between $15 to $30 a day and can add a couple hundred dollars to a week-long rental.
Do you need a CDW when hiring a car?
If your auto insurance policy includes personal liability, but you’ve dropped comprehensive and collision coverage, consider purchasing a collision damage waiver when renting a car in the U.S.
If you’re traveling abroad, you must understand exactly what your rental includes. In Europe, car rentals often include personal liability coverage, which covers injuries you may cause to others and other people's property, but it doesn't include damage to your rental car from a collision. In this case, it would be wise to purchase a CDW, unless you have purchased car rental insurance through a third party or have a credit card that includes collision coverage.
Alternative options to a collision damage waiver
If you don’t want to get a collision damage waiver, you have some alternative options. Let’s check them out.
Credit Card
Many credit card companies offer rental protection for those using their cards to pay for rentals. Before traveling abroad, make sure to check this with your credit card company.
Travel insurance covering car rental
When you purchase travel insurance from a third party, you can usually add on car rental collision coverage. Going this route can be cheaper than buying a CDW from a rental car company. Though be aware that if you get into an accident, you must pay the company and then get reimbursed by the third-party insurer, which can be a hassle.
Your own auto insurance
Personal auto insurance policies can be thorough and include rental car coverage insurance and collision protection (the deductible you would be responsible for in the event of an accident to your car would also apply to a rental). If this is the case, buying extra coverage when renting a car in the U.S. would be redundant. However, your personal U.S. policy will not cover you when traveling abroad.
Conclusion
Armed with this information, I hope you can answer a rental car agent without hesitation when they ask if you need a collision damage waiver. If you have questions about other types of car and rental insurance, KAYAK’s car rental guide is here to help you.
