Collision Damage Waiver Insurance Explained
Car rental agreements can often include technical terms that aren’t that easy to wrap your head around. One particular abbreviation that causes uncertainty is CDW, or Collision Damage Waiver. Understanding what CDW does cover – as well as what it doesn’t cover – can help you avoid unexpected charges and feel more confident when hiring a car.
What is Collision Damage Waiver?
Collision damage waiver (CDW) is the amount the rental company agrees not to charge you (waive) if you damage the rental vehicle, it’s stolen or it’s completely written off. It means you do not need to pay the full cost of repairing or replacing the vehicle.
CDW does not remove your financial responsibility entirely though. You must still pay the excess shown in your rental agreement.
With a rental excess insurance policy from Cover4Rentals, this excess amount can be reimbursed.
CDW Insurance in Different Regions
In most regions – including Europe and the UK – CDW is usually (but not always) included in the base rental price.
In North America (USA or Canada), you should be aware that CDW is often not included. It tends to be an optional extra you purchase separately.
Can I Purchase CDW From Cover4Rentals?
Yes – you can purchase CDW with us. We cover up to USD 100,000 and it is automatically included in our USA & Canada policies, and can be added optionally to our Worldwide policies.
You may notice CDW is not available with our European policies. This is because basic levels of CDW are usually provided within your rental agreement.
When you hire a car, check your hire agreement to establish if CDW is already included.
How Does CDW Work?
Let’s imagine you return your rental vehicle and are given a damage report that comes to GBP 10,000. If your rental company provides CDW with a GBP 1,500 excess, this means you need to pay GBP 1,500. A Cover4Rentals policy will reimburse this to you following a successful claim.
If the rental company does not provide CDW but you purchased CDW from Cover4Rentals by purchasing a USA & Canada policy or a Worldwide policy and opting in to CDW cover, Cover4Rentals will reimburse the full GBP 10,000, following a successful claim.
In both instances, you are fully protected. Cover4Rentals will reimburse the excess unless CDW is not provided by either the rental company or Cover4Rentals.
It is important to understand exactly what your rental provider will and will not cover, especially in terms of CDW as this will inform which Cover4Rentals excess insurance policy you buy.