Everything you should know about collision damage waivers

If you find yourself overwhelmed by the array of insurance options presented by rental car agents, you’re not alone. With so many alternatives, the question arises: do you actually need additional rental car insurance? This guide delves into collision damage waivers, addressing that question and more.

What exactly is a collision damage waiver?

A collision damage waiver (CDW), often referred to as a loss damage waiver, is an arrangement where the rental company relinquishes its right to impose a hefty deductible for damages incurred on a rental vehicle. Rather than being insurance, it acts as a promise from the rental agency to cover any damages to your rented car.

What does CDW insurance include?

CDW insurance generally provides coverage for any damage to a rental vehicle during your rental period, such as if you have a minor accident while driving in the city. It also protects against vehicle theft and vandalism. Additionally, waivers can compensate for lost income that the rental agency might incur while the car is being repaired.

What does a collision damage waiver not cover?

A collision damage waiver for rental cars does not cover injuries to you or other passengers, nor does it protect your personal belongings in the event of an accident in a rental vehicle. Additionally, waivers usually exclude damages resulting from negligence, such as speeding or driving while intoxicated.

What is the cost involved?

Is a CDW necessary when renting a vehicle?

If your auto insurance policy provides personal liability but excludes comprehensive and collision coverage, you should consider acquiring a collision damage waiver when renting a car in the U.S.

If you’re traveling internationally, it’s crucial to know what your rental agreement covers. In Europe, car rentals frequently include personal liability insurance, which protects against injuries to others and damage to their property, but does not cover collision damage to the rental car itself. In this case, securing a CDW would be advisable unless you have third-party rental insurance or a credit card that offers collision coverage.

Alternative options to collision damage waivers

If you prefer not to opt for a collision damage waiver, there are several alternative options available. Let’s explore them.

Credit Card

Many credit card providers offer rental car protection for those who use their cards for payment. It’s wise to verify this with your credit card issuer before traveling abroad.

Travel insurance that includes car rental coverage

When you buy travel insurance from a third party, you often have the option to add collision coverage for rental cars. This option can be more affordable than purchasing a CDW directly from the rental company. However, keep in mind that if you are involved in an accident, you will need to pay the rental company upfront and then seek reimbursement from the insurer, which can be cumbersome.

Your personal auto insurance

Personal auto insurance policies can be comprehensive and may include coverage for rental cars and collision protection (the deductible you’d be responsible for if your car were damaged also applies to rentals). If that’s the case, acquiring additional coverage when renting in the U.S. would be unnecessary. However, be aware that your personal U.S. policy typically does not cover you while traveling internationally.

Final Thoughts

With this knowledge, I hope you feel prepared to confidently respond when a rental car agent asks if you need a collision damage waiver. If you have inquiries about other types of car and rental insurance, Dinogo’s car rental guide is here to assist you.

How does Dinogo determine what to include in this guide?

As a travel enthusiast and writer, I’ve explored over 30 countries and numerous states. I’ve rented cars in many of these locations and appreciate the flexibility it offers. However, renting can also introduce stress. I’ve navigated the narrow one-lane roads of Wales, flanked by stone walls, and have also rented vehicles in Mexico, Italy, France, Ireland, Scotland, England, and across the U.S. These experiences have equipped me to know when additional insurance is essential and when you can confidently rent a car without opting for extra coverage. With Dinogo’s expert insights, I was able to compile this guide for you.

Common questions about collision damage waivers