Collision Damage Waiver insurance is the basic form of insurance for car rentals which covers damage to or theft of the rental car. By taking out the waiver, the renter of the car passes on their responsibility for the cost of the damage or loss, to the insurance company.
Some car rental companies now offer rental terms, which may include Collision Damage Waiver Insurance as part of an all inclusive rental package – the daily rental rate quoted will include an allowance for insurance. Others will quote you a much cheaper daily rental rate and show the insurance costs separately.
Collision Damage Waiver insurance bought from the car rental company generally comes with large excesses and some exclusions.
The excess amount is the level of cost above which the collision damage waiver policies will start to pay out. All costs for damage to the rental vehicle at or below this value will have to be paid for by the renter of the car. Since excesses can range from between 500 to 1500 pounds this can result in a hefty bill should the car suffer damage.
The exclusions on the policy relate to areas of the car like the windscreen, roof, tyres and undercarriage. They are excluded from the policy – they are not covered. If something happens to them you have to pay for their, potentially expensive, repair or replacement.
So while Collision Damage Waiver insurance may be an essential part of your car rental insurance, it is not necessarily the whole story.
No matter how it is calculated, when renting a car it is your responsibility to make sure that you are happy with the level of insurance cover offered. If you think you need more then you should perhaps consider buying more.
You can take out additional insurance to cover the exclusions and the excesses of your CDW policy. This can be bought either from the car rental company or from an specialist insurance company. Many of these specialist insurance companies can be found on the internet and you may be surprised at how much cheaper their rental insurance can be when compared to the equivalent level of cover from the car rental company.
One interesting product that the direct hire car specialists can offer is an annual excess policy to top up the Collision Damage Waiver. When bought from the car rental company, this will provide cover calculated on a daily basis for the duration of the rental. The independent companies however have annual policies, which can be used over the course of the year for a number of rentals. These polices may offer significant savings particularly if you know that you are going to be renting a car more than once in a yearly period. There are terms and conditions which you will need to comply with, but you should be able to find something to meet your needs.
Nobody wants to have an accident or damage their rental car but knowing that your Collision Damage Waiver Insurance together with an excess top-up gives you complete cover can offer welcome peace of mind leaving you free to enjoy that holiday or business trip.