Protect Your Excess

CDW stands for ‘Collision Damage Waiver’ and is a form of insurance that relates to rented cars.

If you are renting a car, you’ll probably find that the rental company will include in the price, or offer for separate purchase, CDW insurance. If you take it, you will be covered for some forms of accidents or damage to the rented car while it is out on rental to you.

The obvious implication here is that if you are using a hired car and do not have collision damage waiver in place, then you will have to pay for any and all damage sustained by the vehicle. It’s worth remembering that however careful a driver you are, the rental car could be damaged while in a car park or even stolen. All the repair costs up to potential full replacement of the vehicle, will make their way towards your credit card unless you have some form of insurance in place.

So, most renters tend to readily purchase collision damage waiver as a sensible precaution. This though will not offer you the full protection you may have hoped for.

Policy limitations

The insurance sold by a car rental company is likely to come with several significant limitations. It is quite likely that their basic collision damage waiver insurance will exclude several areas of the car from cover – notably the wheels, tyres, roof, windows and undercarriage. If any of them are damaged, you’ll have to pay. The policy will probably also carry excess of between 500 and 1500 pounds. The excess is the amount of money you would need to contribute towards the cost of a claim.

All in all, if you have an accident and only the basic CDW cover, you will probably find yourself on the receiving end of some hefty bills that may be charged directly to your credit card.

If you’d like to avoid this, you can purchase ‘top-up’ insurance from the rental company. They may also call this ‘Super CDW’ and it could reduce or eliminate the excess and possibly include cover to those areas of the vehicle usually excluded. You may find it interesting to know however that you can purchase similar or even better forms of such insurance on the Internet from specialist providers of rental car insurance.

Specialist providers

These companies can offer various forms of car rental policies to cover many risks. In some rental situations you may be able to substitute entire components of the rental company’s insurance for your own privately purchased and much cheaper policy. In others, you may be able to purchase ‘top-up’ insurance separately from the rental car. In that sort of situation you may, for example, still have to pay excess to the rental company following an accident but you could claim that back from your own policy.

The CDW cover offered by the specialist providers is sold to you as a policyholder and not just for a specific car rental. The policies can have a duration of several days or even a year. Subject to the terms and conditions of the policy, it will cover you for any vehicle rented during the lifetime of the policy. If you’re serious about protecting your interests as far as possible and saving money, then this is an option you may wish to research further.

CDW stands for ‘Collision Damage Waiver’ and although this may sound like an injury, it is in fact an insurance term used in association with car rentals.

One of the risks when driving any car is having an accident. Obviously the first concern in such a case would be the avoidance of injury to people but following on from that would be concern relating to property. If you’re driving a rented car it may not be your property but you are legally responsible for damage to it. If it is damaged in an accident and it is not insured, you will have to pay for its repair or even replacement.

That’s why most car rental companies will either include damage collision insurance (usually called CDW) in their rental price or in other cases, such as the USA, they will try to sell it to you separately. CDW means that damage to the car would be paid for by the insurance company – or does it?

It is a fact that most CDW policies sold by the car rental companies will contain two important limitations, both of which could end up with you receiving some very large charges to your credit card.

The first of these is that the policy typically will exclude damage to certain areas of the rented vehicle. These are usually the wheels, tyres, windows, roof and undercarriage. These areas of a vehicle are all easily damaged and of course they can be expensive to repair.

The second problem comes about because of excess. The excess is a financial amount that the rental company’s insurance stipulates as the mandatory contribution you’ll have to make towards the cost of an accident. This figure is usually between 500 and 1500 pounds. If the damage repair cost is 1000 pounds and you have 500 pounds excess, you’ll need to pay 500 pounds of the claim. If the damage is 400 pounds then you’ll have to pay it all.

If you don’t like these conditions and risks you can purchase additional forms of CDW or top-up insurance from the car hire company. These may reduce the excess and cover the normally excluded areas of the vehicle. This form of insurance is very expensive though if purchased from a car rental company.

You may find it cheaper to purchase CDW cover and related car insurance products from a specialist hire car insurance provider. These companies sell their policies across the Internet and their pricing structure is usually far more attractive than that of the rental companies. They would, for example, be able to offer a policy that would reimburse you for any excess payments you’d had to make to the car rental company following an accident and it would also cover repair costs to areas of the vehicle excluded by the rental company’s CDW insurance.

As these CDW and related policies are sold by the direct insurers for a period of time (daily or annually) they can be used to cover any vehicle rented by you during the period providing certain conditions are met. It may be a good idea to pursue this one a little further if you’re interested in saving money.

CDW stands for ‘Collision Damage Waiver’ and it is a form of car rental insurance.

When renting a car, in many countries the rental price will include some forms of insurance. In others, with the USA being the best example, the vehicle may come with little or no insurance included in the basic rental price and the car hire company will offer it as an optional extra.

Car rental insurance is similar to private motoring insurance in that most people will want to know that the vehicle is covered against the three classic forms of risk – theft, third party liability and damage to the rented vehicle itself. Third party liability covers the potential costs arising from an accident that injured another person or their property and theft insurance covers the illegal taking of the vehicle.

Damage to the rented vehicle itself is covered by the insurance known as CDW. It is important for any renter to understand that if the vehicle is not covered by CDW, third party liability or theft then they are legally and financially responsible for all costs in these categories.

It is because of these financial risks that most people will look to purchase insurance that protects them. If it is not already included in the rental price, a basic form of CDW can be purchased from the car rental company. In reality, this basic CDW insurance will contain certain limitations.

It is likely that the basic CDW obtained from a car rental company will exclude several areas of the rented vehicle from its cover. Typically this would include wheels, tyres, general undercarriage, roofs and windows. It is very easy to damage these parts of a car even in a minor accident and the repair costs can be high.

Basic CDW will also usually carry excess. The excess is a financial amount that the rental company’s insurance will insist that the renter pays as the ‘first part’ of any claim. The excess is usually outlined clearly in the insurance documents and the amounts can be high – typically between 500 and 1500 pounds. It works simply – if there is 600 pounds excess and there is damage to the vehicle that costs 1000 pounds, then renter will have 600 pounds extra charged to their credit card. If the damage costs 350 pounds then the renter will need to pay it all.

Purchasing additional ‘top-up’ insurance from the rental company can reduce the excess on a basic CDW policy. Although this may also offer cover for excluded parts of the vehicle, in general such ‘top-up’ insurance is considerably more expensive than similar cover purchased directly online from a specialist insurance company or broker.

These companies sell daily or annual CDW cover policies. They are usually very significantly cheaper than those offered by the rental companies. The policies work by reimbursing the policyholder for any extra amounts they may have had to pay to the rental company for excess or damage to excluded areas of the rented vehicle.

As the direct insurance companies sell their policies to a policyholder rather than a single hire car arrangement, they will cover all vehicles rented during the period although some specialist vehicle categories such as sports cars or high value vehicles over 100,000 pounds in value may be excluded. They offer various CDW products that are tailored to the renter’s needs by country or region. The flexibility and cost savings could be large and it is worth considering further for those that are looking to save money and reduce risks.

If you’re planning on renting a car during your next holiday, you can expect it to cost you a hefty chunk of your spending money. Although it’s a great way to go off the beaten track and really explore the area you’re holidaying in (and can make things so much easier if you’re travelling with children, or just really don’t fancy walking or catching a taxi everywhere), it’s easy to run up quite a substantial bill for the privilege of having a set of wheels – and that’s not made any better by the flood of additional fees and charges you might find yourself faced with at the rental counter if you decide to purchase CDW, or another type of liability insurance.

When you’re looking at renting a car, you need to look at the excess its insurance comes linked to. An excess works in exactly the same way for hire cars as it does on standard motor insurance – you agree to pay the first however-much (say, £250) of any repair bill, and the insurer is liable to pay the rest. While this can save you a lot of money in the long run, especially if you’re involved in an accident, it’s also very little use to you if you only have a small accident that is relatively cheap to repair. Worse still, the excess on most foreign car hire insurance policies is astronomically high, which could leave you severely out of pocket should anything happen to the car.

The solution to this comes in the form of an additional extra policy, known as a collision damage waiver, or CDW. A CDW is designed to reduce your excess, meaning that you pay less if you accidentally damage the care while it’s signed over in your name. This usually won’t completely eliminate the excess (although if you shell out a little bit extra for what’s commonly known as a Super CDW policy, it might be possible to cut it down to zero). Of course, this will cost you, and it can often be hugely expensive.

It’s usually a cheaper option to buy your car rental insurance online before you even set foot on an aeroplane. Thanks to the internet, there are dozens of providers able and willing to offer you this service, and it will almost certainly work out cheaper than buying the equivalent cover over the counter at your destination. Additionally, you’ll be able to research the policy before you buy it, and not feel like you’re wasting your precious holiday time sorting out insurance when you could be out having fun. It’s possible to buy either day by day cover or an annual policy, which will keep you covered against damage to any car you rent for a twelve month period. While this might not be suitable for everyone, it can save you a lot of money if you plan on renting foreign cars abroad more than once in this period, and don’t want to shell out for separate CDW cover every time.

In short, you don’t have to let the search for reasonably-priced CDW insurance spoil your holiday; reductions on your rental insurance package could be just a click away.