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.
Tags: CDW