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.
Tags: CDW