Collision Damage Waiver Insurance Explained
Car rental agreements can often include technical terms that aren’t that easy to wrap your head around. One particular abbreviation that causes uncertainty is CDW, or Collision Damage Waiver. Knowing what CDW does and what it doesn’t do can help you avoid unexpected charges and feel more confident and in control when hiring a car.
What is Collision Damage Waiver?
A collision damage waiver (CDW) is sometimes known as a loss damage waiver (LDW) or a physical damage waiver (PDW) and is the amount the rental company agrees to cover (waive) if you damage the rental car, if it’s stolen or if it’s completely written off.
CDW does not remove your financial responsibility entirely though. It covers everything above the car rental company’s excess – which you still must pay.
With a rental excess insurance policy from Cover4Rentals, the amount you do have to pay can be reimbursed.
How CDW Works in Different Regions
If you are renting a car in the US or Canada, then you should be aware that CDW tends not to be included in the base rental price. You must purchase it as an optional extra.
If you are renting a car in North America and want CDW cover, choose our Gold Worldwide policy and opt in to CDW cover. This policy provides you with up to £50,000 in CDW protection if you are liable for damage, theft or total loss of the rental car. Up to £12,000 in excess reimbursement is also provided meaning you’ll be fully protected against unexpected costs.
In Europe, CDW is typically included as part of the rental agreement but it’s very basic. It typically only covers damage to the body and may exclude damage to parts such as the tyres, wheels, windscreen and underbody. Usually, if any of these aspects are damaged, the cost, especially for tyres and wheels, is less than the excess amount. However, you are still responsible for this excess amount which could cost hundreds or even thousands of euros.
In a nutshell, in North America, you need to opt in to CDW protection; in Europe, it’s included but limited.
What is Supplemental Liability Insurance?
Alongside CDW, European car rental agreements also include theft and third-party liability otherwise known as Supplemental Liability Insurance (SLI). This covers damage to third parties, whether it’s people or property. European rental agreements typically include SLI, whereas in Canada and the US, it is not standard. Please also ensure you read the rental agreement to understand everything you’re liable for. If you have questions surrounding your responsibilities, ask your car rental provider.
Please be aware that Cover4Rentals’ policies do not include any damage or injury to third-party property or people.
Can I Purchase CDW From Cover4Rentals?
You can purchase CDW with us if you opt for the Gold Worldwide coverage option – it is not available in our European coverage option. This is because basic levels of CDW are usually already provided within your rental agreement if you are hiring in Europe.
Why Does My Policy Say ‘CDW Not Selected’?
If you have a Cover4Rentals policy (excluding Gold Worldwide cover), you might notice it says that optional CDW has not been selected. Don’t panic – you’re still protected! What this means is that your rental company is already providing the CDW.
However, you’ll still benefit from car hire excess insurance as CDW always includes an excess that you’re liable for.
For example, if the total cost of the damage claim is €1500 and your excess amount is from €500, you will have to pay this €500 damage, and the rental company will cover the remaining €1000. Then, upon submitting our online claim form, supplying all the necessary documentation and having your claim approved, your Cover4Rentals policy will mean this €500 gets reimbursed.
Together, the rental company’s CDW and your Cover4Rentals excess insurance policy means you’re fully covered.