In the car rental industry, there are a lot of abbreviations and acronyms used. It’s important you have an awareness of these because they are often used in ways that confuse customers. So, what does a collision damage waiver cover?

A collision damage waiver (CDW), also known as a loss damage waiver (LDW) or sometimes a physical damage waiver (PDW), is the amount the rental company will cover (waive) if you damage the rental car, if it’s stolen or if it’s completely written off. However, you will still have to pay an excess amount.

CDW is the amount covered above the excess of the rental car’s policy amount, meaning you’ll still need to pay an excess. With a rental excess insurance policy from Cover4Rentals, the amount you do have to pay can be reimbursed.

How Does CDW Work in Different Countries?

Collision Damage Waiver in North America

If you are renting a car in the US or Canada, then you should be aware that CDW tends to be an optional extra. This means it’s not included in the base rental price and it needs to be purchased additionally.

Collision Damage Waiver in Europe

In Europe, CDW is typically included as part of the rental agreement but it’s very basic, only covering 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 and it is this amount that we reimburse you.

Alongside CDW, European car rental agreements also include theft and third-party liability but please 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.

In a nutshell, in North America, you need to opt in to CDW protection; in Europe, it’s included.

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, but the CDW still comes with an excess, the amount you’re responsible for after the CDW has been applied.

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 the online claim form and supplying all the necessary documentation, 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.

What is Supplemental Liability Insurance?

Supplemental Liability Insurance (SLI) 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 be mindful that our policies do not include any damage or injury to third-party property or people.

Final Thoughts

By understanding common terms in the car rental space, such as CDW and SLI, you can feel more confident about making decisions when renting a car. Make sure to always read your agreement carefully so you’re not caught out, and don’t forget your car rental excess insurance from Cover4Rentals for the ultimate peace of mind.