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What is a collision damage waiver?
Free yourself from paying for rental car damage, but watch out for exclusions.
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If you pay for a collision damage waiver, it could be your ticket out of responsibility for damaging your rental car. However, you don’t get to waive responsibility for every situation, especially if you violate the rental agreement terms and conditions. In some cases, you might not need the waiver if you already have coverage in other places.
How does a collision damage waiver work?
A collision damage waiver is a type of agreement that waives your financial responsibility for loss or damage to the rental car you use. The coverage kicks in for damage you cause to the car as long as you don’t break the rental agreement’s terms and conditions.
If you’re getting coverage from a rental car or travel insurance company, you’ll have to pay for the coverage up front and sign the necessary paperwork. The collision damage waiver (CDW) may also be called a loss damage waiver (LDW) interchangeably.
What does a collision damage waiver cover?
A collision damage waiver generally covers the following:
- The cost of damage to the rental vehicle
- Collisions
- Weather
- Theft
- Vandalism
- Fire
Is a collision damage waiver worth it?
Paying for a collision damage waiver can be worth it in some situations. Before being confronted with this option at the rental counter, you can research whether your car insurance covers rentals or your credit card offers rental coverage. Read through the exclusions and terms and conditions to understand if that coverage is similar to what the rental company offers. If so, you may not need a CDW.
But because there are so many exclusions, a collision damage waiver may provide the extra protection you need. You may be able to walk away from damage without paying a deductible or filing a claim. On the other hand, car insurance that extends to rental cars can offer wider coverage if you’re at fault for any reason.
Consider using multiple options if you’re looking for broad coverage. That way you have the least chance of paying for damage out of pocket.
How much does a collision damage waiver cost?
A typical collision damage waiver can cost you an extra $10 to $30 per day. Although this cost can significantly increase your car rental cost, weigh the benefits of buying this coverage:
- The rental car company will recover costs through its own insurance.
- You won’t pay a deductible for car damage.
- You likely won’t deal with the paperwork of filing a claim.
- You might avoid increasing your car insurance rates.
What does it exclude?
Exclusions to the damage waiver vary by car rental company but may include:
- Damage to someone else’s vehicle or injuries caused to someone else — Liability insurance covers this.
- Damage to the transmission or other systems caused by rough driving
- Deliberate damage
- Driving after taking illegal, prescription or over-the-counter drugs
- Driving in prohibited or restricted areas
- Drive while using a cell phone or another electronic device
- Drunk driving
- Fail to lock up the car and remove keys
- Interior burns or tears
- Offroad driving
- Racing or reckless driving
- Tires or wheels, headlights, battery or glass damage
- Towing or pushing objects or vehicles
- Unauthorized driver
- Underbody damage if the car scrapes the road or earth
- Using the wrong fuel type
- Water damage
- Any other breaches of the rental agreement
Where can I get a collision damage waiver?
You can find coverage for your rental car in several places:
- Rental car company. You might go with the rental car company if you don’t have much coverage on your own car, such as liability-only or low liability limits. Or you might not want the hassle or increased rates if you file with your own insurance.
- Your credit card company. Your credit card may offer limited coverage for collision damage to a rental car. The best coverage includes coverage for full replacement cost, towing and loss of use for the rental company. Otherwise, you might consider supplementing this coverage.
- Your car insurance policy. Some policies extend some or all of your coverage to your rental car. However, look for important exclusions that may leave you paying out of pocket.
- A travel insurance policy. You could shop around for your own supplemental insurance that provides similar coverage as the rental car company. Plus it may come with trip interruption or cancellation benefits.
Compare travel insurance quotes with collition damage waiver
Bottom line
You might opt for the collision damage waiver if you don’t have enough coverage from your current car insurance or credit card company. It can also relieve you of the stress involved with filing a claim yourself if you damage does happen to your rental. However, consider coverage from travel insurance since you could get extra coverage for your trip along the way.
Frequently asked questions about collision damage waivers
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