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What is CDW Insurance and What Does it Cover?

When you're driving a rental vehicle, it's crucial to ensure that you're financially protected if things go wrong. One vital piece of financial protection is a Collision Damage Waiver (CDW).

In this guide, we’ll comprehensively break down what CDW insurance is and how it affects you when you hire a car.

What is a Collision Damage Waiver (CDW)?

A Collision Damage Waiver is a document that reduces your liability for damages to a rental vehicle. It can come into effect if your vehicle is damaged in an event like a car accident.

A policy might be referred to as a "Collision Damage Waiver" while also providing cover if your vehicle is stolen. A policy that includes theft protection is more commonly known as a Loss Damage Waiver (LDW).

A CDW is not strictly "insurance". It's actually a document that transfers the risk of financial loss of damages to the rental company. Your car rental company waives the right to hold you liable for vehicle damages, to a limited extent.

When you pick up your rental, you will usually be offered a CDW by your car rental company. You may even be told about the significant financial risk you face by not purchasing it from them.

CDW purchased from rental companies does offer cover for damage, and sometimes theft, to your rental vehicle. However, these CDWs also often come with high deductibles, meaning you can face significant out-of-pocket costs in the event of an incident.

You can avoid this hard sell by purchasing a RentalCover policy ahead of time. Our cover is 50% cheaper than rental companies†, with zero deductible to pay when things go wrong. Plus, our rental car coverage goes beyond what many rental companies offer, with cover for flat tires, windscreen damage and much more.

What do Collision Damage Waivers cover?

Collision Damage Waivers can look different depending on where you purchase them. A typical CDW from a car rental company or credit card company might cover the following:

  • Single vehicle accidents.

  • Theft or loss protection.

  • Optional extras like scratches and bumps to the main body of a vehicle.

Make sure you carefully examine any policy before signing up so you know exactly what you're covered for.

Other rental car damage coverage providers tend to go further with their coverage. For example, RentalCover includes the following cover in all policies:

  • Single & Multi-vehicle vehicle accidents.

  • Full fire, theft and vandalism cover.

  • Towing.

  • Lockout.

  • Car key cover.

  • Windscreens.

  • Headlights.

  • Tyres.

  • Underbody damages.

  • Unlimited additional drivers.

We offer our best coverage on a single plan, with no extras and no add-ons. Keep your cover simple and enjoy traveling in a rental car with peace of mind.

What do Collision Damage Waivers not cover?

It's crucial to understand where your CDW doesn't cover you. Typical exclusions are:

  • Damage to another vehicle.

  • If an accident results in injuries.

These sit outside of the scope of a CDW.

There are some other common CDW exclusions when it comes to rental car companies and credit cards that you can be covered for with RentalCover. This includes:

  • Towing, lockouts, keys, windscreens and headlights are available as automatic inclusions in a RentalCover policy, rather than as optional extras.

  • Multi-vehicle vehicle accidents.

  • Tyres and underbody damage.

Travel in comfort knowing you have more cover. RentalCover offers comprehensive protection that's cheaper than car rental companies. Plus, when you make a claim, your deductible is $0.

Is a Collision Damage Waiver worth it?

It's highly recommended to purchase a coverage policy when you hire a rental car. However, that doesn't mean you need to accept the Collision Damage Waiver offered at the pick-up counter.

If you have a policy from a provider like RentalCover, you can decline the CDW your rental company offers. With our policy, you get cover that's 50% cheaper than what's offered by the rental companies†. Our cover also fills in gaps in areas like single-vehicle accidents, underbody damage and much more.

 

Best of all, your deductible is $0 in the event of a claim. Our policies are a cost-effective way to ensure you can enjoy your travels with peace of mind.

What is a Super Collision Damage Waiver?

A Super Collision Damage Waiver (SCDW) is a product sold by rental companies at the rental desk. It's a more "premium" version of a CDW, which, in most cases, reduces your deductible to zero. However, additional fees for towing and loss of use can still apply.

SCDWs also cover you for most exclusions of a CDW policy.

While reducing your deductible is an appealing prospect, SCDW policies don't necessarily offer the best value for money. RentalCover offers a more affordable option, with $0 to pay in the event of an accident.

How do Collision Damage Waivers differ from Loss Damage Waivers?

The major difference between Collision Damage Waivers and Loss Damage Waivers is with regard to theft protection. "Collision Damage Waiver" often refers to a policy that covers damage to a vehicle, but not theft.

"Loss Damage Waiver" covers both damage to the vehicle and loss of the vehicle through theft. Outside of the United States and Canada, these policies are often packaged together.

Cover your rental vehicle with RentalCover

With RentalCover, you can get superior cover compared to what hire car companies offer, while paying 50% less†. Plus, you'll have no deductible to pay in the event of an incident.

Choosing our policy for your next journey is a no-brainer. Get comprehensive cover and avoid hard sells at the rental desk with RentalCover today.

Hear from our rental car insurance expert

"It can be tempting to simply go with the Collision Damage Waiver your rental company offers you. However, it often isn't the best option for many customers.

RentalCover offers more comprehensive cover at a more affordable price than many car rental companies. That's why it's important to conduct in-depth research and find the best policy for your needs."

Frequently asked questions

How do Collision Damage Waivers work?

In the United States and Canada, Collision Damage Waivers are a form of cover that provides protection if your vehicle is damaged. They can also extend to offering theft protection, too.

CDWs can be offered by car rental companies at the rental desk. Similar coverage is also offered by other providers, like credit cards.

Dedicated, specialized providers like RentalCover offer policies that allow you to reject the cover offered by your rental company. Our policies are typically more affordable and more comprehensive than a Collision Damage Waiver.

CDWs come into effect when an incident occurs with your rental vehicle. If you have coverage with your rental company, they'll file a claim and charge you a deductible cost. You might also have to pay additional administrative fees.

If you have a RentalCover policy, you can file an online claim with us after you're charged by your rental company for the damage or loss. 98% of claims are paid out within 3 days, in any currency.

How do you file a claim for a collision in a rental car?

Filing a claim for a collision in a rental car depends on the type of coverage you have. If you have purchased insurance from the rental company, they'll usually handle it internally, charging you a deductible as well as any associated fees.

If your cover comes from a different source, like a credit card, you usually need to file a claim with other relevant insurance providers before being eventually reimbursed by your credit card.

For RentalCover customers, we process your payout after you are charged by your rental company and you submit an online claim. We’ll ask you to provide relevant documents like a copy of your rental vehicle agreement, a photo of your driver’s license, a repair invoice and any other evidence we require. We may also have a few follow-up questions to ask you before organizing your reimbursement.