What is CDW insurance and what does it cover?

A Collision Damage Waiver (CDW) limits what you owe the rental company if your rental car is damaged. Strictly speaking, it isn't insurance. It moves the risk of financial loss from you to the rental company, and you usually still pay an excess.

At a glance

• What it is: an agreement from the rental company that reduces your liability for damage to the car.
• What it covers: typically single-vehicle accidents, theft or loss, and scratches and bumps to the main body of the car.
• What's the catch: CDWs often come with a high excess, and many items are excluded.
• The alternative: buy RentalCover before you travel and decline the CDW at the desk. You pay 50% less† and $0 excess if you claim.

A Collision Damage Waiver is an agreement that reduces your liability for damage to a rental car. It comes into effect if the car is damaged in an event like an accident.

A CDW that also covers theft is more commonly called a Loss Damage Waiver (LDW). It isn't strictly insurance. It transfers the risk of financial loss from you to the rental company, and the company can still hold you liable for damage to a limited extent.

Rental companies usually offer a CDW at the pick-up desk, and staff may stress the financial risk of declining it. CDWs from rental companies cover damage, and sometimes theft, but they often come with a high excess (called the deductible in the US). That means you can still face significant out-of-pocket costs if you claim.

You can avoid the hard sell by buying a RentalCover policy ahead of time. Our cover costs 50% less than rental companies†, and you pay $0 excess when things go wrong. We also cover more than many rental companies do, including flat tyres and windscreen damage.

CDWs differ depending on where you buy them. A typical CDW from a rental company or credit card provider might cover:

• Single-vehicle accidents
• Theft or loss
• Scratches and bumps to the main body of the car

Read any policy carefully before you sign up, so you know exactly what you're covered for.

RentalCover goes further. RentalCover protection includes:

• Single and multi-vehicle accidents
• Fire, theft and vandalism
• Towing
• Lockouts
• Car keys
• Windscreens
• Headlights
• Tyres
• Underbody damage
• Unlimited additional drivers

We offer our best cover on a single plan, with no extras and no add-ons. Keep your cover simple and enjoy your trip.

A CDW doesn't cover damage to another vehicle or injuries from an accident. These sit outside the scope of a CDW.

Rental company and credit card CDWs also commonly exclude things that RentalCover includes as standard:

• Towing, lockouts, keys, windscreens and headlights
• Multi-vehicle accidents
• Tyres and underbody damage

With RentalCover you get more cover for less than rental companies charge, and your excess is $0 if you claim.

A Super Collision Damage Waiver (SCDW) is a premium version of a CDW, sold by rental companies at the desk. In most cases, it reduces your excess to $0, and it also covers most of what a CDW excludes. You can still pay extra fees for towing and loss of use.

An SCDW costs more, so it isn't always the best value. RentalCover is a more affordable option, with $0 excess if you claim.

The main difference is theft. A CDW often refers to cover for damage to the car, but not theft. An LDW covers both damage and loss of the car through theft. Outside the US and Canada, the two are often packaged together.

Read more about the difference between a CDW and an LDW.

We recommend having a cover policy when you hire a car. But you don't have to accept the CDW 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. Our cover costs 50% less than the rental companies†, and it fills gaps like single-vehicle accidents and underbody damage. If you claim, your excess is $0.

Get a quote before you travel, so you can say no to the CDW at the desk and yes to RentalCover.

"It can be tempting to go with the CDW your rental company offers. But it often isn't the best option. RentalCover offers more comprehensive cover at a lower price than many rental companies, so it's worth finding the best policy for your needs."