What is CDW Collision Damage Waiver Insurance?
Before you agree to buy any type of insurance, you should make sure you fully understand what you are signing up for. Sometimes a rental company will ask you to purchase Collision Damage Waiver (or CDW) or Loss Damage Waiver (or LDW). Then, What does this insurance really cover and what do you have to pay? The simple answer is that these coverages will require a specific amount to be paid each day you have the rental car in your possession, and in return, you will receive a reduced deductible payment in case the car is damaged or stolen. The long answer is that the amount this will cost you varies wildly.
The cost usually depends on the type of car you rent and also your location. There are some countries, such as Ireland, that require you to purchase CDW insurance in order to rent a car. Otherwise, you may be required to provide proof of equivalent or alternative coverage. Taking out CDW coverage can sometimes increase the total cost of your car rental by 25 percent, or maybe even more.
What does it really cover?
This can vary from one rental company to another, so always make sure you have carefully read and fully understand the policy you might be purchasing. Most of the time, a collision damage waiver covers the body of the car and any damage that occurs. However, while it ensures that if your car’s body is damaged, you won’t have to shell out excessive amounts of cash, there are usually a large number of parts and components that it does not cover.
CDW coverage often excludes:
- windows and mirrors
- engine
- car undercarriage
- Inside
- flat battery
- wheels and tires
- personal items
- Lost keys
- extras, such as child seats, luggage racks or GPS
- any towing charges.
Some car rental companies can be quite misleading with your CDW insurance; For example, they can cover the outer shell of the rearview mirror (the part that is the same color as the car body) but refuse to cover the actual glass of the mirror. or the mechanism that allows the user to adjust the position of the entire mirror. In addition to this, some insurances will cover the roof of the car, while others will not. Pretty stingy, right?
Will the Collision Damage Waiver cover all repair costs?
The short answer to this is no, Collision Damage Waiver coverage generally does not cover all repair costs. Like most rental car insurance, CDW coverage often includes an excess or deductible. This is the maximum amount the person renting a car will have to pay for body repairs. Often this is between $600 (or £500) and $3,500 (or £3,500). If any other part of the car is damaged, the renter will generally have to pay the full cost of the repairs.
It’s worth it?
It’s hard to come to a conclusion on this that appeals to everyone in every situation; You will have to weigh the pros and cons. For one, investing in CDW insurance will definitely save you money in the long run if the rental car breaks down. If the rental car breaks down and you haven’t taken out CDW, you probably owe the rental service a large amount of money. The deductible cost of the rental car could be in the thousands of dollars, and you may also be required to pay for lost income while the car is being repaired. Oh!
It seems that taking out Collision Damage Waiver coverage might be worth it for a long-distance trip, however, it can be incredibly expensive. In fact, it could double the total cost of the rental. If you are an experienced driver and are only traveling a short distance, you may not invest in CDW. However, you must make your own judgment. You may save money in the short term, but if you are in an accident, you could end up spending even more. It’s a good idea to make sure you’ve read the car rental company’s agreement from cover to cover to make an informed decision about whether to purchase Collision Damage Waiver coverage.
How to save money on your rental car insurance
You may have decided you don’t want to pay the premium price for collision damage waiver insurance, however when renting a car, deceptive sellers can build up the pressure and make you feel compelled to invest in add-ons you don’t use. I really don’t want to. However, there are alternatives to purchasing CDW coverage, which we have set out, which can be extremely expensive.
Some other types of coverages come with Theft Protection, which covers the car if it is stolen or damaged when someone tries to steal it, and Liability Coverage, which covers damage done to other people’s property or belongings. Check out some of the alternatives to CDW covers you can buy.
Car insurance
Your auto insurance policy may include coverage for damage to any rental car you hire. In fact, there are some states in the United States, such as Maryland, that require auto insurance to provide this type of coverage. Read your policy carefully to look for clauses to this effect, go online or call them by phone to find out what coverage you have. Keep an eye out for excluded areas like Ireland and other areas outside of the United States – you don’t want to get caught and end up wasting even more cash!
If you find out that your auto insurance does cover damage to rental cars, don’t be pressured into buying Collision Damage Waiver coverage because you don’t need it.
Credit card
This may come as a surprise to some, but your credit card could help with your rental car insurance! This is because some credit card companies may offer you CDW insurance. However, be aware of the individual exclusions for your area and where you are traveling. For example, some companies will only cover areas in the United States and will exclude certain countries. Also, most credit card companies in Ireland do not cover cars, however American Express recently in July 2017 included Ireland in their list of countries that are covered. If you opt for this, make sure you have fully read the terms and conditions before renting the car, you don’t want to miss out on vital information.
travel insurance providers
Travel insurance is a must for anyone traveling long distance, but did you know that you could purchase an alternative version of CDW insurance while insuring your trip? Many travel insurance companies will offer users the option to purchase car rental damage coverage as an alternative to the collision damage waiver coverage your car rental company is likely to try to sell you. RVD coverage is very similar to CDW, however it will generally only be applicable in certain situations such as natural disasters, theft, collision and riots. Other cases, such as the driver exceeding the legal alcohol limit and damaging the car, will not be covered by the rental vehicle coverage. Additionally, some rental vehicles, such as motorcycles, caravans, and vans, may be excluded.
Rental vehicle damage insurance generally cannot be purchased on its own and is often included in a travel insurance package. Sometimes this can be better value for money, but always be sure to weigh the options. There are many different companies where you can receive a quote for travel insurance directly from a subscriber such as Travelex, HTH Worldwide, Travel Guard and MH Ross. Or, take a look at an online insurance aggregator to make your life easier. Insure My Trip, Square Mouth, and Travel Insurance are all great websites to visit. As always, be sure to read the travel insurance policy carefully and check for any exclusions before purchasing.
Look for special offers
Car rental companies make a lot of their profits by selling add-ons to your rental package, which can get ridiculously expensive, meaning you’ll end up paying a lot more than you bargained for. However, with a little research, you can find great deals and save a lot of money, so you can spend more on your trip! Check out reputable online agents, such as those that may end up saving you just as much as going direct.
Also take a look at some of the larger car rental companies such as Hertz, Sixt, Budget and Avis. These often offer users special discounts and deals on different coverage packages, so while it may take some time to find the best price, it’s definitely worth searching and searching for the best deals.
Collision Damage Waiver Coverage Pros and Cons
Every personal situation is different and you must make a decision that makes you feel safe and comfortable. If you drive a short distance and don’t feel like you need CDW insurance, don’t let a salesperson put you in a high-pressure state where you’re forced to buy something you don’t need. On the other hand, sometimes Collision Damage Waiver may be completely necessary.
Pros
- Peace of mind
When you purchase CDW coverage, you are protected against most incidents and accidents, and this means you won’t have to pay as large an amount if your rental is damaged while traveling. You can travel relatively worry-free, safe in the knowledge that if something were to happen to your rental car, the huge payment won’t fall entirely on your shoulders.
- Protected from other drivers
As long as you haven’t voided the agreement for drinking over the limit while driving your rental car, for most collision damage waiver insurance, you’re covered for just about anything that can happen to the body of your car, including bad drivers. Unfortunately, inconsiderate and dangerous drivers are an unavoidable part of driving, and when you’re using a rental car, this can be even more worrisome. However, when you have purchased Collision Damage Waiver coverage, the anxiety of this lessens. Potentially, you could return the car in completely whole condition and still be safe from the excess cost you would be expected to pay without CDW insurance.
Cons
- Very expensive
Your wallet is sure to take a beating if you decide to go with CDW, as it can sometimes end up costing you twice what you expected to pay for your car rental. While it is true that if you were to damage the rental car you would have to shell out a large amount of money in loss of use of the car, the initial cost can be quite staggering.
- Unnecessary in some situations
You may be pressured into buying collision damage waiver coverage that you don’t really need. For example, if you’re going on a short road trip, it might be worth investing in CDW coverage. In addition to this, if you are an experienced motorist who has been driving for many years, you are less likely to have an accident or damage the car. That’s not to say it can’t happen, but the chance is less than for a new driver unfamiliar with the rental car.
When it comes to purchasing Collision Damage Waiver coverage, it’s important to make sure you read the agreement carefully before committing to it. Be aware of what is covered and what is not. Evaluate your options carefully, so you don’t end up investing in something you don’t really need.
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