Collision Damage Waiver in Rental Cars: Understanding Your Options


June 17, 2023

Reading Time:- 6 minutes

Collision Damage Waiver in Rental Car

If you have rented a vehicle earlier, you may be offered the option to purchase Collision Damage Waiver in Rental Car. This can be purchased from the rental car company.

But before that, you may know what exactly CDW is. And why do you really need it? In this guide, we are discussing the advantages and disadvantages of CDW.

Also, it helps you understand your options related to rental car insurance. So, for further details, keep reading the guide thoroughly.

What is Collision Damage Waiver?

CDW is also known as Loss Damage Waiver. It is determined as an optional insurance coverage offered by rental car companies. This insurance coverage protects you from financial responsibility for the damage to the rental car.

Besides, it also covers the cost of replacing or repairing a rental car. This usually happens in case of an accident or other damage, such as vandalism or theft.

Coverage provided by Collision Damage Waiver

CDW covers damage to the rental car. This includes accidents, theft, and vandalism. But remember that the coverage may have some limitations and exclusions. This can be the damage caused by driving under the influence of off-road driving, drugs or alcohol, or on unpaved roads. Thus, it’s very important to carefully read the rental car company’s policy before renting a car. Also, you need to understand what is and is not covered by the CDW.

Factors to consider when deciding whether to purchase Collision Damage Waiver

If you are planning to purchase CDW, it might not be easy because it adds to your rental car expenses. Given below are some points that you need to keep in mind while purchasing CDW:

1.   Your personal auto insurance or credit card coverage

Many rental car coverages offer personal auto insurance policies and credit cards. This coverage can provide some or all of the same coverage as CDW. Thus, you must check your insurance provider or Credit Card Company before purchasing it. Also, you need to know what is covered and have any limitations or exclusions.

2.   Potential financial consequences of declining CDW

You might be responsible for paying for the damage or replacement if you decline Collision Damage Waiver. This can be a consequence of financial burden. This is the case if a damaged rental car is luxury or high-end.

Read Also – Does USAA Cover Rental Cars

How to Purchase Collision Damage Waiver

There are various ways that you need to go through if you want to purchase CDW:

1.   Through the rental car company

At the time of rental, most rental car companies offer CDW. This can be an optional add-on or part of a package. Usually, the cost of collision damage waiver can differ. It depends on the type of car you are renting and on the rental car company.

2.   From a third-party provider

At present, third-party companies offer rental car insurance, including CDW. However, these providers offer more comprehensive coverage or lower rates than the rental car company. Due to these reasons, it’s important to read the rental company policy carefully. And also know what is covered and what are its limitations or exclusions.

How to Use Collision Damage Waiver

You need to take some steps if you are involved in an accident or the rental car is stolen:

1.   Contact the rental car company

Inform the rental car company immediately if you have met with an accident. Doing this can save you as well as others who are involved in such incidents. They will provide you with instructions that you need to follow. You need to collect necessary information such as witness statements or police reports.

2.   Verify the CDW coverage

Once you purchase the CDW, confirm with the rental car company that it covers the incident. Also, you must understand any limitations or exclusions that may apply to the coverage.

3.   File a claim

You can also file a claim regarding the rental company if required to receive reimbursements. This you can get for the cost of repairs or replacement of the rental car. But you may know that this action can also be taken if necessary. However, for filing a claim, you need to follow the instructions provided by the rental car company.

Alternatives to Collision Damage Waiver

Other types of insurance are also provided by the rental companies that provide coverage. Some alternatives to collision damage waiver are prescribed below:

1.   Liability insurance

Not all, but some rental car companies offer liability insurance. This insurance covers injury to others or damage in an accident. In some states, this coverage may be required by law. Thus, it’s important to check the requirements in the state where you rent the car.

2.   Personal accident insurance

This insurance cover death benefits and medical expenses in the case of an accident. If you already have health insurance, then this coverage may be inessential. Besides, it also covers other accident coverage.

3.   Credit card rental car coverage

As a benefit, many credit cards offer rental car coverage. This insurance coverage can provide some or all of the same coverage as CDW. But, the coverage may have exclusions or limitations. This includes the length of the rental period and restrictions on the type of vehicle covered.

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Whether to rely on your auto insurance

Instead of purchasing CDW, you may depend on this coverage if you have personal auto insurance. Thus, it’s important to know the limitations and exclusions of your insurance policy. Also, you will see any applicable deductibles or other costs. Moreover, when you pick up the car, you must show proof of insurance to the rental company.


Before renting a car, Collison Damage Waiver In Rental Car is provided by the rental company. However, it can protect you while renting a vehicle. But, before purchasing it, it’s important to understand your options and the limitations of the coverage. If you plan to purchase CDW, read the company’s policy carefully. Lastly, share your experience in the sections below after reading the post.


What does the collision damage waiver include mean?

CDW is extra protection that decreases your liability for damage. This happens if your hire car is damaged or stolen. Usually, you agree to an excessive fee. You will receive the total cost of repairs.

What is the difference between CDW and LDW?

If there is damage to a rental car through an accident Collision Damage Waiver provides cover. In contrast, LDW is a merger of CDW and Theft Protection. It means you will be covered for car replacement if your rental car is stolen during the rental period.

Does the collision damage waiver cover scratch?

The damages covered by the Damage Waiver are scratches, dents, or a chipped windshield. It is an optional protection that you can purchase with your rental company.

What is the collision damage waiver budget?

If the vehicle is damaged, Collision Damage Waiver reduces your liability. Thus, you must pay the repair cost up to the excess amount. In most rates sold on Budget websites, CDW is included.

Category: Car Rental Tips


Write By

My name is Alicia Smith, and I am the editor of the well-known informational website for Car rentals,

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