When you rent a car, you’ll be asked if you want to purchase optional coverage called Collision Damage Waiver (CDW). this insurance covers damage to the rental car. It can be an expensive proposition, but it may be worth buying, depending on your own auto insurance and credit card coverage.
a cdw covers rental car repair bills if there is an accident or if the car is stolen. is a good option if you don’t have:
- your own car insurance
- a credit card with rental car coverage that you use to pay the rental
- a third-party rental car insurance policy
- You just want to make sure you are not responsible for any additional charges due to vehicle damage.
- You don’t want the hassle of identifying coverage gaps in your auto insurance and credit card coverage.
- You have auto insurance but don’t want to risk your insurance rates going up if there’s an accident with your rental car.
- You don’t want to pay for any damage out of pocket and then have to wait for a credit card company or auto insurance company to reimburse you.
- loss of use. this is rental money lost while the car is being repaired.
- towing. If you are unable to drive the car after the accident, you may be charged for the towing.
- diminished value. this is the decrease in the value of the car even after the repairs have been made.
- administrative fees. additional costs associated with the claims process.
- some credit cards only offer coverage in the united states. You will need a card that covers international locations if you rent a car abroad.
- Most credit cards have secondary insurance for rental cars. this means the credit card company only pays the amount not covered by your auto insurance policy.
- credit card rental collision coverage may not pay for decreased damaged rental value.
- Compensation for lost usage revenue is typically dependent on the rental company providing fleet registration documentation, and your rental company may not respond in a timely manner.
- You may need to pay the rental company up front for the damage and then request reimbursement from your credit card company.
- the credit card may not cover the administrative costs of the rental company.
- Liability insurance pays for damage you cause to another vehicle or other people’s property if you are at fault in an accident.
- Your collision coverage may extend to rental car damage.
- Your comprehensive insurance may extend to rental cars that are stolen or damaged by fire, flood, vandalism, or other issues.
- Your rates may increase if you file an insurance claim.
- You will have to pay a deductible if you file a claim for comprehensive or collision coverage. An insurance deductible is the amount deducted from an insurance claims check.
- You probably won’t pay for the decreased value.
- you will likely pay the loss of use to the rental company.
- You may not pay for the tow.
- You probably won’t pay administrative fees.
- refuse insurance coverage from the rental car company if you have a separate rental car insurance policy.
- Coverage under an independent rental car insurance policy could include roadside assistance, cracked windshields, lost keys, flat tires, and towing.
- An independent car rental company may not cover all vehicles, such as luxury cars, vans, and motorhomes.
- A policy may provide collision coverage for the rental vehicle, but may not cover bodily injury. check with your own auto insurance company to see if they offer that coverage.
- Separate rental car insurance policies have coverage limits, so one policy may not cover all damage if you have a costly accident.
- A separate rental car insurance policy may not cover you outside of the us. uu. and Canada.
- a collision damage waiver of up to $50,000 in damages
- coverage for trip interruption, such as a non-refundable hotel room you never get to due to an accident
- baggage loss and damage
- a 24/7 hotline for help
It may also be worth considering a cdw if:
If you decline a cdw, the rental car company may charge you more than the car repairs. They also usually charge for:
While your own insurance or credit card coverage may pay for some of these costs, expenses can vary by company. and, in some cases, you must have the cooperation of the car rental company.
how does a cdw work and how much does it cost?
Rental companies often offer a cdw when you make an online reservation for a rental car and again when you pick up the vehicle. When you buy a CDW, the car rental company waives the right to charge you for damage to the rental car. but there are usually some exceptions, for example, for damaged tires and side mirrors, or for “gross negligence,” which means you were speeding, running, or driving while intoxicated. the names used for cdws vary. so study the details carefully before signing.
the cost of a cdw is usually around $30 per day. That means you can increase your rental cost by around $200 a week. Car rental companies can make a profit from selling CDWs, so it’s common for staff to be pushy when introducing them to customers.
weighting options for a collision damage waiver
You have other options besides buying a cdw from a car rental company. here are possible alternatives to buying cdw coverage.
Many credit cards provide rental car insurance as a benefit, as long as you use the card to pay your rental. While you won’t pay more for the benefit, it’s important to be aware of the limitations that may come with your card’s auto rental coverage. Here are some key considerations:
If you have auto insurance on your own vehicle, it generally extends to rentals and property damage you cause, and covers liability up to your policy limits:
Consider, however, that if you use your own insurance coverage:
independent rental car insurance
Another way to get coverage is to purchase a separate rental car insurance policy. Coverage varies and there are often exclusions, so be sure to read the fine print and understand what is covered and what is excluded.
Here’s what you need to know about getting a separate rental car insurance policy:
travel insurance with rental car coverage
You may be able to purchase rental car damage coverage from a travel insurance company when you insure your trip. if you choose this option, you may not need the cdw offered by the car rental company.
Certain rental vehicles are generally excluded from coverage, such as motorcycles, vans, and motor homes.
Buying car rental coverage from a travel insurance company can also have some useful additional perks. for example, the onetrip rent car protector plan from allianz global assistance includes:
what happens if you don’t get a collision damage waiver?
If you don’t have insurance coverage and your rental car is in an accident or stolen, you’ll have to pay out of pocket to cover the loss. This will be an expensive proposition, so consider your options carefully before declining CDW coverage when you have no other applicable coverage.