Collision Damage Waiver (CDW) – Is Rental Car Insurance Worth It?

If you own a car then it is certain that you also have car insurance on it and a rented car is covered within the same policy. Then why it is important to buy collision damage waiver or Loss Damage Waiver (LDW) at a car rental agency? Honestly, to give you a straight answer in Yes or No will dilute the essence of discussing this topic as the answer depends on many uncontrollable factors. What I mean here is, when we talk about accidents we are talking about risk and hence insurance comes into picture. Having said that, no one can completely avoid accidents. We can only reduce the risk by following traffic norms and driving safely irrespective of the car, which can be owned or rented. Collision damage waiver is not about keeping your car insurance triggered. It is more about knowing who will be responsible to pay for damages in case an accident occurs in a rented car. If you do not have a full coverage auto insurance policy, then any which ways you will not be protected for collisions and damages.


Top Reasons Why Collision Damage Waiver Makes Sense

Generally, there is no need of buying CDW from your car rental company if you‘re already having a car insurance from your own auto insurer. Having said that, there are a few benefits which we will see below:


  • As we discussed earlier, accidents cannot be completely avoided. Hence in case you end up bashing your rented car and you did pay extra money on per day basis to avail collision damage waiver then your own car insurance company will never find out about the accident. So chances of your rates being increased will be negligible.
  • Second reason why it makes sense to pay that extra $10 per day for collision damage waiver is that if you are involved in an accident while driving a rented car and you did not opt for CDW then be prepared for enormous amount of paperwork. Dealing with your own car insurance company and at the same time negotiating with the car rental provider will not be an easy task. It will cost time and in most cases money as well. If you had chosen for collision damage waiver through the car rental company then you need not worry about all the hassle of paperwork and other formalities. You just sign few documents and rest is taken care off by the insurance company.
  • When you purchase CDW, you have peace of mind. You have zero liability on your head if accident occurs.  If you do not choose CDW, you will have to bear the responsibility of any damages which may happen.
  • When you rent a car, it is important to read the terms of the rental agreement. When you do, you will find that it is clearly stated in the terms and conditions that in case of any damage you will be held responsible. So, it is all the more important to have CDW when you rent a car.
  • In many cases, if you are using your credit card to pay for the rental service, then your credit card company will offer rental insurance automatically. Once such example is here. So, you may not be paying anything extra.
  • Now your own auto insurance policy and using a credit card to pay for your rented car is a good way to ensure that you have sufficient coverage, there could be various situations where the existing coverage may fall short. Like your current policy or your credit card coverage will not provide coverage for towing the vehicle, loss of use( period in which rented car is out of service) and other administrative fees.


Few things To Keep In Mind When You Purchase

Collision Damage Waiver

Your rental car collision damage waiver will not pay for any property damage, personal injury or any liability. So it is not a liability or medical coverage. It only provides coverage for any repairs to be done on the physical damage done to the rented car. CDW serves as a supplemental insurance coverage and by choosing to avail this facility you will be able to transfer the risk from yourself to the car rental company.

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