Damage Waiver
Collision Damage Waiver

Damage waiver (DW) or, as it is often referred to, collision damage waiver (CDW) or loss damage waiver (LDW) is the optional coverage that a rental car company offers to cover your financial responsibility for any physical or structural damage to the rental vehicle during your rental period.

When renting a vehicle, the renter is typically responsible for any damage that occurs to the vehicle, whether it is their fault or not. Purchasing CDW helps waive or limit the renter’s financial liability for damage to the rental car from collisions, theft, vandalism, natural disasters or other covered incidents. It also covers loss of use while the vehicle is being repaired.

Though it is not mandatory, CDW is highly recommended to protect yourself from potentially high out-of-pocket repair or replacement costs. It costs an additional daily fee, but provides great peace of mind for the renter in case of an accident or incident. Renters should understand that most credit cards and auto insurance policies may also provide coverage. So be sure to check if you have duplicate coverage before purchasing CDW, which may be considered secondary insurance in some cases.

In summary, collision damage waiver transfers the financial responsibility for damage to the rental vehicle from the renter back to the rental company. While adding cost to a rental, it caps your liability if the worst should occur when driving a rental car.


Damage Waiver and Liability Coverage

  • Risks addressed: Liability for damages to property or injuries, collision, theft, and other damage
  • Coverage limitations: Deductibles and limits on coverage
  • Rental company requirements: Coverage may be required if renter lacks proof of coverage elsewhere
  • Minimum liability insurance: Some US car rental companies include it in the basic rental charge
  • Liability insurance by Hertz and Avis: Included in most states, with exceptions
  • Additional liability insurance: Offered by some car rental companies
  • Canada’s requirement: Minimum third-party liability insurance for all auto rentals
  • Fixed cost of rental: Premium for third-party liability insurance included in the rental cost

Damage Waiver Coverage

  • Accidental damage and towing: Covered by the rental company’s damage waiver
  • Additional coverage: Theft, vandalism, loss of use, and liability may also be covered
  • Choice of coverages: Renters can choose different coverages for different fees
  • Coverage limitations: Deductibles and limits on coverage
  • Descriptions from rental companies: Detailed information available on rental company websites

Credit Card Coverage of Damage Waiver

  • Some credit cards offer insurance for theft or damage to rented cars
  • Primary vs. secondary insurance: Different cards offer different types of coverage
  • Coverage limitations: Duration of rental contracts, exclusions on certain roads
  • Coverage details: Varying coverage for collision, theft, vandalism, and other types of damage
  • Exclusions and limitations: Some cards lack coverage, especially debit cards and low credit limit cards

Coverage Requirements and Limitations

  • Damage waivers can be purchased from the car rental company in most countries
  • Car hire excess insurer: In the UK, damage waivers can be obtained through a car hire excess insurer
  • Travel insurers: Damage waivers can also be obtained through travel insurers
  • Proof of coverage: Required if renter lacks proof of coverage elsewhere
  • Geographic exclusions: Some credit card coverage excludes certain countries

Rental Auto Coverage Details

  • Rental vehicles under the control and possession of the rental company
  • Coverage for transporting property
  • Exclusions: Trucks, large vans, cargo vans, motorcycles, luxury cars, lack of reasonable care, racing, violating law, wear & tear, war
  • Exclusion of large SUVs
  • Coverage details: Price limit for rental vehicles, exclusion of non-manufacturer installed equipment, payment timeline, cost of better coverage
  • Reporting timeline for claims
Collision Damage Waiver
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