Understanding Collision Damage Waiver (CDW) The Pros and Cons for Rental Car Insurance

What Is Collision Waiver Damage

When renting a car, you may be asked if you want to purchase a Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW). CDW insurance covers damage to the rental car in the event of a collision. While CDW can provide peace of mind, it can also add to the cost of renting a car. In this article, we’ll dive into the pros and cons of CDW and help you make an informed decision.

What is Collision Damage Waiver (CDW)?

CDW is an optional insurance policy that can be purchased when renting a car. CDW covers damage to the rental car in case of a collision, theft, or vandalism. In most cases, CDW is not included in the rental price and must be purchased separately.

Pros of CDW

  1. Peace of mind: With CDW, you won’t have to worry about paying for damage to the rental car in the event of a collision.
  2. Protection from liability: CDW can protect you from being held liable for damage to the rental car.
  3. Convenience: If you have CDW, you can return the car and walk away without worrying about paying for the damage.

Cons of CDW

  1. Cost: CDW can add to the cost of renting a car, sometimes significantly.
  2. Limited coverage: CDW may not cover all types of damage, such as damage to the tires or undercarriage of the car.
  3. Deductibles: Even with CDW, you may still be responsible for paying a deductible in the event of a collision.

Loss Damage Waiver (LDW) vs. Collision Damage Waiver (CDW)

LDW is another type of insurance often offered when renting a car. LDW covers collision damage and theft, while CDW only covers collision damage. LDW is typically more expensive than CDW but offers more comprehensive coverage.

Pros of LDW

  1. Comprehensive coverage: LDW covers collision damage and theft, providing more comprehensive coverage than CDW.
  2. Peace of mind: With LDW, you won’t have to worry about paying for damage to the rental car in case of a collision or theft.

Cons of LDW

  1. Cost: LDW is typically more expensive than CDW, adding to the cost of renting a car.
  2. Limited coverage: LDW may not cover all types of damage, such as damage to the tires or undercarriage of the car.
  3. Deductibles: Even with LDW, you may still be responsible for paying a deductible in the event of a collision or theft.

Credit Card Rental Car Insurance

Some credit cards offer rental car insurance as a benefit. This insurance may cover damage to the rental car, theft, or even personal injury in the event of an accident. However, credit card rental car insurance can be complicated and may not offer the same level of coverage as CDW or LDW.

Pros of credit card rental car insurance:

  1. Cost savings: If your credit card offers rental car insurance as a benefit, you may be able to save money by not purchasing CDW or LDW.
  2. Convenience: If you already have a credit card that offers rental car insurance, you don’t need to purchase additional insurance when renting a car.

Cons of credit card rental car insurance:

  1. Limited coverage: Credit card rental car insurance may not cover all types of damage, and may not provide the same level of protection as CDW or LDW.
  2. Exclusions: Some credit card rental car insurance policies have exclusions and limitations, such as restrictions on the types of rental cars covered.
  3. Claims process: Filing a credit card rental car insurance claim can be more complicated than filing a claim with CDW or LDW.

Should You Purchase Collision Damage Waiver (CDW)?

After considering the pros and cons of CDW, you may be wondering whether it’s worth purchasing. The answer depends on a few factors, such as the cost of CDW, the type of rental car you’re getting, and your level of risk tolerance.

If you’re renting a high-end or luxury car, CDW may be more expensive, but it can offer more peace of mind in case of an accident. On the other hand, if you’re renting a cheaper car and already covered by your auto insurance policy, you may not need CDW.

Ultimately, purchasing CDW should be based on your risk tolerance and budget.

Conclusion

Collision Damage Waiver (CDW) can provide valuable protection when renting a car, but it has pros and cons. While CDW can provide peace of mind, it can also add to the cost of renting a car and may not cover all types of damage. Before deciding whether to purchase CDW, consider the cost, the type of rental car, and your level of risk tolerance.

Steven Reilly is a qualified mechanic and his passion for cars goes beyond just the technical aspects. He is also an amateur racer and all round car enthusiast. When he is not driving them, he can often be found in his garage under the hood of a rare model. Steven Reilly has lost track of the number of hours he has spent setting up his fine collection of rebuilt models. He believes that cars can provide a constructive and fun opportunity to teach the youth important life skills. In line with this, he is developing a community outreach program, potentially dubbed ‘Cars for change'.