Collision Damage Waiver

Collision Damage Waiver is a type of rental car insurance cover that offers financial assistance to car renters in case of damage to the car. The CDW insurance is sold by car rental companies to protect the renter from financial implications when his/her rented car is involved in a collision. Let us understand damage waiver insurance further in the article.

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About Collision Damage Waiver for Rental Cars

A collision damage waiver is an additional insurance cover that car rental customers can purchase to waive off financial liabilities in case of a collision. If the renter has purchased CDW car insurance online, then he will not be liable to pay for the repair of the rented car in case it gets damaged in a collision. 

For example, if you have rented a car with CDW insurance, and it meets with an accident causing damages to its body, the car rental company will provide you with financial assistance against the cost of repairing that damage. The insurer may offer you coverage in full or third party coverage depending on the type of insurance you have purchased. 

What Does CDW Insurance Cover?

If you are planning to rent a car from a car rental company, you must be aware of what collision damage waiver covers so that you can decide whether to purchase the CDW insurance or not. Take a look at what a collision damage waiver usually includes:

• It covers damages on the bodywork of the vehicle like dents and scuffs.
• It provides coverage for theft, fire & vandalism of the rented car.
• It provides coverage for towing expenses.

What is Not Covered under Collision Damage Waiver?

A collision damage waiver insurance does not cover the cost of repairing the damages to the rented car due to the following:

• It does not cover any injuries to the renter in case the traffic accident has been caused due to his/her fault. 
• It will not cover the expenses in case the renter was drunk driving or speeding or off-roading the rental vehicle. 
• It does not cover damages to third-party vehicles, their property or bodily injuries.
• Damages to several car parts, such as tyres, wheels, roof, windscreen, battery and gearbox, are mostly not covered under CDW insurance. 

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Do I Need CDW Car Insurance?

If you want to purchase a car but do not find one under your budget, then renting a car can be a great option for you. It will not only increase your convenience but will save you lots of money. Moreover, if you cover the rented car under CDW insurance, it will financially safeguard you against the cost of repairing any damages due to the collision of the car to a great extent. 

Without purchasing a collision damage waiver, you will be liable to pay for all the damages that your rented car might sustain in case of an accident. This may lead to major financial losses. But if you have CDW insurance, you can don’t have to worry about the cost of repairing the car.

However, if you already have a car insurance policy that provides coverage against damages to rental cars then CDW cover is not required. But if you don’t have a car rental insurance cover, then you can choose to buy such CDW car insurance from the rental company. But before renting a car, make sure to understand what all your CDW covers so that you do not end up paying more than the coverage you get. 

Can I Skip Buying Collision Damage Waiver for Rental Cars?

You may have two alternatives to purchase a collision damage waiver. These include:

1. Credit Cards - Many times credit card companies may offer collision damage waiver insurance for cardholders who pay the rental cost of the vehicle using the credit card.
2. Existing Car Insurance Policy - Another way to get a collision damage waiver is under your existing car insurance plan. A few motor insurance companies also offer collision damage waiver cover under their rental car insurance plans, which you can purchase. In such a case, you will not have to additionally purchase CDW insurance and can rely on your existing car insurance policy for coverage. Although, this feature may not be provided by many insurance companies in India.

If you decide to go with a credit card or existing insurance alternative instead of purchasing a collision damage waiver separately, make sure that your insurance provider or credit card company agrees with the rental company to pay for the cost of repairing the rental car damages Also, do your research before proceeding with the purchase.

Is Damage Waiver the Same as Car Insurance?

Collision damage waiver should not be confused with car insurance as the former only covers the repairs for a rental car. On the other hand, a car insurance policy is purchased to cover a car that you have purchased for yourself and not rent one.

Moreover, the scope of coverage for both types of insurance is different. A collision damage waiver insurance only covers some of the repairs that a renter may incur in case of a rented car accident. It does not cover any third-party injuries or property damages as well. 

Whereas, a car insurance policy has wider coverage. It can cover third-party damages to property or injury/death of a third-party (known as third-party insurance) or third party’s damages/injuries, personal accidents along with car’s own damages (comprehensive car insurance) in case of a car accident, theft or other unforeseen incidents.

Other Types of Coverage Offered in Rental Car Insurance

Apart from collision damage waiver cover, there are some other coverages that you can get by buying rental car insurance online. These include:

1. Protection from Theft

   The second most common coverage after collision damage waiver insurance is protection from theft. In case the rented car gets stolen, then the theft protection coverage will cover you against the cost of the stolen car. In such a case, you will not have to pay for the cost of replacing the stolen car, which you would have been liable for otherwise. Moreover, protection from theft offers financial cover against the damages that the recovered rented car has sustained while being stolen.

2. Third-Party Liability

   Like a third-party car insurance policy, rental car insurance also provides coverage against third-party liabilities. If the rented car meets with an unforeseen accident resulting in the injury to a third party or damage to his/her property, then rental car insurance will cover those liabilities and pay compensation to the third party on your behalf.

Wrapping Up!

Choosing a collision damage waiver or not is completely up to you. Regardless of your decision, make sure to take pictures of your rental car when you pick it up from the rental company, especially if you spot existing damage. By doing this, you can document any damage that was already there on the rented car and show them as proof of no damages sustained by the car under your custody. Additionally, make sure to have all your doubts cleared before deciding on purchasing CDW insurance.