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What is CDW Insurance and What Does it Cover?

When you're driving a rental vehicle, it's crucial to ensure that you're financially protected if things go wrong. One vital piece of financial protection is a Collision Damage Waiver (CDW).

In this guide, we’ll comprehensively break down what CDW insurance is and how it affects you when you hire a car.

What is a Collision Damage Waiver (CDW)?

A Collision Damage Waiver is a document that reduces your liability for damages to a rental vehicle. It can come into effect if your vehicle is damaged in an event like a car accident.

A policy might be referred to as a "Collision Damage Waiver" while also providing cover if your vehicle is stolen. A policy that includes theft protection is more commonly known as a Loss Damage Waiver (LDW).

A CDW is not strictly "insurance". It's actually a document that transfers the risk of financial loss of damages to the rental company. Your car rental company waives the right to hold you liable for vehicle damages, to a limited extent.

Outside of Canada and the United States, the cover of a CDW is typically included in your rental agreement and the daily price of your vehicle. However, rental companies may encourage you to purchase additional insurance to cover the excess you'd pay if things go wrong.

This cover is sometimes called a Super Collision Damage Waiver (SCDW). An SCDW usually reduces your excess to $0. However, you can still face fees related to towing, loss of use and more.

On the other hand, policies from RentalCover are 50% cheaper than rental companies†, with no excess to pay in the event of an incident. This allows you to breathe more easily when travelling in a rental vehicle.

What do Collision Damage Waivers cover?

Collision Damage Waivers can look different depending on where you purchase them. A typical CDW from a car rental company or credit card company might cover the following:

  • Single vehicle accidents.

  • Theft or loss protection.

  • Optional extras like scratches and bumps to the main body of a vehicle.

Make sure you carefully examine any policy before signing up so you know exactly what you're covered for.

Other rental car damage coverage providers tend to go further with their coverage. For example, RentalCover includes the following cover in all policies:

  • Single & Multi-vehicle vehicle accidents.

  • Full fire, theft and vandalism cover.

  • Towing.

  • Lockout.

  • Car key cover.

  • Windscreens.

  • Headlights.

  • Tyres.

  • Underbody damages.

  • Unlimited additional drivers.

We offer our best coverage on a single plan, with no extras and no add-ons. Keep your cover simple and enjoy travelling in a rental car with peace of mind.

What do Collision Damage Waivers not cover?

It's crucial to understand where your CDW doesn't cover you. Typical exclusions are:

  • Damage to another vehicle.

  • If an accident results in injuries.

These sit outside of the scope of a CDW.

There are some other common CDW exclusions when it comes to rental car companies and credit cards that you can be covered for with RentalCover. This includes:

  • Towing, lockouts, keys, windscreens and headlights are available as automatic inclusions in a RentalCover policy, rather than as optional extras.

  • Multi-vehicle vehicle accidents.

  • Tyres and underbody damage.

Travel in comfort knowing you have more cover. RentalCover offers comprehensive protection that's cheaper than car rental companies. Plus, when you make a claim, you pay $0 in excess.

Is a Collision Damage Waiver worth it?

Outside of the US and Canada, a CDW is typically automatically included in the basic cost of your rental vehicle. While these policies often offer a solid level of cover, they can have significant coverage gaps and leave you significantly out of pocket in the event of an incident.

That's why it's worth strongly considering getting additional cover from a provider like RentalCover. You'll have more complete coverage and pay $0 in excess in the event of a claim. Our policies are a cost-effective way to ensure you can enjoy your travels with peace of mind.

What is a Super Collision Damage Waiver?

A Super Collision Damage Waiver (SCDW) is a product sold by rental companies at the rental desk. It's a more "premium" version of a CDW that, in most cases, reduces your excess to zero. However, additional fees for towing and loss of use can still apply.

SCDWs also cover you for most exclusions of a CDW policy.

While reducing your excess is an appealing prospect, SCDW policies don't necessarily offer the best value for money. RentalCover offers a more affordable option, with $0 to pay in the event of an accident.

How do Collision Damage Waivers differ from Loss Damage Waivers?

The major difference between Collision Damage Waivers and Loss Damage Waivers is with regard to theft protection. "Collision Damage Waiver" often refers to a policy that covers damage to a vehicle, but not theft.

"Loss Damage Waiver" covers both damage to the vehicle and loss of the vehicle through theft. Outside of the United States and Canada, these policies are often packaged together.

Cover your rental vehicle with RentalCover

You might have a CDW already included in your car rental policy, but you could still face an extreme excess if things go wrong. With protection from RentalCover, you don't need to stress about out-of-pocket costs if things go wrong.

Our policies are more comprehensive than what the rental companies offer, and they're 50% cheaper†. Get your instant quote and find out how RentalCover can help you breathe easy on your next journey.

Hear from our rental car insurance expert

"Chances are, a Collision Damage Waiver is automatically included in the price of your rental vehicle. However, these policies can come with sky-high excess costs if things go wrong.

When you purchase a policy from RentalCover, you pay $0 in the event of an incident. Take your next trip in a rental car, and rest easy knowing you're properly protected."

Frequently asked questions

How do Collision Damage Waivers work?

Outside of the United States and Canada, Collision Damage Waivers are usually included in the cost of your rental vehicle. They provide protection if your vehicle is damaged. They can also extend to offering theft protection, too.

CDWs come into effect when an incident occurs with your rental vehicle. If you have coverage with your rental company, they'll process the incident and charge you an excess cost. You might also have to pay additional administrative fees.

If you have a RentalCover policy, you can file an online claim with us after you're charged by your rental company. We ensure you have $0 to pay, and 98% of claims are paid out within 3 days, in any currency.

How do you file a claim for a collision in a rental car?

Filing a claim for a collision in a rental car depends on the type of coverage you have. If you have purchased insurance from the rental company, they'll usually handle it internally, charging you an excess as well as any associated fees.

If your cover comes from a different source, like a credit card, you usually need to file a claim with other relevant insurance providers before being eventually reimbursed by your credit card.

For RentalCover customers, we process your payout after you are charged by your rental company and you submit an online claim. We’ll ask you to provide relevant documents like a copy of your rental vehicle agreement, a photo of your driver’s licence, a repair invoice and any other evidence we require. We may also have a few follow-up questions to ask you before organising your reimbursement.