Question: Do I Need to Purchase Collision Damage Waiver Insurance for my Rental Car?
It depends on your rental car needs, location and payment method.
What Is Collision Damage Waiver Coverage?
When a rental car company representative asks you to purchase Collision Damage Waiver (CDW) or Loss Damage Waiver coverage, you are being asked to pay a certain amount per day in return for a lower deductible payment if the rental car is damaged or stolen. The amount varies by location and type of rental car. Taking (and paying for) CDW coverage can add 25% or more to the total cost of your rental. In some countries, such as Ireland, you may be required to purchase CDW coverage or provide proof of alternative, equivalent coverage in order to rent a car.
If you do not purchase CDW coverage and something happens to your rental car, you could end up paying the rental car company a great deal of money. The deductible on your rental car could be quite high – in some cases, well into the thousands of dollars – and you may also have to pay for "loss of use" of that car while it is being repaired. You will need to read your entire rental car contract and carefully weigh the advantages and disadvantages of paying for CDW coverage when you select your rental car.
Collision Damage Waiver Coverage Alternatives
Credit Card Companies
Your credit card company may offer CDW coverage, provided you pay for your rental with the credit card and decline your rental car company's coverage. If you choose this option, be sure to read your credit card company's terms and conditions before renting a vehicle. Some credit card companies offer coverage only within the United States, while others exclude specific countries.
Travel Insurance Providers
You may be able to purchase CDW coverage when you insure your trip. Several travel insurance providers offer Rental Vehicle Damage coverage, which you may purchase if you intend to decline the CDW coverage offered by your rental car company. This type of coverage only applies in specific situations, including vehicle theft, riot, civil unrest, natural disaster, collision and vehicle upset. Some situations, including driving while intoxicated, are specifically excluded from coverage, as are certain types of rental vehicles, such as motorcycles, vans and campers. To get a quote for Rental Vehicle Damage coverage, you will probably need to request a quote for a travel insurance policy directly from an underwriter, such as Travel Guard, Travelex, HTH Worldwide or MH Ross Travel Insurance Services, or from an aggregator such as SquareMouth.com or InsureMyTrip.com.