What Does a Collision Damage Waiver Not Cover?

Now let’s talk about the inverse of the previous section with what collision damage waiver, or collision damage waiver, or loss damage waiver doesn’t provide coverage for. You may notice that these exceptions are based on the damages of the other driver(s) involved in the accident and careless behavior.

What is Collision Damage Waiver in Car Rental?

Q: What is a Collision Damage Waiver in Car Rental?

You will be offered a collision damage waiver several times throughout the process of renting the car. Car rentals can be based in your home state or wherever you are visiting. Countries in North, South, and Central America all have the same laws regarding auto insurance and rental cars, so the practice of offering collision damage waivers is consistent. As previously mentioned, your personal auto insurance can operate as coverage for the rental car. But, you can literally waive this option with a CDW. A collision damage waiver is an optional car insurance waiver (not a policy) in which you are not required to pay for the damages if your rental car is damaged in an accident. The waiver serves as permission that the rental company allows it. Depending on the company and location, a CDW may also be referred to as a loss damage waiver or an LDW. Another popular name for it is loss damage waiver insurance, but this isn’t really accurate since a collision damage waiver doesn’t count as an car insurance policy. A CDW will cover any damage to the rental car for a somewhat budgeted price, but it’s not without its limits and catches.

Q: What Does a Collision Damage Waiver Specifically Cover?

A collision damage waiver, or loss damage waiver isn’t exactly comprehensive car insurance. In fact, a collision damage waiver, or loss damage waiver is very specific in what it waives for the driver -and that is physical damage to the rented car. At the same time, there are some other types of damages you will be protected against.

Q: How Much Does a CDW Cost?

The good news is that a collision damage waiver, or loss damage waiver is relatively inexpensive. It depends on the rental company, but you can find collision damage waivers for anywhere from $10 to $30 for each day you are renting the car. This is about 40% or less of the rental price. You may be wondering, with CDW included, how much the rental car will now cost. The answer is not by a whole lot if you found collision damage waiver, or loss damage waiver cheap.

Q: What is Third Party Car Rental Insurance?

A third option you have for covering damages following a rental car accident is to get automobile insurance from a third party. This would mean it would not come from the rental car company or your car insurance provider back home. Typically, these are companies that specialize in insuring vehicles that are being rented while traveling. The best part is that it’s roughly the same price as a damage waiver and includes even more coverage. Third-party rental policies include coverage limits for the rental car itself (interior and exterior), baggage and belongings during travel, and trip interruption. This would mean that if your trip abruptly ends, you will be reimbursed for any cancellation fees and new travel plans to get back home. Companies that specialize in such insurance are Bonzah, Insure My Rental Car, and Allianz. Another plus side to third-party rental car insurance is the lack of deductibles. Like a CDW, third-party rental car insurance is paid on a daily basis during the span of the rental period. These prices can range from $8 to $14, depending on how much liability coverage you choose. The exact coverage amounts vary. It can be around $35,000 to $40,000 for the rental car, $500 to $1,000 for baggage and belongings, and $500 to $1,000 for trip interruption or cancellation.

Rental car insurance functions differently than standard owner car insurance.

Rental companies often have their own insurance and privacy requirements for their clients and their vehicles whenever they are rented out. Full coverage with comprehensive and collision car insurance is the standard for all rental car drivers; more than simple liability insurance is required to cover the rental vehicle.

Your personal car insurance policy and personal auto policy deductible will carry over to the rental when you pick up the keys and sign off for it. However, rental car companies may still offer you auto insurance services during your time with their car. One of these services is collision damage waiver insurance or CDW.

A CDW is an excellent option if you don’t want to be responsible for expenses after a collision or accident in a rental car that would inevitably affect your personal car insurance premium. Because after all, if you are at fault in the accident, you already have the damage and injuries liability coverage of the other driver to contend with whether you decide to pay for them with your personal auto policy deductible or to file an insurance claim.

Paying with credit cards for damages on a car you don’t even own isn’t the best use of your money. That’s why it’s essential to know everything about liability, collision damage waivers, collision damage insurance, and other types of insurance for rental cars.

What is a Collision Damage Waiver in Car Rental?

At the rental counter, you will be offered a collision damage waiver or CDW several times throughout the process of renting the car, always taking into consideration your privacy and your possibility of declining.

Car rentals can be based in your home state or wherever you visit. North, South, and Central American countries all have the same laws regarding auto insurance and car rentals. Hence, the practice of offering collision damage waivers is consistent. As previously mentioned, your personal auto insurance can operate as coverage for the rental car. But you can waive this option with an optional CDW coverage.

A collision damage waiver or CDW is an optional car insurance waiver (not a policy) in which you are not required to pay through your credit cards for the damages if your rental car is damaged in an accident. The collision damage waiver or CDW allows the rental company to waive liability from you.

Depending on the company and location, a CDW may also be called a loss damage waiver or an LDW. Another popular name is loss damage waiver insurance, which must be more accurate since a collision damage waiver doesn’t count as a car insurance policy.

A CDW will waive your liability and deductible, covering any damage to the rental car for a somewhat budgeted price. However, it’s not without limits and catches.

What Does a Collision Damage Waiver Specifically Cover?

A collision damage waiver, CDW, or loss damage waiver isn’t comprehensive car insurance. In fact, a collision damage waiver, or CDW, or loss damage waiver, is particular in what it waives for the driver -and that is physical damage to the rented car. At the same time, there are some other types of damages you will be protected against.

A collision damage waiver or CDW will exempt you from the following perils when in a rental car:

Collision and accident damage that was your fault
Comprehensive damage outside of driving, like vandalism and theft
Towing fees
Lost pay for the renting company since they can’t rent the car out if it needs repairs (like insurance covering lost wages)

What Does a Collision Damage Waiver or CDW Not Cover?

Now let’s talk about the inverse of the previous section with what collision damage waiver, CDW or loss damage waiver doesn’t provide coverage. You may notice that these exceptions are based on the damages of the other driver(s) involved in the accident and careless behavior.

Here is what you will not be covered for with a collision damage waiver:

Another person’s property damage
Another person’s bodily injuries and medical costs
Speeding and intoxicated driving accidents
Theft due to negligence**, such as leaving the car running or unlocked**
Certain parts of the vehicle may be damaged, including the tires, wheels, undercarriage, roof, windshield, interior, engine, and battery
Items within the car when they get lost or stolen, like child seats, keys, sporting equipment, GPS, or any personal belongings

How Much Does a CDW Cost?

The good news is that a collision damage waiver, CDW, or loss damage waiver is relatively inexpensive. It depends on the rental company, but you can find collision damage waivers for anywhere from $10 to $30 each day you rent the car. This is about 40% or less of the rental price. You may be wondering, with CDW included, how much the rental car will now cost. The answer is only a little if you found collision damage waiver, CDW, or loss damage waiver cheap.

Let’s look at some low-cost rent-a-car examples and their collision damage waiver:

Budget - Budget’s lowest daily rental is $42 daily for economy vehicles. Their collision damage waiver would cost $17 per day. So, you would have a daily rental cost of $59.
Enterprise - Enterprise’s lowest daily rental cost is around $44. For their collision damage waiver, it costs $15 per day. If you rent an Enterprise economy car from Enterprise, your daily rental cost would be $59.
Hertz - $47 is Hertz’s lowest daily rate for their rental cars. Their daily collision damage waiver is $16. The total daily rental cost of a Hertz economy car with CDW is $63.

What Are Collision Damage Waiver Alternatives to Cover Rental Car Damages?

Sometimes, you can skip a collision damage waiver because you already have coverage for rental car damages from other types of insurance.

This coverage requires approval and cooperation with car rentals and can come from:

Credit-card provider benefits - Some major credit card companies, such as American Express, and major credit card networks have what can be described as rental car insurance. Use your credit card as a payment method or reserve your rental cars. You can use your credit benefits to cover any damages that may occur. Naturally, you decline the CDW and any other collision insurance when signing your rental agreement in order for it to work. However, there may be exceptions where your credit card benefits will not cover the damages, such as a rental period of over two weeks or driving a truck or van as opposed to an economy make and model. A credit card can serve as a primary or secondary coverage source for liability or collision insurance. You may or may not have to file a claim form with your car insurance company.
Personal auto insurance policy - If you are traveling domestically, you can use your car insurance since it is active in the United States and Canada. However, this may come at a cost. A CDW will not cause your personal auto insurance premium rates to rise after you use it as collision insurance. Meanwhile, when you file a claim using your personal car insurance, instead of paying for the damage until you reach your deductible, your car insurance rates will rise with most insurers.

What is Third Party Car Rental Insurance?

A third option for covering damages following a rental car accident is to get automobile insurance from third-party insurance companies. This would not come from the rental car company at the counter while signing your auto rental agreement or car insurance provider back home.

Typically, these are insurance companies that specialize in insuring vehicles that are being rented while traveling. The best part is that it’s roughly the same price as a damage waiver and includes even more coverage for you and your additional drivers.

Third-party rental policies include

Coverage limits for the rental car (interior and exterior)
Baggage and belongings during travel
Trip interruption

This would mean that if your trip abruptly ends, you will be reimbursed for any cancellation fees and new travel plans to get back home. Insurance companies specializing in such insurance include Bonzah, Insure My Rental Car and Allianz.

Another plus side to third-party rental car insurance is the lack of deductibles. Like a CDW, third-party rental car insurance is paid daily during the rental period and throughout the duration of your rental agreement.

These prices can range from $8 to $14, depending on how much liability coverage you choose. The exact liability car insurance coverage amounts vary. It can be around $35,000 to $40,000 for the rental car, $500 to $1,000 for baggage and belongings, and $500 to $1,000 for trip interruption or cancellation.

What if You Want to Add More Coverage to a CDW for your Rental Car?

We’ll close this piece out with other types of rental car insurance that insurers can offer to help you.

CDW has excellent coverage but only applies to damage to rental cars, unlike comprehensive and collision insurance. That still leaves you and your passengers uninsured.

Here are other types of rental car insurance to look into if you feel you don’t have enough protection:

Supplemental liability - With SLI or supplemental liability insurance, the other driver you cause injury to is covered, so you don’t have to pay their medical bills or damage to their car. This functions like bodily injury and property damage rental car insurance policy.
Personal accident - This works the same as personal injury protection (PIP) insurance would by covering medical costs for yourself and your passengers.
Personal effects - If you want your property kept within the rental car to be insured, then a personal effects insurance policy is for you. If something is stolen from the vehicle, you can have peace of mind knowing insurance companies will reimburse you.

What Auto Insurance Option is Right For Your Rental Car?

Deciding on how to insure your rental car is a matter of shopping around and finding the best coverage and premium for your situation insurers can offer you.

For example, if your personal car insurance policy limits aren’t enough for the rental car, then a damage waiver or credit card coverage from your credit card company would be the way to go for more liability insurance or collision insurance.

But your credit card can only serve as secondary coverage. In that case, getting a waiver from the rental company or other insurers may be best for an additional cost.

Weigh your automobile insurance policy and third-party insurers' options carefully before planning your rental period to find the best value for adding more liability or other types of insurance to your rental car. Don’t increase your personal car insurance premium in the case of a car accident.

Insurance Navy can help you insure and cover your rental car for damages.

If you aren’t with Insurance Navy, do you have good auto insurance coverage? Insurance Navy helps all drivers get the best auto insurance rates. We offer free, cheap car insurance quotes online and over the phone at 888-949-6289. In need of further assistance? Please stop at one of our many locations to meet with an expert agent.