A CDW, or Collision Damage Waiver, is an optional rental car insurance product that relieves you of financial responsibility if the vehicle is damaged or stolen. Essentially, you are paying the rental company a daily fee to "waive" their right to charge you for repair costs. However, it's not true insurance; it's a waiver agreement. The key point is that a CDW typically has exceptions, like damage to glass, tires, undercarriage, or loss of use fees while the car is being repaired.
The cost of a CDW can add a significant amount to your total rental bill, often $20 to $30 or more per day. Before accepting it at the counter, you should check if you already have coverage. Many premium credit cards and personal auto insurance policies extend coverage to rental cars, though the terms and deductibles can vary widely.
| Coverage Aspect | Typical CDW Coverage | Common Exclusions |
|---|
| Collision Repair | Covers cost of repairs after an accident. | Damage from off-roading or reckless driving. |
| Theft | Covers the vehicle's value if stolen. | Personal items left inside the car. |
| Loss of Use | Sometimes covered, but not always. | Rental income lost while car is in the shop. |
| Deductible | Often reduces your liability to $0. | You may still be liable for admin fees. |
| Tires/Glass | May not be fully covered. | Pothole damage to tires or cracked windshields. |
It's crucial to understand the specific terms of the CDW offered, as they differ by rental company. Always read the fine print to know what you are—and are not—protected against. For frequent travelers, the cost of a CDW can quickly exceed the value of just paying for damage out-of-pocket for a single incident, making it a decision based on your existing coverage and risk tolerance.
