When To Purchase Collision Damage Waiver Insurance For Your Rental Car


When you are renting a car you need to decide whether or not you want to purchase the collision damage insurance (CDW).

The collision damage waiver insurance offered by the rental companies is not actually insurance. It is a protection package giving a waiver between the renter and the rental car company. The rental car company waives the right to charge the renter for damages to the rented vehicle.

If a rental car is damaged in addition to the charges for repair the renter may incur expenses for loss of use of the vehicle for the length of time it is not available to be rented. There may be a charge for loss of value since a car with a damage on its record has a lesser resale value then one with no accidents. There may also be administrative fees to be charged. These charges fall within the CDW coverage. The CDW does not cover damages as a result of negligence by the renter.

CDW insurance does not cover liability, however, if you have your own private automobile insurance liability coverage it may provide liability coverage for the rental car.

Be sure to carefully read your policy or check with your insurance agent. The rental car company probably has basic liability coverage, but you need additional protection.

You need to talk with your insurance agent to see if your private automobile insurance coverage will cover collision damage for the rental car. It may provide coverage for repairs after you pay the deductible. It probably will not cover administrative fees or loss of use charges.


Check with your credit card company too. Some credit card companies pick up and act as secondary insurance if their credit card was used to rent the car. This may cover the deductible your primary insurance does not cover.

Purchasing insurance from the rental car company is not going to be cheap. But, if you have an accident and do not have sufficient insurance to cover it, your out of pocket expenses can run into thousands of dollars.

Deciding whether or not to purchase the insurance coverage offered by the rental car companies can be a difficult choice. You don’t want to spend money to duplicate coverage, but you also don’t want to be without sufficient coverage in the event of an accident.

You will need to research your options with your insurance agent and credit card company and then compare this coverage with the coverage offered by the rental car company factoring in the cost for the coverage from the rental car company.

If you do not have coverage under an individual automobile insurance policy then you likely need to consider purchasing the rental car companies plan.