YOU ASK:

What is CDW insurance?

WE ANSWER:

CDW stands for collision damage waiver insurance - a temporary coverage which is offered to people in rental car agreements.

It is a hotly debatable part of rental auto contracts with some consumer experts being in favor of it, while others vehemently rejecting the CDW coverage because of its high costs.

What CDW Insurance Covers

The collision damage waiver, which you might also encounter under the abbreviation LDW (standing for loss damage waiver), offers coverage for any unintentional physical damage that can happen to the rented car while it is occupied by the insured.

You are not required to purchase CDW insurance but you are strongly recommended to, especially if you do not have a Personal Auto insurance policy, and you rent the car for a short period of time. You never know what might happen, so do not hesitate - pay the extra dollars and forget all your worries. Better be safe than sorry, after all!

However, you should bear in mind that if an accident happens in which you are found to be driving while being intoxicated, driving off-road or speeding, you will be held accountable for the physical damage to the rented automobile and the CDW rental insurance will be declared void.

There are certain situations in which you can spare the extra $20 or so that the collision damage waiver insurance costs. These include the following:

  • You won adequate auto insurance and are carrying collision and other-than-collision coverage, paying for CDW insurance is unnecessary, since your Personal Auto policy covers rental automobiles that you operate.
  • If you have a credit card covering theft or damage to your auto, and you use it to pay for renting the car.
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