CDW – Collision Damage Waiver
Collision Damage Waiver (CDW), otherwise known as Loss Damage Waiver (LDW) and sometimes Physical Damage Waiver (PDW), is a common term used in the car rental industry that confuses customers. Let’s understand what CDW actually means.
What is CDW?
CDW is the amount the car rental company will cover (they may say they ‘waive’) if you damage the rental car, if it has been stolen or if it has been written off. Although the rental company will cover a certain amount, there will still be an excess amount left that you are liable for.
Let’s say the total cost of the damage claim is €1500. If your rental agreement includes CDW and your excess amount is €500, the rental company will then waive (cover) the remaining €1000 in line with their CDW. You are still responsible for the €500 excess however this can be reimbursed following a successful claim under our policy.
Do I Need Collision Damage Waiver Insurance?
Whether you need to purchase CDW insurance separately or if your rental agreement includes CDW depends on the region you are renting your car.
CDW in Canada and the United States
If you are renting a car in the US or Canada, then you should be aware that CDW is generally not included in the base rental price. Instead, it’s an optional extra and needs to be purchased additionally.
The way CDW works depends on the region – in North America (Canada and the United States) you need to opt in to CDW protection but elsewhere in the world it’s typically included in the cost of renting the car. Make sure to review your rental agreement to confirm if CDW is provided and what it covers if it is.
CDW in Europe, Africa and Australasia
In Europe, Africa and Australasia, CDW is typically included in your car rental agreement. However, the coverage is likely to very basic, protecting only the car’s bodywork and excluding damage to tyres, wheels, vehicle glass, the underbody and other similar components.
Even when CDW is included, there is still an excess. This is the part of the damage cost that is not covered by the rental company and subsequently the amount you are responsible for. This excess amount can be hundreds or even thousands which is why having a standalone car rental excess insurance policy is important. It will mean you’re not left out of pocket for this remaining cost.
CDW Insurance from ReduceMyExcess
If you are renting a car in North America and want CDW cover, you’ll need to choose our Worldwide+ policy. This policy provides you with up to £50,000 in CDW protection if you are liable for damage, theft or total loss of the rental car. Up to £10,000 in excess reimbursement is also provided meaning you’ll be fully protected against unexpected costs.
For all other ReduceMyExcess policies, you may notice CDW is not selected but don’t panic. This means that CDW is included in your rental agreement because you have selected you are renting your car in Europe where CDW is included as standard in the rental agreement.