If your head tends to spin after a car hire agent explains the extra insurance options when hiring a car, I’m here to help. There are so many choices, but do you really need the extra car hire insurance in the first place? In this guide, I dive into the collision damage waiver to answer this question and more.
What is a collision damage waiver?
Collision damage waiver insurance (CDW), also known as a loss damage waiver, is an agreement where the car hire agency waives its right to charge a high excess for damage to a hire car. It is not so much insurance as a guarantee the hire company will pay for any damages to their vehicle.
What does CDW insurance cover?
Collision damage waiver insurance typically covers any damage to a hired vehicle while in your possession, such as getting into a collision. It also covers theft of the vehicle and vandalism. Waivers can cover lost income a car hire company might charge while the car is being repaired.
What is not covered by a collision damage waiver?
A car rental collision damage waiver will not pay for injuries to you or other passengers, or damage to your personal property if you get into an accident in a hire car. The waivers also don’t typically cover damage from negligence. This could be behaviour such as speeding or driving under the influence of alcohol.
How much does it cost?
If you’re looking to keep the cost of your hire low, collision damage waivers can make you squirm. They typically cost between £12 to £25 a day, which can add a significant additional cost to a week-long hire.
Let’s look at what five of the leading car rental companies offer when it comes to CDWs.
| Car rental company | Is CDW included by default? | Default excess amount | Cost to reduce excess to zero |
|---|---|---|---|
| Enterprise | Yes | £1000 for cars | N/A – but you can pay £15 per month to reduce it to £250 |
| Budget | Yes | £1500-£2000 depending on car group | From £35 per day up to ten days |
| Avis | No | From £650 in the UK | From £24 per day |
| Hertz | No | From £1260 | Unique to every booking, from around £15 per day |
| Sixt | Yes for UK rates | From £1000 | Unique to every booking, from around £18 per day |
My top tip is to always pay the extra to reduce the excess amount. You don’t want to be liable for a huge four-figure sum of money in any accident while on holiday.”
Kirstie Pickering, KAYAK Travel Expert
Do you need a CDW when hiring a car?
If your car insurance policy includes personal liability, but you’ve dropped comprehensive and collision coverage, consider purchasing a collision damage waiver when hiring a car in the UK.
If you’re traveling abroad, you must understand exactly what your hire includes. In Europe, car hires often include personal liability coverage, which covers injuries you may cause to others and other people’s property, but it doesn’t include damage to your hire car from a collision.
In this case, it would be wise to purchase a CDW, unless you have purchased car hire insurance through a third party or have a credit card that includes collision coverage. Remember, a CDW can give you peace on mind while you’re on your holiday.
Alternative options to a collision damage waiver
If you don’t want to get a collision damage waiver, you have some alternative options. Let’s check them out.
Credit card
Many credit card companies offer hire protection for those using their cards to pay for vehicle hire. Before travelling abroad, make sure to check this with your credit card company.
Travel insurance covering car hire
When you purchase travel insurance from a third party, you can usually add on car hire collision coverage. Going this route can be cheaper than buying a CDW from a car hire company. Though be aware that if you get into an accident, you must pay the company and then get reimbursed by the third-party insurer, which can be a hassle.
Your own auto insurance
Personal auto insurance policies can be thorough and include hire car coverage insurance and collision protection (the excess you would be responsible for in the event of an accident to your own car would also apply to a hire).
If this is the case, buying extra coverage when hiring a car in the UK would be redundant. However, your personal UK policy will not cover you when travelling abroad.
Here’s how the different options weigh up against each other, including approximate prices for each.
| Approximate cost | Pros | Cons | |
|---|---|---|---|
| Credit card | Free for many credit card types (but check with your provider) | No additional effort needed | Doesn’t cover personal injury, mechanical breakdowns or relevant lawsuits |
| Travel insurance | Prices vary hugely depending on car type, location and length of trip – some are from £3.49 per day | Simple to implement an add-on when searching for travel insurance | Need to select car rental as an add-on, which can be expensive depending on location and length of time |
| Personal insurance | No additional cost as only applicable to UK car hires | Easy as no additional effort needed | Not applicable to hiring cars abroad |
Conclusion
Armed with this information, I hope you can answer a car hire agent without hesitation when they ask if you need a collision damage waiver. If you have questions about other types of car and hire insurance, KAYAK’s car hire guide is here to help you.
Frequent questions about collision damage waivers
If your car insurance policy does not include collision coverage, you may want to buy a CDW when hiring a car in the UK. When traveling abroad, you should buy a CDW or collision coverage from a third party.
Technically, a collision damage waiver isn’t insurance. It’s a waiver that may help cover repairs if you damage a hire car.
A standard collision damage waiver is an additional coverage offered to people hiring a car that protects them from paying out of pocket if there is damage to the vehicle or theft while the car is in their possession.
‘Collision damage waiver included’ would mean a collision damage waiver is included in your car hire, but this is not typically true. It is an extra type of coverage for your car hire, which you can purchase from a car hire company.
Loss damage waivers and collision damage waivers are the same thing.
