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?
A collision damage waiver (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?
CDW insurance typically covers any damage to a hired vehicle while in your possession, such as driving in a city and getting into a fender bender. 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?
An auto hire 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.
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.
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.
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.
