Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW)

Car Accident with Injuries
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If you’re looking to rent a car, you are probably wondering if you need insurance for it -- and the answer is not always easy to figure out. If you reserve the car online, you might notice an optional extra fee for either insurance or something called a CDW or LDW.

This is a Collision damage waiver (CDW), also known as loss damage waiver (LDW), and is technically not an insurance coverage -- it's a waiver of responsibility.

By purchasing a CDW, you will be not be held accountable for any loss or damage to the rental car. This can be very helpful if you find yourself in an accident while driving a rental car.

Sounds amazing and a no-brainer, right? Well, some fine print does exist on a CDW. It commonly states that if you violate the rental agreement in any way, the purchased waiver will not apply. It’s important to know the rules of your car rental agreement, and follow them to the T -- especially if you’ve paid extra for a damage waiver.

The Best Car Rental Coverage Available

In comparison to any other coverage available to cover physical damage, a CDW is the best. Insurance through your insurance carrier will require a deductible. Any coverage from any other source will most likely still leave you responsible for rent during the days the rental car is being repaired. These costs can add up very quickly. Adding insult to injury, you’re paying money to fix a vehicle you’ll never again benefit from driving.

With a CDW, however, you’re covered!

Example: While on vacation, John hit a guardrail and put a large dent in the passenger side door. John will not have to worry about a deductible or paying for repairs because he purchased the collision damage waiver. The collision damage waiver will pay for the repairs in their entirety.

One way to look at it is this: you can pay a little now or risk paying bigtime later. It is a gamble either way. If you are looking for 100% protection, you will need to purchase a collision damage waiver -- and follow the rental agreement, of course!