Understanding Cdw Auto Insurance Coverage: Are You Protected?

Collision Damage Waiver (CDW) insurance is an optional contract sold by rental car companies to cover you in case of an accident or other damage to your rental car. It covers damage to the rental car, but not to other people's property. It typically costs $10-$30 per day for economy vehicles, but can nearly double the total cost of renting a car. CDW is a good option if you don't have your own car insurance, a credit card with rental car coverage, or a third-party rental car insurance policy.

What does CDW cover?

A Collision Damage Waiver (CDW) is an optional contract sold by rental car companies to cover you in case of an accident or other damage to your rental car. The cost of a CDW depends on various factors, including the rental car type and where the vehicle is being driven. It usually costs around $10-30 per day, but this can increase the total rental price by nearly double.

A CDW covers most physical damage to a rental car, as well as other costs that may not fall under other insurance policies. This includes:

• Damage caused by an accident
• Damage caused by something other than an accident, like vandalism or a natural disaster
• Administrative and towing fees
• Lost revenue for the rental company while the car is under repair and cannot be rented out
• Theft (in some cases)

However, it's important to note that CDWs do not cover damage to other people's property or anyone's injuries or medical bills. They also don't cover loss or theft caused by negligence, like leaving the car running outside of a hotel, or damage resulting from risky behaviours, such as speeding or drunk driving.

When deciding whether to purchase a CDW, it's important to consider your coverage needs and risk tolerance. If you have personal auto insurance with collision and comprehensive coverage, or a credit card with primary rental car insurance coverage, you may already have similar coverage when renting a car.

When is CDW worth it?

A Collision Damage Waiver (CDW) is an optional extra offered by car rental companies to cover you in case of an accident or other damage to your rental car. It is not the same as insurance, but an agreement stating that the rental company waives its right to charge the renter for vehicle damage.

Whether or not you need to purchase a CDW depends on your rental car needs, location, and payment method. If you don't have personal auto insurance or a credit card with rental car coverage, then you should seriously consider paying for a CDW.

• You don't have car insurance: If you don't have car insurance, purchasing a CDW is a smart idea as you may not have any coverage otherwise.
• You don't want to risk higher insurance rates: If you have car insurance, but don't want to risk your insurance rates rising in the event of an accident with the rental car, a CDW can provide peace of mind.
• You don't want to pay out of pocket: With a CDW, you won't have to pay for any damage out of pocket and then wait to be reimbursed by a credit card company or car insurance company.
• You want comprehensive coverage: A CDW covers most physical damage to a rental car, as well as other costs that may not fall under other insurance policies, such as loss of use, towing, and administrative fees.
• You want to avoid a high deductible: If you have a high deductible on your personal car insurance policy, the few extra dollars per day for a CDW might be worth it.
• You're renting in a foreign country: If you're renting a car in a foreign country, your personal auto insurance may not cover you, and credit card coverage may be limited or not offered in certain countries. In this case, a CDW can provide valuable protection.

It's important to carefully review the terms and conditions of a CDW before purchasing, as coverage can vary. Additionally, consider taking photos of your rental vehicle before and after your trip to document any existing damage and give you peace of mind.

Alternatives to CDW

When looking for alternatives to CDW, it is important to consider your specific needs and requirements. Here are some alternatives to CDW for your auto insurance:

For Medium-Sized Companies:

TD SYNNEX (Tech Data + Synnex) is a commonly suggested alternative for medium-sized companies. They offer a range of products and services that can be tailored to meet the needs of businesses of this size.

For Enterprises:

AVI-SPL is a digital workplace services provider that works with organizations globally to improve team collaboration through video and audio technology. They are a good option for enterprises seeking alternatives to CDW.

For Microsoft Licensing and Hardware Upgrades:

SHI, Monoprice, and Tigerdirect are recommended by some users as alternatives to CDW for Microsoft licensing and hardware upgrades. SHI, in particular, is praised for its decent pricing and proactive and responsive service.

For E-commerce:

If you are looking for a full e-commerce site type VAR alternative, Insight, SHI, or Zones are suggested by a user. These options may provide a similar range of products and services to meet your needs.

For Project-Based Purchases:

For more project-based purchases, it is recommended to explore smaller vendors as alternatives to CDW. While not specifically named, these smaller businesses may be able to offer more tailored services and support.

For Software and Hardware:

PCMall (now known as PCM) is suggested as an alternative to CDW for software and hardware purchases. They are praised for their lack of annoying sales calls, competitive pricing, and friendly and responsive service.

For General Technology Supplies:

Core BTS is recommended for general technology supplies and services. They may offer a similar range of products and services to CDW, depending on your specific needs.

For Dynamic Pricing:

Zones is suggested for its dynamic pricing and responsive service. They may be able to offer more flexible pricing options compared to CDW.

For Microsoft Licensing:

Softcat is specifically mentioned for Microsoft licensing. They could be a good alternative if you are specifically looking for software licensing options.

For Hardware and Courier Services:

Staying with CDW for hardware purchases and courier services, but switching to SHI for Microsoft licensing and infrastructure purchases, is also an option suggested by a user. This mixed approach may be beneficial if you want to maintain certain aspects of CDW's services while exploring alternatives for others.

Remember, when considering alternatives to CDW or any other service provider, it is important to research and compare their features, pricing, customer service, and how well they align with your specific needs.

CDW and personal car insurance

A Collision Damage Waiver (CDW) is an optional contract sold by rental car companies to cover you in case of an accident or other damage to your rental car. A CDW is not an insurance policy but a waiver of the rental company's right to collect a high deductible from you if the car is damaged. It covers most physical damage to a rental car, as well as other costs that may not fall under other insurance policies.

When to Use Personal Car Insurance

When renting a car, your personal car insurance, with collision and comprehensive coverage, typically carries over to your rental in your home country. However, when driving abroad, your own insurance is unlikely to cover you.

If you have collision auto insurance on your personal vehicle, you likely have similar coverage when renting a car. These coverages protect any vehicle you’re driving, no matter who is at fault in an accident. However, your car insurance may not cover the loss of use when the car is repaired, towing fees, or any of the rental company’s administrative expenses. Your insurance policy may only cover you up to a certain number of days, such as 30 days. Always call your insurance representative to find out how your coverage works when renting a car.

A CDW can reduce the risk of an incident being reported to your insurance and help you avoid paying your insurance’s deductible if you damage the car. However, a credit card with secondary coverage can also cover the deductible.

When to Purchase a CDW

If you are not carrying this protection, you may end up having to cover a huge bill to repair or replace the rental car if you are involved in an accident or the vehicle is stolen. If you are assuming your personal car insurance will extend to a rental vehicle, this is not always the case, particularly if you are out of your home country. Always check with your agent when determining whether your policy extends coverage to rental cars.

While many credit cards offer damage protection for rental vehicles, this is not always the case, and the coverage can come with many exclusions. Be sure you understand the details of this coverage and any exclusions that apply if you are depending on a credit card for coverage.

Deciding whether or not to get a CDW depends on your coverage needs and risk tolerance. Declining the coverage may make you feel uneasy, especially if the representative at the rental counter makes the case that you could be taking a huge risk by not springing for the add-on. However, a CDW may be unnecessary if you carry adequate coverage through another source, commonly your car insurance or credit card.

CDW and credit card coverage

If you're renting a car, you may be wondering how to get insurance on your rental without paying extra for coverage. The rental agency may offer you a confusing list of car insurance add-ons and protections available for purchase. However, you might not need to buy extra insurance, as some of the best travel rewards cards provide car rental insurance that may allow you to decline the rental company's collision damage waiver (CDW).

A collision damage waiver (CDW) is a form of insurance that covers damage to the rental car while it’s in your possession. This can include scratches, damage caused during a break-in, or a more serious accident, regardless of who’s at fault. Many credit cards offer a replacement for the rental company’s CDW, and it’s the most common type of rental benefit provided by credit cards.

This credit card benefit typically provides coverage for damage to a rental car up to a certain amount. It will usually exclude certain types of vehicles, and coverage may vary by country. The details are worth checking before relying on your card for insurance.

It’s important to understand that the CDW only covers physical damage to the rental car. It doesn’t cover medical or liability coverage. If you want medical or liability coverage, you may need to purchase separate insurance.

Terms and conditions vary, but they generally require you to pay for your rental car with the appropriate card (usually the whole bill, not just part of it) and to decline the insurance offered by the rental car company. If you don't follow these requirements, your credit card car rental insurance won't take effect.

Credit card rental car insurance usually covers theft, loss, and damage to your rental car in the case of an accidental collision. The cost of injuries to yourself or other drivers may not be covered by your credit card’s rental car insurance, and the cost of your stolen personal items from the rental car also may not be protected. You’ll want to check the fine print of your credit card’s insurance agreement to confirm.

While credit card car rental insurance will provide collision, damage, and loss coverage for the rental car itself, it won’t provide third-party or personal injury insurance. That means your credit card won’t cover you for any damage caused to someone else’s property or medical costs associated with an accident.

How to Check if Your Card Offers Rental Car Insurance

Your card’s benefit guide is the best place to check the details of what rental car coverage is offered. This guide was likely mailed to you when you first got the card, but should also be available online if you’ve misplaced the original copy.

Examples of Cards with Rental Car Insurance

• Chase Sapphire Reserve
• Chase Sapphire Preferred Card
• Capital One Venture X Rewards Credit Card
• Ink Business Preferred Credit Card
• Scotiabank Passport Visa Infinite Card
• American Express Cobalt Card
• Scotiabank Gold American Express Card
• TD Cash Back Visa Infinite Card
• Tangerine World Mastercard

Frequently asked questions