Auto Insurance Amount Waiver: What Does It Mean?

When it comes to auto insurance, a waiver is an optional feature that relieves policyholders from paying their deductibles in certain situations. This means that if you have a qualifying claim, you won't have to pay the amount you would usually be responsible for out of pocket when making a claim with your insurance provider. This can provide financial relief and peace of mind, especially in accidents involving uninsured drivers or multiple policies. Waivers are not widely available, and their applicability depends on strict rules and specific circumstances. Understanding the terms and limitations of waivers is crucial before deciding whether to include them in your auto insurance policy.

Collision Damage Waiver (CDW)

A Collision Damage Waiver (CDW) is an optional form of insurance that covers damage to a rental car. It is sometimes referred to as a Loss Damage Waiver (LDW) or Physical Damage Waiver. Rental car companies offer this extra layer of coverage for an additional daily fee. The cost of a CDW depends on factors such as the type of car and where the vehicle is being driven.

A CDW typically covers losses from any damage to a rental car while it is in your possession. This includes weather-related damage, damage while the car is parked, and accident-related towing. It may also cover theft or vandalism, although in some cases, a separate theft protection plan must be purchased.

The CDW waives the rental company's fees for repairing the car and any loss of use charges that occur while the vehicle is being repaired. This can save the renter from having to pay high repair and administrative fees out of pocket.

However, there are some important exclusions to CDW coverage. It does not cover damage to other cars, bodily injury to other people or passengers, or theft/damage to personal items in the vehicle. Additionally, CDWs typically contain numerous exclusions that will result in a breach of the rental agreement, such as using a cellphone while driving, allowing non-authorized drivers, or driving under the influence.

When deciding whether to purchase a CDW, it is important to consider your existing coverage through personal auto insurance or credit card benefits. In some cases, your personal insurance or credit card may already provide sufficient protection, making the CDW unnecessary. However, if you do not have adequate coverage elsewhere, a CDW can provide valuable peace of mind and protection against unexpected costs.

Waiver of deductible coverage

A waiver of deductible coverage can save you a lot of money if you have multiple insurance policies and need to make more than one claim at the same time.

For example, if a tree falls on your home and your two cars, you would usually have to pay the deductible for each claim. With a waiver of deductible coverage, you only pay the highest deductible involved in your claim. So, if you have a $1,000 deductible on your home insurance and $500 on each of your car insurance policies, you would pay $2,000 without the waiver and $1,000 with it—a saving of 50%.

Another type of deductible waiver is a collision deductible waiver (CDW). This is an optional feature you can add to your car insurance policy to cover your deductible if you are in an accident that is not your fault, usually with an uninsured or underinsured driver. CDWs are not available in all states and may not cover all types of accidents, such as hit-and-runs or single-vehicle accidents.

Collision deductible waivers and uninsured motorist property damage coverage

A collision deductible waiver (CDW) is an optional insurance feature that some auto insurers offer to waive your collision deductible if you have a qualifying claim. If a driver hits you, your collision coverage will still cover the damage to your vehicle, but you won't have to pay your deductible. In some states, the driver must also be uninsured for a CDW to apply.

A CDW may be a good idea if you choose a high deductible for your collision coverage. Auto insurance deductibles typically range from $100 to $2,500. If your deductible is at or above $1,000, then a CDW could save you a lot of money if an uninsured motorist damages your vehicle. With a CDW, you pay a little more upfront to avoid paying a large deductible in the future.

However, a CDW may not apply if you are at fault or partially at fault for an accident. It also may not apply if you are the victim of a hit-and-run, as you must identify the uninsured driver first. In some states, a CDW may only apply if the other driver is uninsured.

Uninsured motorist property damage coverage (UMPD) is different from a CDW. While a CDW waives your collision deductible when a driver damages your vehicle, UMPD directly pays to repair or replace your vehicle when an uninsured driver damages it. In California, UMPD is only available if you don't have collision coverage. If your insurer offers CDWs, you usually must choose between carrying a CDW or UMPD coverage.

CDW in states allowing partial liability

A collision damage waiver (CDW) is an optional insurance feature that some auto insurers offer to waive your collision deductible if you have a qualifying claim. This type of waiver is also sometimes called a Loss Damage Waiver (LDW) or Physical Damage Waiver. CDWs are typically offered by car rental companies as an extra layer of coverage. They are not widely available, and the cost varies depending on the rental company, location, vehicle type, and other factors.

In states that allow partial liability, a CDW can be particularly useful. When you rent a car, you are typically responsible for any damage that occurs during your rental period. This includes not only the cost of repairs but also loss of use charges, towing fees, diminished value, and administrative fees. A CDW can provide peace of mind by covering these costs in the event of an accident or theft.

For example, let's say you rent a car in a state that allows partial liability and are involved in a minor collision. With a CDW, you won't have to worry about the repair costs or any associated fees. The rental company waives its right to charge you for these expenses. Keep in mind that there may be exceptions, such as tire or side mirror damage, or if you are found to be at fault due to speeding or reckless driving.

Additionally, CDWs can protect you from liability in certain situations. For instance, if you are in an accident with an uninsured driver and are not at fault, the CDW can cover the damage to your rental car without you having to pay a deductible. This can be especially valuable in states with a high percentage of uninsured drivers.

When considering a CDW in a state allowing partial liability, it's important to review the specific terms and conditions of the waiver. Coverage can vary, and you should understand what is included and excluded. For example, some CDWs may cover weather-related damage or vandalism, while others may not. Understanding the details will help you make an informed decision about the level of protection you need.

In conclusion, a CDW can be a valuable addition to your rental car agreement, especially in states that allow partial liability. It provides peace of mind, reduces financial risk, and ensures that you are not held liable for certain types of damage or loss. By understanding the terms and conditions of the CDW, you can make an informed decision about the level of protection you need for your rental vehicle.

CDW for rental cars

A collision damage waiver (CDW) is an optional insurance feature offered by car rental agencies to help pay for damage to the rented car. This waiver is sometimes called a Loss Damage Waiver (LDW) or Physical Damage Waiver. The cost of a CDW depends on various factors, including the rental car type and where the vehicle is being driven.

When you rent a car, the rental company may offer you a CDW as an optional extra when you reserve the vehicle or pick it up. This waiver is not to be confused with insurance; it is a waiver of the rental company's right to collect a high deductible from you if the car is damaged. This "waiver" doesn't eliminate the deductible but reduces it. CDW generally costs $10-30 a day and covers most of the car if you're in a collision, but usually excludes the undercarriage, roof, tires, windshield, windows, interior, and side mirrors.

You may want to consider a CDW if you don't have a credit card offering rental car coverage or personal auto insurance. A CDW could save you from having to pay a high deductible on your personal car insurance policy if you damage the rental car. If you don't have car insurance, it's a smart idea to get a CDW since you may not have any coverage otherwise.

It's important to note that a CDW won't cover damage to other cars, bodily injury to other people, injuries to you or your passengers, or theft or damage to your personal items in the rental car. Additionally, depending on the rental company and location, a CDW may not cover interior damage, lost or damaged keys, or damage to the windshield, tires, and mirrors.

Before deciding whether to purchase a CDW for a rental car, it's essential to review your existing insurance policies and credit card benefits to understand what coverage you already have and any exclusions or limitations.

Frequently asked questions