Collision Damage Waiver: What is it? (2022)

Katie Powers
Written by
Katie Powers
Photo of an Insurify author
Written by
Katie Powers
Insurance Writer
Katie Powers is an insurance writer at Insurify with expertise in personal finance and auto insurance topics. She strives to help consumers make better financial decisions. Prior to joining Insurify, she completed her undergraduate and graduate degrees at Emerson College. Her work has been published in St. Louis Magazine, the Boston Globe, and elsewhere. Connect with Katie on LinkedIn.
Jackie Cohen
Edited by
Jackie Cohen
Photo of an Insurify author
Edited by
Jackie Cohen
Editorial Manager
Jackie Cohen is an editorial manager at Insurify specializing in property & casualty insurance educational content. She has years of experience analyzing insurance trends and helping consumers better understand their insurance coverage to make informed decisions about their finances.Jackie's work has been cited in USA Today, The Balance, and The Washington Times.

Updated June 15, 2022

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Collision damage waivers come into play to provide some element of insurance coverage for rental vehicles. At the time of an auto rental, the rental car company will likely offer the customer a collision damage waiver add-on aimed to provide theft and damage insurance for the renter. This waiver typically comes with an additional cost, making it important to consider all options.

Whether you’re renting a car for a vacation or business trip or driving your own car, an affordable car insurance policy is a must. Insurify’s handy quote-comparison tool allows auto insurance customers to compare monthly quotes from dozens of the nation’s top auto insurance providers. Discover personalized auto insurance policy quotes at an affordable price today.

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Quick Facts

  • A collision damage waiver is an add-on service available for rental vehicle customers.

  • Drivers with clean driving records typically pay less for their personal auto insurance.

  • Many insurance companies offer savings for customers who bundle insurance policies.

What is a collision damage waiver?

What is a collision damage waiver?

CDWs are optional coverage which provides protection to drivers of rental cars.

An optional service from rental car companies, the collision damage waiver (or CDW) completed during the rental agreement process provides coverage for the renter in the event of physical damage to their rental vehicle due to a car accident, vandalism, or theft. If damage does occur, renters within the United States with the waiver do not pay for repair fees or a deductible.

Some companies use the terms loss-of-use coverage or loss damage waiver (LDW)—referring to coverage while a car is repaired—interchangeably with the term collision damage waiver. Liability insurance related to damages to other vehicles or bodily injury medical costs is not included under the collision damage waiver, which only covers damages to the rental car.

See More: Best Car Insurance Companies

How much does a collision damage waiver cost?

Collision damage waivers vary in cost depending on a number of factors, including the rental company, the rental vehicle, and the plan for where the rental car will be driven. These waivers will increase in cost when the perceived possibility of vehicle damage increases. For example, companies will charge more for a waiver if a fancy sports car is rented and driven around a high-traffic area.

Collision Damage Waiver Estimated Costs by Company

Most car rental agencies calculate costs for collision damage waivers based on the specific auto rental and rental period. Before purchasing a collision damage waiver, be sure to review your existing insurance plan because you may already have rental car insurance coverage. Estimated costs from some of the top rental companies are available in the list below.

  • Enterprise: Coverage ranges from $10 to $20 per day, according to various online sources.

  • Alamo: Coverage ranges from $9 to $26.99, according to various online sources. For California drivers, costs range from $10.99 to $500 per day.

  • Hertz: The collision damage waiver costs $45 per day, no matter what kind of vehicle you’re renting.

  • Avis: The company advertises costs as low as $9 per day.

  • U-Haul: The collision damage waiver from the company only applies to smaller pickup trucks and vans. The waiver lays out a $150 deductible for the majority of accidental damage.

See More: Car Insurance Quotes

Credit Card Companies Offering Collision Damage Waivers

As a further incentive to their customers, many credit card companies provide a collision damage waiver for individuals who pay for their rental vehicle with their credit card. Even if your existing insurance plan provides coverage for a collision damage waiver, the extra offering from your credit card company can be supplemental. Find credit card coverage specifics listed below.

  • Chase: Chase Sapphire Preferred cardholders earn coverage for themselves and any additional drivers added to the rental agreement. The waiver covers any physical damage to or theft of the rental vehicle, as well as any towing charges or loss-of-use costs.

  • Visa: To earn a collision damage waiver from Visa, the cardholder simply needs to complete the rental car payment with their Visa credit card and not purchase the rental company’s waiver. Visa then covers any vehicle damage related to collision or theft.

  • Mastercard: The MasterRental program provides coverage for physical damage, loss-of-use costs, and any towing fees related to the rental vehicle. This applies as long as the vehicle’s MSRP (manufacturer’s suggested retail price) falls below $50,000.

  • Bank of America: The company’s credit cards all provide their cardholders with rental car benefits. The supplemental damage waiver adds to your existing car insurance and provides reimbursement in the event of vehicle damage from collision or theft.

  • American Express: Unlike most credit card companies, American Express provides some liability coverage (up to $5,000) to pay for rental car damage and medical expenses. To activate this coverage, American Express Platinum cardholders simply have to pay for the rental car with their credit card.

See More: Cheap Car Insurance

Do I need a collision damage waiver if I have car insurance?

Purchasing a collision damage waiver for those with existing car insurance may not be needed if they have collision coverage and comprehensive coverage. Those with high deductibles or lackluster coverage should consider paying for a collision damage waiver.

Rental car drivers traveling out of the country to Canada or elsewhere may face exclusions from their existing insurance coverage that make purchasing a waiver worthwhile. Some policies do not transfer to another country, making separate rental coverage a necessity. Furthermore, purchasing a waiver can give peace of mind to those worried about increasing insurance rates.

See More: Best and Worst Sites to Compare Car Insurance

How to Find Cheap Auto Insurance in Minutes

While purchasing the collision damage waiver add-on is important for some individuals renting a vehicle, existing car or travel insurance coverage and coverage from various credit card companies may make it unnecessary. Having comprehensive coverage and collision coverage makes the process of shopping for a rental vehicle easier and more affordable for authorized drivers.

Shopping around for affordable car insurance policies increases an individual’s chances of finding the most affordable insurance rates that best meet their specialized car insurance needs. With the help of Insurify’s car insurance quote-comparison tool, users compare monthly quotes from dozens of the nation’s top car insurance providers in just a matter of minutes.

Frequently Asked Questions

  • A collision damage waiver, sometimes referred to as a loss damage waiver, is an optional add-on from rental car companies. In the event of a car accident or theft resulting in physical damage to the rental vehicle, the waiver covers the associated fees for the vehicle renter. This coverage may also be included in existing insurance plans or by various credit card companies.

  • Collision damage waivers make the most sense for uninsured and underinsured drivers, renters driving in countries besides the United States, and people concerned about increasing the insurance rates of their existing insurance policies. Drivers with comprehensive insurance coverage and collision coverage typically do not need to purchase the supplemental add-on.

  • Collision damage waivers vary in cost depending on the rental company, rental vehicle, and intended driving plan for the rental period. On the lower end of the cost spectrum, drivers can purchase a collision damage waiver for their rental for as little as $9 to $20 per day. Prices tend to increase for drivers renting an expensive car or driving in a high-traffic or high-crime area.

  • Finding cheap car insurance that meets your specialized insurance needs requires some time spent shopping around for the lowest rates. The Insurify car insurance quote-comparison tool allows users to easily compare monthly quotes from dozens of the nation’s top car insurance providers. Try it out for yourself today, and discover how you can save big!

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  • Data scientists at Insurify analyzed over 40 million auto insurance rates across the United States to compile the car insurance quotes, statistics, and data visualizations displayed on this page. The car insurance data includes coverage analysis and details on drivers' vehicles, driving records, and demographic information. With these insights, Insurify is able to offer drivers insight into how their car insurance premiums are priced by companies.

Katie Powers
Written by
Katie Powers
Linkedin

Insurance Writer

Katie Powers is an insurance writer at Insurify with expertise in personal finance and auto insurance topics. She strives to help consumers make better financial decisions. Prior to joining Insurify, she completed her undergraduate and graduate degrees at Emerson College. Her work has been published in St. Louis Magazine, the Boston Globe, and elsewhere. Connect with Katie on LinkedIn.

Learn More
Jackie Cohen
Edited by
Jackie Cohen
Linkedin

Editorial Manager

Photo of an Insurify author
Edited by
Jackie Cohen
Editorial Manager
Jackie Cohen is an editorial manager at Insurify specializing in property & casualty insurance educational content. She has years of experience analyzing insurance trends and helping consumers better understand their insurance coverage to make informed decisions about their finances.Jackie's work has been cited in USA Today, The Balance, and The Washington Times.