Collision Damage Waiver (CDW) is optional insurance coverage that car rental companies usually offer to their customers to cover damage that may happen due to traffic collisions. Car rental companies usually offer this coverage to their customers multiple times during the rental process. First, during the booking of the rental car and then at the rental desk when the customer is picking up their car. The cost of CDW is calculated as a fixed sum of money per day for the whole rental period. This means that the total cost of CDW depends on the rental duration. When the customer decides to purchase CDW, this sum of money is added to the rental cost. However, car rental companies can also include CDW already in the rental offer.
Usually, CDW covers only damage to the rental car. It does not include any expenses related to liability, such as repair costs for causing damage to other vehicles or any medical costs. The damage covered by CDW generally includes the car’s bodywork but not such items as windows, mirrors, wheels, tyres, and undercarriage. What exactly is covered by CDW can vary between car rental companies. As with any policy, the coverage will not cover any costs if the car rental company’s terms and conditions have been violated.
While having purchased CDW, there is still a certain amount of money that the customer has to pay when damage occurs. This sum is called excess (or deductible in the US).