Collision Damage Waiver (CDW)

Definition - What does Collision Damage Waiver (CDW) mean?

A collision damage waiver (CDW) is a waiver of responsibility for someone renting an automobile and not technically a form of insurance coverage. In purchasing one, the buyer cannot be held responsible in the event of any loss or damage to the rental car. The cost depends on various factors, including the rental car model and where the renter plans to drive it.

A CDW is also known as a loss damage waiver.

Insuranceopedia explains Collision Damage Waiver (CDW)

This optional waiver adds an additional daily fee to the rental cost and protects the buyer from the costs of covering repairs in case of damage as well as any loss of use fees while the car is getting fixed. Rental companies typically offer at least once during the rental process. However, certain credit card users may receive it as a benefit of using their credit card to pay for the rental.

Because every state requires some form of automobile insurance for every driver, renters must meet these varying requirements. Declining a CDW often requires offering proof of some form of insurance. If the renter cannot provide they have an alternative type of coverage, they may have to purchase a CDW.

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