What is Collision Damage Waiver?

There is always alot of fineprint and 'hidden extras' when renting a car, so we have compiled a summary of one of the most frequent questions below:

Collision Damage Waiver is not an insurance, but rather a waiver. The car rental supplier waives their right to charge the renter in the event that there is damage to your rental car or injures someone else. If this eventuates, then the customer or any other insurance must pay for the damages. Alot of car rental companies include minimum CDW by default, others include it for an additional fee. In the USA - Hertz for example includes it in all states except California, whereas Avis includes it in all states except California and Texas.

In the event that the customer does not take out CDW and the rental car is damaged, stolen, vandalised, or hail damage for example, then the customer or their insurance company must pay the cost of the repairs. Additional fees such as administration and loss of use charges may also be applied. Also it is worth noting that CDW usually does not cover the undercarriage, roof, tyres, and windscreen.

Collision Damage Waiver in general costs approximately $15-35 per day and reduces the amount the customer (or insurance company) would need to pay. Depending on the rental car, location and the rental car company the excess may be in the vicinity of $3000-5000. If the customer chooses, alot of car hire companies offer excess reduction packages to remove the excess payable by the customer or car rental company. These extra charges are usually in the vicinity of another $15-35 to reduce the excess to $0.

What is Excess?

Excess is the amount payable by the customer or insurance company if the vehicle is damaged, stolen etc. It is an agreed amount upon signing the car rental conditions. Here is an example:
If the vehicle insured has an excess of $500 and the total cost of repairs is $3,000, then the insured must pay $500 while the insurer pays the remaining $2,500.

I already have Travel insurance covering Car Rental is this enough coverage?

Another option to remove the liability and 'hidden extras' when renting a car is to purchase Travel Insurance that includes car hire coverage. It is nearly always cheaper to buy your travel insurance than purchase extra insurance at the car hire company desk, however for peace of mind some choose to buy many forms of insurance to ensure they are covered.

Our tips - read the fine print, ensure you know the rules, purchase some form of insurance or at least CDW and be careful on the road!