When renting a car, you’ll likely be offered Collision Damage Waiver (CDW)—one of the most common types of rental car protection. But what exactly does it cover? Do you need it, or can you rely on your credit card or personal insurance?
In this guide, we’ll break down CDW, its coverage, costs, and whether you should purchase it for your next rental.
Collision Damage Waiver (CDW) is a rental car protection that reduces or eliminates your financial liability for damage to the rental vehicle in case of an accident or collision.
CDW is not technically insurance—instead, it's a waiver where the rental company agrees not to charge you for certain damages.
Important: CDW does not cover everything (e.g., theft, personal injuries, or third-party liability).
Pro Tip: Always read the fine print, as CDW coverage varies by rental company and country.
| Coverage Type | Covers Vehicle Damage? | Covers Theft? | Covers Personal Injury? | Covers Third-Party Liability? | Other Benefits |
|---|---|---|---|---|---|
| Collision Damage Waiver (CDW) | ✅ Yes | ❌ No | ❌ No | ❌ No | Covers damage from collisions only |
| Loss Damage Waiver (LDW) | ✅ Yes | ✅ Yes | ❌ No | ❌ No | Covers both accident damage and theft |
| Theft Protection (TP) | ❌ No | ✅ Yes | ❌ No | ❌ No | Covers full or partial theft of the car |
| Personal Accident Insurance (PAI) | ❌ No | ❌ No | ✅ Yes | ❌ No | Covers medical expenses for driver and passengers |
| Supplemental Liability Insurance (SLI) | ❌ No | ❌ No | ❌ No | ✅ Yes | Covers damage to other people & their property |
Takeaway: CDW only covers damage to the rental car itself. If you want full protection, combine CDW with Theft Protection and Liability Insurance.
The price of Collision Damage Waiver depends on:
| Car Type | Location | Daily CDW Cost |
|---|---|---|
| Economy Car | USA | $10 – $30 |
| SUV | Europe | $15 – $40 |
| Luxury Car | Mexico | $20 – $50 |
Tip: Some credit cards offer CDW for free, so check your benefits before purchasing.
Tip: Always compare rental company vs. third-party insurance before booking.
✔ Renting in high-risk areas (e.g., Italy, Mexico, Brazil).
✔ Renting a luxury or high-value vehicle.
✔ Your credit card doesn’t cover rental car damage.
✔ You want zero out-of-pocket expenses in case of an accident.
❌ Your rental already includes CDW.
❌ Your credit card offers full CDW with a low deductible.
❌ You’re renting in a low-risk area (e.g., small towns).
Pro Tip: Even if you have coverage, double-check for exclusions (e.g., tires, windshield, and undercarriage).
Collision Damage Waiver (CDW) is a valuable protection that can save you from expensive repair bills. While it may increase your rental cost, it provides peace of mind by covering damage from accidents.
Before deciding, review your credit card benefits, personal insurance, and rental agreement to see if CDW is already included or worth adding.
No, CDW does not cover theft. You’ll need Theft Protection (TP) or Loss Damage Waiver (LDW) for that.
No, CDW is optional, but some rental companies may require it unless you show proof of alternative coverage.
Yes, third-party insurers like RentalCover.com and Allianz offer CDW at lower prices than rental companies.
Most basic CDW policies exclude tires, windshields, and undercarriage damage. You may need Super CDW (SCDW) or extra coverage for that.
Yes, but make sure your credit card or personal insurance fully covers rental car damage before declining.
