Michelle is a lead editor at Forbes Advisor. She has been a journalist for over 35 years, writing about insurance for consumers for the last decade. Prior to covering insurance, Michelle was a lifestyle reporter at the New York Daily News, a magazine.
Michelle Megna Lead Editor, InsuranceMichelle is a lead editor at Forbes Advisor. She has been a journalist for over 35 years, writing about insurance for consumers for the last decade. Prior to covering insurance, Michelle was a lifestyle reporter at the New York Daily News, a magazine.
Written By Michelle Megna Lead Editor, InsuranceMichelle is a lead editor at Forbes Advisor. She has been a journalist for over 35 years, writing about insurance for consumers for the last decade. Prior to covering insurance, Michelle was a lifestyle reporter at the New York Daily News, a magazine.
Michelle Megna Lead Editor, InsuranceMichelle is a lead editor at Forbes Advisor. She has been a journalist for over 35 years, writing about insurance for consumers for the last decade. Prior to covering insurance, Michelle was a lifestyle reporter at the New York Daily News, a magazine.
Lead Editor, InsuranceUpdated: Oct 9, 2023, 6:15am
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When you rent a car, you will be asked if you want to buy optional coverage called a collision damage waiver (CDW). This insurance covers damage to the rental car. It can be a pricey proposition, but it may be worth buying, depending on your own car insurance and credit card coverage.
A CDW covers rental car repair bills if there’s an accident or the car is stolen. It’s a good option if you don’t have:
A CDW may also be worth considering if you:
If you turn down a CDW, the rental car company can charge you for more than car repairs. They also usually charge for:
While your own insurance or a credit card’s coverage may pay for some of these costs, the expenses can vary by company. And in some cases, you have to rely on cooperation from the rental car company.
Rental companies typically offer a CDW when you make an online reservation for a rental car and again when you pick up the vehicle. When you purchase a CDW, the rental car company gives up the right to charge you for damages to the rental car. But there are usually a few exceptions—for instance, for tire and side mirror damage, or for “gross negligence,” meaning you were speeding, racing or driving while intoxicated. The names used for CDWs vary. So study the details carefully before signing.
The cost of a CDW is generally about $30 per day. That means it can hike your rental cost by around $200 a week. Rental car companies can make a profit from selling CDWs, so it’s common for staff to be aggressive when pitching them to customers.
You have options other than buying a CDW from a rental car company. Here are possible alternatives to buying CDW coverage.
Many credit cards provide insurance for rental cars as a benefit, as long as you use the card to pay for the rental. While you won’t pay extra for the benefit, it’s important to know the limitations that might come with your card’s rental car coverage. Here are some key considerations:
If you have car insurance for your own vehicle, it usually extends to rentals and property damage you cause, and covers liability up to your policy limits:
Consider, however, that if you use your own insurance coverage:
Another way to get coverage is to buy a standalone rental car insurance policy. Coverage varies and there are often exclusions, so you want to make sure you read the fine print and understand what’s covered and what’s excluded.
Here’s what to know about getting a separate rental car insurance policy:
You may be able to buy rental car damage coverage from a travel insurance company when you insure your trip. If you choose this option, you may not need the CDW offered by the rental car company.
Certain rental vehicles are typically excluded from coverage such as motorcycles, vans and campers.
Buying rental car coverage from a travel insurance company may come with some handy extra perks as well. For example, OneTrip Rental Car Protector Plan from Allianz Global Assistance includes:
If you have no insurance coverage and the rental car is wrecked or stolen, you’ll need to pay out of your own pocket to cover the loss. This will be an expensive proposition, so consider your options carefully before declining CDW coverage when you have no other applicable coverage.
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Lead Editor, InsuranceMichelle is a lead editor at Forbes Advisor. She has been a journalist for over 35 years, writing about insurance for consumers for the last decade. Prior to covering insurance, Michelle was a lifestyle reporter at the New York Daily News, a magazine editor covering consumer technology, a foreign correspondent for Time and various newswires and local newspaper reporter.
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