What is CDW Insurance in Rental Car Contracts?

CDW stands for Collison Damage Waiver, and while this might appear to be one of the more expensive insurance options for your car rental, it is definitely the most effective, most comprehensive, and will save you from a serious headache should you get into an accident while driving. There are a variety of insurance options when renting a car in Europe, including Theft Protection, but this add-on is most definitely worth it.

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What is CDW Insurance?

CDW Insurance means the car rental company waives the right to collect a high deductible from you if the car is damaged, and most importantly it covers most of the car if you are in a collision. It usually costs around $10-30 per day, and significantly reduces the deductibles owed if you do have an accident or there is damage to the vehicle.

Essentially, the rental company waivers their right to make you, the renter, pay for damages to the car. If you do have an accident, or the car is stolen, without CDW Insurance you will have to pay for all of the repairs and recovery charges, which can quickly become tens of thousands of dollars. With CDW insurance you only have to pay an excess or deductible, which will be significantly less. There are also options on some vehicles for an Excess Refund--more on that later.

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What is Loss Damage Waiver?

A Loss Damage Waiver, or LDW, is essentially the same thing as a CDW. If the car is stolen or damaged and you do not have LDW or CDW Insurance, then you will have to pay the full cost of repair and potentially some additional paperwork charges (depending on where you rent the car from). These waivers also cover vandalism, loss of use and liability.

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Do I Need CDW Rental Insurance?

It's difficult to know what is going to happen on your road trip, but there is certainly a value to enjoying peace of mind while traveling. CDW Rental Car Insurance shifts all responsibility from the renter to the car rental company. The minimum liability insurance afforded to your rental car without any add-ons will mean you are not fully covered if something happens to the vehicle while in your care, but with CDW you can know you are fully covered while on your trip. Deciding whether or not you need to purchase CDW or LDW insurance is a personal choice in which you have to balance the potential risk against the additional cost.

Our take: Nobody wants to need insurance, but it's much better to have it and not need it than to need it and not have it.

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What is Excess Insurance or Excess Deductible for Rental Cars?

A lot of insurance companies include an excess or deductible with their insurance policy. This means that if something happens to the car you are liable to pay a charge to access your insurance. Some companies, like Auto Europe, refund this excess on some vehicles--this is known as an Excess Refund. This is an add-on, but will most definitely give you peace of mind when you are on the road and if something does happen to you or the car. Look out for rentals that include collision (CDW) and theft protection insurance (TP) with Excess Refund/Refundable Deductible stated on the website.

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If I Don't Choose CDW Car Rental Insurance, What are My Other Options?

First of all, as above, you can look for CDW and TP policies that have zero excess, just look out for these on Auto Europe's website. This means you won't be responsible for any repair fees or additional insurance charges should you get in an accident while driving your rental car.

Your car rental with Auto Europe also includes third party liability insurance, fire insurance, value added taxes, and unlimited mileage with the rental. If you are renting a car in Italy, or Ireland, the CDW and Theft Protection are included in the price of your rental, as they are mandatory by law when driving in these nations. If you're renting elsewhere in Europe or in other destinations around the world here's a quick breakdown of some other insurance and coverage options for protection:

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• Credit Card Coverage: With the exception of vehicles over $50,000, exotic cars, antique cars, and off-road vehicles including 4x4s, motorcycles, trucks, cargo vans, full-sized vans and camper vans, you can use your credit card rental car insurance (if your credit card company offers this service to you--be sure to check ahead of time). The problem with credit card coverage is that it is limited to rentals under 30 days, and most credit cards will file a claim with your personal insurance company before reimbursing the deductible (this could also affect your personal driving records and insurance premiums).
  
  Our Take: You don't feel like you're paying anything extra, but this option can be a real hassle to get reimbursed if you get into an accident.


• Personal Automotive Coverage:
  It is possible to use your current car insurance to cover your rental, however, there are a few considerations to be made: Your coverage may not cover rentals, your own car's insurance premium could be raised if you have to claim for your rental, and a lot of these policies do not cover damage or theft, third party liability or medical costs.
  
  Our Take: While this seems like a good way to save a few dollars, the potential increase in your annual premiums can end up being more expensive than if you just purchased insurance separately when renting your car.

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Choosing the Best CDW Insurance with Auto Europe

Having CDW insurance is a necessity when renting a car, however, if you do decide on other options, check with your bank and current insurers about exactly how much coverage you'll be offered and be sure to ask about the pitfalls. If you have questions, we also recommend speaking with your car rental company. While there's a stigma that rental car companies are always trying to push insurance ... the truth is that as experts in the industry we've seen first hand the nightmares that can happen if you don't opt for coverage.

The best option, for peace of mind, is to take out CDW Insurance or Damage Loss Waiver with the Auto Europe. Most rental locations and vehicles offer an inclusive option, which will cover theft and collision, and this is the option that we recommend, particularly when renting a car in another country.