1. 920 POINTS
    Frank Lombard CPCU ARM
    Insurance Advisor, Massachusetts


    It is my understanding you will find “CDW” in many car rental agreements and it is an abbreviation for “Collision Damage Waiver”.

    When you rent a car, you are required to sign a rental agreement. Most renters fail to read the agreement but in most cases the agreement states you agree to accept full responsibility should the car is damaged in any way, even if that damage is not your fault!

    For an additional daily charge, often $20 or more, rental companies will not charge you should you return their car with damage or report it stolen. That’s a pretty hefty charge for what many would consider one day's comprehensive and collision coverage. Annualized that amounts to rental customers paying more than $7000 a year just for potential damage to the car!

    Your own car insurance may extend to cover damage to cars you rent but check with your agent or insurer to make sure. Even if your insurance coverage extends to cover a rental car you are driving, it may not cover all the charges the rental company makes you responsible for. Often when signing the rental agreement, you assume responsibility for the loss of value to their car if it is damaged, the loss of rental revenue they lose while the car is being repaired and even their administrative costs incurred as a result of the damage. These costs are usually not covered by most personal auto insurance policies. And more than likely, you have given the rental company permission to put those charges right on your credit card. Be alert! 
    Answered on March 13, 2014
  2. Did you find these answers helpful?

Add Your Answer To This Question

You must be logged in to add your answer.

<< Previous Question
Questions Home
Next Question >>