Is collision damage protection necessary?
Asked by: Prof. Daniela Pouros IV | Last update: August 29, 2025Score: 4.7/5 (24 votes)
Is collision damage protection mandatory?
If you are leasing your vehicle or making payments (as opposed to owning your vehicle outright), your finance company may require that you purchase both collision coverage and comprehensive coverages. Check with your auto lender about whether collision coverage is required.
Do I really need collision coverage?
While people seem to believe it's the most important coverage, it really isn't. It's important, but it isn't the most important. Collision pays for your vehicle's repair/replacement if it gets damaged/wrecked. Fault doesn't enter into it.
Do I need CDW if I have insurance?
If you already have collision coverage, a collision damage waiver may still make sense if: Your policy excludes coverage for rental vehicles. You have a high collision deductible (many collision waivers don't have a deductible) You plan to rent a car in a country where your insurer doesn't provide coverage.
Can you decline CDW?
But if you've done the homework and know that you're fully covered by your card, you can confidently decline. In rare circumstances, the rental agent may tell you you're required to pay for some form of insurance.
What is a Collision Damage Waiver?
Is CDW mandatory in USA?
Collision Damage Waiver (CDW) - Collision Damage Waiver (CDW) is not insurance. The purchase of CDW is optional and not required in order to rent a vehicle. You may purchase optional CDW for an additional fee.
Can you decline collision coverage?
Usually, you have to have comprehensive and collision on a financed car because most lenders require it. However, if your vehicle is paid in full, you have the option to drop the coverages.
Should I add collision coverage on a rental car?
It's up to you whether the risks of paying a deductible outweigh the expense of the damage waiver. The longer you plan on renting the car, the less sense buying the rental insurance probably makes. Comprehensive – This applies to damage that occurs to a car while it was not being driven.
Do I need CDW if I have excess insurance?
No, car hire excess insurance is different to a collision damage waiver (CDW). A CDW means you don't have to pay the full cost of damage to your hire car if you're in an accident. Car hire excess insurance covers the excess you pay on your insurance claims (an amount of a claim you have to pay yourself).
What does CDW actually do?
CDW insurance typically covers any damage to a rental vehicle while in your possession, such as driving in a city and getting into a fender bender. It also covers theft of the vehicle and vandalism. Waivers can cover lost income a rental car company might charge while the car is being repaired.
Why would you not want to have collision coverage?
Collision insurance only pays up to the current market value of your car, minus your collision deductible. Since older cars typically have a low market value, collision coverage won't pay out much, if anything, in a total loss. Be sure to research your car's worth before deciding on whether to drop the coverage.
Is it better to have a $500 deductible or $1000?
Remember that filing small claims may affect how much you have to pay for insurance later. Switching from a $500 deductible to a $1,000 deductible can save as much as 20 percent on the cost of your insurance premium payments.
Is hitting a mailbox comprehensive or collision?
Collision coverage also includes single car accidents like hitting a guardrail or hitting a curb. For example, if you hit a mailbox or fence post that leaves scratches down the side of your vehicle, collision coverage could cover the cost of repairs.
What do I do if I dont have collision coverage?
If you own your vehicle outright and choose not to carry collision coverage, you will have to pay to repair or replace your vehicle out of pocket if you're involved in a single-vehicle accident or found at-fault in an accident.
How much does CDW cost?
Key Things to Know About Collision Damage Waivers
Collision damage waivers for economy vehicles typically cost $10 - $30 per day. Damage waivers may cover theft, depending on the rental company. Personal auto insurance and credit card benefits serve as alternatives to collision damage waivers.
What is a good deductible for collision insurance?
Most drivers choose a $500 auto insurance deductible, but policies with higher deductibles cost less. Choosing a plan with a higher deductible to get a lower insurance rate means higher out-of-pocket costs when filing a claim.
Should you buy CDW?
Making the Right Choice: Consider your personal insurance coverage, the cost of the waiver, and the potential financial impact of an accident. If your existing insurance is sufficient, you might not need the CDW.
What is not covered by CDW?
Collision Damage Waiver (CDW) may cover damage to the rental vehicle but may not be liable for damage to other vehicles or personal belongings. CDW does not cover personal injuries, personal belongings, or damage caused by negligence.
Does CDW cover scratches?
CDWs often cover damage to the car's bodywork – think dents and scratches – but many other parts of the vehicle won't be covered. These include (but are not limited to) vehicle parts and non-vehicle items like: Windows and mirrors. Wheels and tires.
How important is collision coverage?
If you don't have collision coverage under your own auto policy you will be at the mercy of their determination of fault, and thereby the value they owe for your car damage. In this example, the at-fault carrier would deduct your repair bill by 25% or even 50% which is just an awful position to be in.
Does your insurance policy does not automatically cover damage to rental cars?
If you don't have liability, comprehensive and collision coverage on your own car, then your insurance likely will not cover your rental car if you get into a collision or damage the rented vehicle.
What is the difference between CDW and LDW?
CDW covers damage to the rental vehicle in case of an accident. LDW offers the same protection, as well as coverage if the car is stolen.
Why would someone not carry collision insurance?
Collision insurance is a good way to protect your car, but there may be times it doesn't make sense. Collision coverage isn't required by law, so if your vehicle is older or has a value equal or almost equal to your deductible, you may decide not to carry collision coverage.
Do I need uninsured coverage if I have collision coverage?
California law does not require you to carry uninsured motorist (UM) or underinsured motorist (UIM) coverage—so, legally, you don't need either one. However, UM/UIM is an important and commonsense coverage to carry.
When to drop full coverage auto?
You can drop full coverage once you've paid off your vehicle. It can make sense to do so when the costs outweigh the benefits, such as if repair costs are more than your car is worth or if your driving history indicates you have a low claim-filing risk.