What does CDW not cover?

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A collision damage waiver (CDW) does not cover liability, personal medical bills, personal items, or damage caused by reckless or prohibited driving.

🛑 Third-Party Liabilities

  • Other people's property: Damage you cause to other cars or structures.
  • Bodily injuries: Medical costs or injuries for other drivers or pedestrians.

👤 Personal Medical & Belongings

  • Your own medical costs: Injuries to you or your passengers.
  • Personal items: Luggage, phones, or gear stolen from inside the car.

🚗 Excluded Car Parts & Situations

  • Specific vehicle areas: Tires, wheels, windshields, roof, or undercarriage.
  • Prohibited driving: Off-road use, unpaved roads, or towing.
  • Driver violations: Unauthorized drivers, speeding, or driving under the influence.

Is CDW insurance worth it for a rental car?

A Collision Damage Waiver (CDW) is worth it if you want total peace of mind and zero liability for rental car damage, but you may not need it if your personal auto insurance or credit card already covers you.

When CDW Is Worth It

  • No personal auto insurance: If you do not own a car or carry your own auto policy, buying CDW from the rental company is essential.
  • High personal deductibles: If your personal policy has a $1,000 or $2,000 deductible, a CDW lets you walk away from minor damage without paying out of pocket.
  • Avoiding rate hikes: Filing a claim through your personal insurance after a rental car accident can raise your future insurance premiums. A CDW prevents this.
  • International travel: Many personal auto policies and credit cards do not work outside your home country, or they exclude specific regions (like Ireland or Italy), forcing you to buy the rental agency's Renting Cars and the Collision Damage Waiver (CDW) in Europe by Rick Steves.
  • Hassle-free claims: Buying the agency's waiver usually means an easy "walk-away" return if something happens, avoiding battles between your credit card company and the rental agency.

When You Can Skip CDW

  • Credit card coverage: Many major credit cards provide collision damage coverage for free if you charge the full rental to that card and decline the rental company's Should You Buy Car Rental Insurance? - Consumer Reports. (Note: This is usually secondary coverage in your home country, meaning it kicks in after your personal auto insurance).
  • Strong personal auto policy: If your existing auto insurance includes comprehensive and collision coverage that explicitly extends to rental cars, you are already protected (minus your deductible).

What does CDW insurance cover?

A Collision Damage Waiver (CDW) covers the cost of repairing or replacing your rental car if it is damaged, totaled, or stolen.

What CDW Covers

  • Vehicle damage: Collisions with other cars or stationary objects (like poles or fences), regardless of fault.
  • Theft and vandalism: Stealing of the vehicle or damage from break-ins.
  • Weather events: Damage caused by hail, floods, fire, or falling objects.
  • Associated fees: Towing charges and the rental company’s lost income while the vehicle is out of service for repairs.

What CDW Does NOT Cover

  • Third-party liability: Injuries or property damage you cause to other people or their vehicles.
  • Personal injuries: Medical bills for you or your passengers.
  • Excluded parts: Depending on the provider or country (especially in Europe), basic CDW may exclude tires, windshields, windows, and the undercarriage.
  • Reckless behavior: Damage that happens while breaking the law, driving under the influence, or violating the rental agreement (such as letting an unauthorized driver take the wheel).

Does CDW cover scratches?

Yes, a Collision Damage Waiver (CDW) typically covers bodywork damage like scratches and dents, provided the damage is part of a covered incident and not explicitly excluded.

What You Need to Know About CDW and Scratches

  • Bodywork Protection: Standard CDW (or Loss Damage Waiver/LDW) generally waives your financial responsibility for physical damage to the car's exterior body, including bumps and scratches.
  • Deductibles/Excess: Even with a CDW, you may still be subject to a deductible or excess fee. If the cost to fix a minor scratch is less than your deductible amount, you might still have to pay for the repair out of pocket.
  • Thresholds for Minor Scratches: Many rental companies have a size threshold (e.g., scratches under a certain length or depth) that they consider normal wear and tear and won't charge for at all.
  • Exclusions: CDW does not cover intentional damage, gross negligence (like driving under the influence), or damage outside the main bodywork (such as glass, tires, and undercarriage in basic plans).

Should I decline collision coverage?

You should decline collision coverage only if your car is paid off, its market value is low (typically under $4,000 to $5,000), and you can comfortably afford to replace or repair it out of pocket.

When to Drop Collision Coverage

  • No active loan or lease: Lenders and leasing companies legally require collision coverage until the vehicle is fully paid off.
  • The 10x Rule: If your car's actual cash value (check via Kelley Blue Book) is less than 10 times your annual collision premium, paying for the coverage usually does not make financial sense.
  • High deductible impact: If your deductible is $1,000 and your car is only worth $3,000, your maximum payout after a total loss is just $2,000—making the annual premiums a poor investment.
  • Ability to self-insure: If you have enough emergency savings to buy a replacement vehicle immediately without facing financial hardship, you can drop the coverage.

When to Keep Collision Coverage

  • Car has high value: If your vehicle is worth more than $5,000 or is a reliable primary mode of transportation you cannot afford to replace.
  • High-risk driving: If you commute long distances through heavy traffic or harsh weather where your risk of an accident is higher.

Tip: Even if you drop collision coverage, experts often recommend retaining comprehensive coverage. It is usually inexpensive and protects your parked or driven car against non-collision events like theft, vandalism, fire, weather, and animal strikes. You can review your options or adjust your policy directly by logging into your provider's portal, such as Progressive.

Should I Buy Additional Insurance From a Rental Car Company?

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Who pays if you crash a rental car?

Who pays for a crash in a rental car depends on who caused the accident and the types of insurance coverage you have.

If Another Driver Caused the Crash

  • Other driver's insurance: The at-fault driver's liability insurance pays for the damage to the rental car and your medical bills.
  • Your auto policy: If you have rental reimbursement or collision coverage, your own insurer can fix the car faster and then collect money from the other driver later.

If You Caused the Crash

  • Collision Damage Waiver (CDW): If you bought this waiver from the rental company, you do not have to pay for the damage to the rental car.
  • Personal auto insurance: If your own car insurance policy includes collision and comprehensive coverage, it usually applies to a rental car. You must pay your deductible.
  • Credit card coverage: Many credit cards offer secondary or primary rental car insurance if you used that card to pay for the rental.
  • Out of pocket: If you have no insurance and bought no waivers, you must pay the rental company for all repairs and third-party damages.

Hidden Fees

  • Loss-of-use fees: The rental company may bill you for the days the car sits in the repair shop and cannot be rented to others. You can check details on these charges at Reyes Law.
  • Administrative fees: The rental agency might charge processing fees for handling the paperwork.

What is the best insurance to get when renting a car?

The best rental car insurance is usually the Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW) combined with Supplemental Liability Insurance (SLI), but you may already have this coverage through your personal auto policy or credit card.

When You Don't Need to Buy Counter Insurance

  • Personal Auto Policy: If you already own a car with full coverage (collision, comprehensive, and liability), your personal insurance policy usually extends to a standard rental car for personal use. Check your policy or call your agent to confirm your deductible and limits.
  • Credit Card Benefits: Many major credit cards provide free rental car coverage if you pay for the entire rental with that card and decline the rental company's collision waiver. Most credit cards offer secondary coverage (which pays your deductible after your personal auto insurance), though a few select travel cards offer primary coverage.

When You Should Buy Coverage at the Counter

  • You Don't Own a Car: If you do not have a personal auto policy, you lack liability coverage. You should purchase the rental company’s Supplemental Liability Insurance (SLI) and a Loss Damage Waiver (LDW) to protect against damage and lawsuits.
  • Traveling Internationally: U.S. auto insurance policies often do not work outside the U.S. and Canada. Check your provider before you go, and buy local liability and CDW/LDW coverage if your domestic policy or credit card is excluded.
  • Avoiding Premium Hikes: Buying a CDW/LDW directly from the rental company means that if you get into an accident, you hand the keys back without filing a claim on your personal insurance or risking higher rates.

Should you take out extra insurance when renting a car?

You usually do not need extra rental car insurance if your personal auto policy and credit card already cover damage, theft, and liability.

Review your current options and potential gaps to make the right choice at the rental counter.

When You Can Skip Extra Insurance

  • Personal Auto Policy: If you have full coverage (liability, collision, and comprehensive) on your own car, that protection often extends to a personal rental vehicle in the U.S. and Canada.
  • Credit Card Benefits: Many credit cards provide rental car coverage if you use that card to pay for the entire rental. Check if your card offers primary or secondary damage protection.
  • Homeowners or Renters Insurance: These policies often cover personal items stolen from inside a rental car.

When You Should Buy Extra Insurance

  • Traveling Abroad: Most U.S. auto policies and credit card coverages do not work outside the U.S. and Canada.
  • No Personal Auto Policy: If you do not own a car or carry only state-minimum liability, you lack coverage for damage to the rental itself.
  • Special Vehicles: Standard policies and credit cards often exclude luxury cars, large SUVs, cargo vans, moving trucks, and RVs.
  • Business Travel: Personal auto insurance and personal credit cards usually do not cover work-related rentals.
  • Avoiding Rate Hikes: Buying a Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW) from the rental company prevents a personal insurance claim and deductible if an accident occurs.

Is LDW better than CDW?

Loss Damage Waiver (LDW) is generally "better" than a Collision Damage Waiver (CDW) because it offers broader protection, combining collision damage with theft and vandalism protection.

Coverage Differences

  • Collision Damage Waiver (CDW): Covers the cost to repair physical damage to your rental car if you get into an accident. It typically does not cover vehicle theft, vandalism, or damage to tires and windshields.
  • Loss Damage Waiver (LDW): Combines everything a CDW covers with added protection against theft, total loss, and vandalism.
  • Interchangeable Terms: Many car rental companies in the U.S. use CDW and LDW interchangeably in marketing, but you must always read the exact contract to confirm what is included.

Cost and Key Rules

  • Cost: LDW usually costs slightly more or ranges similarly to CDW, typically between $10 and $30 per day depending on the vehicle and location.
  • Not True Insurance: Both CDW and LDW are technical waivers that transfer the financial responsibility of vehicle damage or loss from you to the rental company, rather than functioning as traditional liability insurance.
  • Exclusions: Neither option covers liability for injuries or damage to other people's property. Breaking the rental agreement terms—such as speeding, driving on unpaved roads, or leaving keys in the ignition—can completely void either waiver.
  • On PersonalFinanceCanada, opinions are mixed regarding deductibles; some basic waivers carry high out-of-pocket deductibles unless you upgrade or use specific credit card benefits. You can read more about specific provider differences in this guide on RentalCover.

How much does Enterprise charge for CDW?

The Enterprise daily charge for a Collision Damage Waiver (CDW)—which Enterprise officially names the Damage Waiver (DW)—typically ranges between $15 and $49.99 USD per day. According to the official Enterprise FAQ, standard rates fluctuate generally between $22.99 and $39.99 USD per day ($30–$54 CAD) depending on your pickup location and vehicle class.

The exact price varies based on a few main factors:

  • Vehicle Class: Economy and compact vehicles sit on the lower end of the spectrum (around $15 to $25 per day), while large SUVs, trucks, and luxury vehicles hit the higher range ($35 to $49.99 per day).
  • Location: Daily rates vary significantly depending on local branch pricing and state regulations.

How to Check Your Exact Rate

Because pricing is dynamic, you can view the exact cost for your specific trip before booking by starting a reservation on the Enterprise Website. Once you select your vehicle class type, the optional Damage Waiver price will be itemized on the "Review & Add-Ons" page before you confirm the rental.