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Collision damage waiver (CDW) is a type of protection that takes care of your financial responsibility for loss or damage to the rental car you use, as long as you don't break the rental agreement's terms and conditions. While you don't have to pay for the direct damages, the waiver might charge an excess which means you can still be at risk of significant out-of-pocket expenses if things go wrong.
Collision damage waiver generally covers the following:
Common collision damage waiver exclusions include:
Because there are so many exclusions, a collision damage waiver isn't enough if you want comprehensive protection. Rental car excess insurance, on the other hand, can give you that added protection. Essentially, even if you have CDW, the rental company will still charge you an excess amount if the car suffers loss or damage under your care.
Let's say the worst happens and you end up writing off a rental car completely. Instead of paying out the value of the car, you'll have to pay the excess amount agreed in your rental agreement, which can be thousands of dollars. With the right rental car excess insurance, you can reduce this excess to $0 so you have no further out-of-pocket expenses if your rental car is stolen or gets into an accident.
It can also include cover for windscreens, tyres, roof, underbody and more. Car rental companies usually also offer rental car excess insurance but it normally costs a lot. If you want cheap rental car excess insurance, buy it online; cover starts at $2.83 per day.
Name | International or domestic cover | Eligible driver age | Features | Starting price (per day) | Apply |
---|---|---|---|---|---|
![]() | Both | 19-99 years |
| $9.48 ($0 excess) | Get quote |
![]() | Both | 21-75 years |
| $9.30 ($0 excess) | Get quote |
![]() | Both | 21-71 years |
| $5.68 (with a $300 excess payable) | Get quote |
*Always read through the product disclosure statement (PDS) to make sure the product is suitable for you.
Most car rental companies consider collision damage waiver (CDW) and loss damage waiver (LDW) to be the same thing. In most countries, they come packaged together. However, you often need to purchase them separately in the US and Canada.
For the rental companies that separately define CDW and LDW, CDW provides cover if there's damage to your rental car as a result of an accident while LDW is a combination of CDW and theft protection. That means you'll also be covered for car replacement if your rental car is stolen. CDW also usually excludes windscreen, tyres, interior, undercarriage, roof and side mirror repair. If any of these parts are damaged, you'll likely have to pay the full cost of repairs.
While collision damage waiver is included when you use a rental car in Australia, there are several popular holiday destinations where you'll have to pay extra if you want it.
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