CDW Insurance Explained

By Matt May

CDW insurance Car rental insurance policies can be confusing, and the last thing that most people want to do when they are searching for a rental car is trawl through the small print of the "T&C"s of the rental agreement. Many people struggle with the terminology and don't fully understand what is covered by their insurance policy.

When you hire a car, one of the most confusing aspects of the rental agreement is CDW (Collision Damage Waiver) Insurance, and the exclusions which may apply to the insurance policy.

Below we look at answering some of the most commonly asked questions about CDW insurance cover, CDW excess and what is covered.

What is CDW Insurance?

CDW insurance is a form of rental vehicle insurance cover which protects the hirer in the event of accidental damage to the rental vehicle.

What is CDW Excess?

CDW excess is a maximum amount to which the hirer may be liable in the event of damage caused to the rental vehicle during the hire period. The excess amount would usually be charged in the event of unrecovered theft of the vehicle.

What is meant by Zero Excess CDW?

Terms such as "zero excess", "fully inclusive", "inclusive no excess" and "no excess" when applied to CDW insurance generally refer to an insurance policy where the hirer of the vehicle has no excess liability if accidental damage occurs to the rental vehicle. If the vehicle is involved in an accident, is scratched or dented, the hirer does not have to pay towards the costs of repairing the vehicle.

All rental companies provide basic CDW cover (it is required by law in most European countries), but in some cases there will be a CDW excess amount which must be paid by the hirer of the vehicle in the event of it being damaged or stolen.

How Much is the CDW Excess Amount?

The CDW excess amount to which the hirer of the rental vehicle may be liable is usually proportionate to the value of the rental vehicle - smaller cars will typically have an excess of a few hundred Euros, whereas with larger vehicles the excess figure can be over a thousand Euros.

The cheapest rental car deals often have the highest CDW excess figure, so it is worth checking the rental terms carefully before you hire the vehicle.

What is NOT Covered by CDW?

Depending on the insurance policy there will often be some items excluded from the CDW cover such as loss of keys, and damage to tyres, glass and to the interior of the vehicle. This is standard with most rental companies.

Additionally CDW policies will have exclusions for negligent driving including driving under the influence of alcohol or drugs.

What is "Theft Waiver"?

There is usually an excess liability in the event of theft of the rental vehicle, and insurance which waivers the hirer's liability for this excess may be referred to as Theft Waiver. However in practice, most CDW insurance excess policies also cover the excess liability in the event of theft of the rental vehicle (but not theft of contents from the vehicle).

Will I Have to pay a Deposit on my Credit Card even if I have CDW with Zero Excess?

Most car rental companies will "block" an amount (sometimes referred to as a Security Deposit) on your credit card irrespective of whether you have a CDW excess on your insurance. The reason for this is that there are items which are excluded from the CDW insurance policy e.g. damage to the vehicle caused by negligent driving or whilst driving under the influence of drugs or alcohol. In these cases the hirer would be liable for costs in the event of any damage to the vehicle.

This is the reason why most car rental companies require a credit card - an amount is "blocked" in case damage occurs which is not covered by the CDW policy.

Always read the Terms and Conditions carefully, or please contact Blue Valley Car Hire if you are unsure what is covered by your insurance.