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Rental Car Damage Waiver: To Buy or Not To Buy

STEWART AIRPORT INTERIORS AND EXTERIORS 9/26/07Whether you are a frequent traveler or an individual who occasionally travels for business or pleasure—when you step up to the rental car desk, you may not be sure what to do when asked if you want the Damage Waiver. That’s understandable because there’s no singular correct answer to that question.  But with a little advance research, you’ll be able to make an informed decision that’s right for you.  Here are things you should consider:


First, what is a Damage Waiver?

It’s referred to as either a Collision Damage Waiver (CDW) or a Loss Damage Waiver (LDW). The scope of the waivers varies by rental company but in essence, it’s an agreement that states as long as you do not violate the terms and conditions of the rental agreement, you are covered for valid damage to the vehicle.  Depending on the specific waiver, it may also cover theft, loss of use (lost revenue to the rental company), vandalism, and administrative costs. 

  • Check the agreement before you travel; agreements vary by state and often include various exclusions.
  • A number of them include a non-waivable fee in the event of a loss.
  • It is not insurance. (The car rental agent is not licensed to advise you on your insurance needs or sell insurance coverage.)
  • It does not provide liability or personal injury protection.
  • The waiver costs an average of $20/day. (That varies by car rental company.)


Information to help you make the decision

Some people always include the waiver for the peace of mind it brings them. Some businesses require their employees to include the waiver on any rental; make sure you know your company’s policy. But if you don’t fall in either of those groups, consider the following:


Your existing car insurance

  • If you currently own and insure a car:  Check your existing auto policy; it may act as primary insurance to cover damage to rented vehicles.  And if you’re not sure what your policy includes, or don’t have your policy handy, just call your Cushman Insurance Group agent.   
  • If you don’t own a car:  You need to take the Liability Coverage from the rental company.  But the Loss Damage Waiver isn’t as clear-cut.  It depends on the rental company policies and any other coverage you may get through the credit card you use to pay for the rental. Read on…


Credit Cards

  • If you pay for your car rental with any one of the major credit cards—Visa, MasterCard, American Express, Discover—you will have some level of protection as long as you follow their program requirements. It is secondary to an existing auto policy (paying your deductible), or primary if you don’t have auto insurance or don’t have collision coverage on your policy.
  • Understand that coverage varies by credit card so make sure you understand the benefits available to you.  CLICK HERE for a 2012 comparison assembled by Card Hub.
  • Remember a few key points:
  1. Every card program includes the requirement that you decline the rental company collision or loss damage waiver.
  2. You must charge the entire rental cost on the particular credit card you are relying upon for coverage.
  3. Check any restrictions on who is authorized to drive the vehicle. (Some cards restrict it to the cardholder only.)
  4. Exact coverage varies not only by credit card company, but also by the specific type of card (e.g. Gold, Platinum, etc.)  Use the card with the best coverage for you. Click on the card links below to see your card’s most current webpage for coverage:

VISA      MasterCard     American Express      Discover

  • American Express offers a Premium Car Rental Protection plan.  A $25 flat fee provides up to 42 consecutive days of coverage when you pay for your car rental with an enrolled Amex card.  It provides primary theft and damage coverage, and like other credit card car rental protection, allows you to make a claim without paying a deductible. Keep in mind, it does not provide liability protection. To learn more, CLICK HERE.


Safe Driving

No matter what you decide to do about the damage waiver the next time you rent a vehicle, safe driving is your critical starting point.  Any of the following can void a rental CDW, and potentially cost you your license or (most important) your life: Driving under the influence of alcohol or drugs, speeding, texting or making phone calls while driving, any number of moving violations including not wearing your seat belt, and much more. 


So do your research before your next car rental, call your Cushman Insurance Group agent to confirm the coverage you do have on your existing auto policy (if you’re not sure), and have a great, safe trip!