What is CDW?

Last updated: Feb 2024 | Estimated Reading Time: 3 minutes

CDW which stands for collision damage waiver is a term used by the car rental industry to provide the renter with a waiver if the rental car is damaged or stolen. It is important to understand the CDW is not insurance. Standard CDW will cover some, but not all, the cost resulting from damage or loss. Most car rental companies will impose an excess on the CDW.  If renting in the USA, the amount the renter is liable for is referred to as the deductible. All car rental companies will have car rental business insurance that provides cover, but they impose an excess to protect their no claim's bonus. 

What does CDW excess mean

 CDW excess means that you will be help personally liable for a fixed amount (the excess) in the event of damage or loss.

How much is the CDW excess?

The CDW excess will be based on the car category, but it will be a sizeable amount, think a thousand plus pounds. The rental companies purposely set it a very high level to encourage you to buy a daily excess waiver. 

What is a daily excess waiver and how does it work?

The daily excess waiver is a daily amount of paid will reduce the amount that you the rental will be held liable for.   In truth, this is a good money making ploy for the rental companies. Most rental companies will offer a range of options that increase in costs as the excess amount is reduced.

Can I buy car or van hire excess waiver insurance?

Car hire excess insurance is available a separate stand-alone policy with a number of providers in the UK. These have proved to be very popular, and for good reason. The stand-alone policy will provide additional cover that is not proved by taking out the more expensive daily waiver offered by car rental companies. Whilst the focus of this page is on rental cars, the same applies to vans.  Van rental excess insurance polices are also available and work the same way. The key difference is that van hire insurance need to be bought on a daily basis, whilst it is possible to buy an annual car hire excess policy.

Can the CDW excess be reduced to zero?

With most rental companies the self drive insurance excess can be reduced to zero by paying the highest daily waiver amount, others will only reduce the excess to or example GBP500. Please check the terms with your preferred rental company.

Is CDW included in the rental price?

CDW is normally included, exceptions exist if your standard car insurance also provides cover for renting cars. This is not the case in the UK or Europe. However, in the USA and Canada, car insurance polices will also cover rental cars. As such, CDW and LDW will not be included in you are renting locally in the USA or Canada. If you book your car in the UK, these will normally be added in the rental price and made obvious during the booking payment phase,

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