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Everything You Should Know About Collision Damage Waivers in Car Insurance

By Juhi Walia
19 August 2022, 10:07 AM

Today, commuting by car is one of the most convenient options. However, not everyone can afford to buy one, and hence, they choose to rent a vehicle. When driving a rented vehicle, you must ensure that you don't damage it or any other drivers on the road. But one can never guarantee that, which is why there is a collision damage waiver. A collision damage waiver can help protect the renter, i.e., the car owner, from financial consequences that may arise in the event of a rental car accident.

While a CDW may seem like a good idea, it's important to understand the coverage and limitations before you purchase one. So, before making any decisions about your car insurance policy, read on to learn everything you should know about collision damage waivers in car insurance.

What is a Collision Damage Waiver Cover?

A collision damage waiver is a type of rental car insurance that can help protect you from having to pay for damages to your rental car if it's involved in an accident. It's important to note that a collision damage waiver is not the same as comprehensive car insurance, which covers damages to your own car.

It is also not the same as standard or third-party car insurance coverage, which covers damages to other people and their property. A collision damage waiver essentially relieves you of financial responsibility if your rental car is damaged during your trip.

Difference Between Damage Waiver and Car Insurance

A collision damage waiver only offers cover for rental cars or while you are leasing someone else's vehicle. Meanwhile, car insurance is a type of insurance that covers you against various mishaps. 

Moreover, a collision damage waiver only provides cover to your car's body and not its parts. However, in car insurance, you get the benefits of protection against bodily injury, third-party liability, and more.

Inclusions of Collision Damage Waiver

Depending on your car rental company, the inclusions of your collision damage waiver can vary. It is always in your best interest to check with the company what is included in your damage waiver and what isn't. Here we have listed the general inclusions of collision damage waiver:

  • Towing expenses of your rented vehicle
  • Cover against theft of your rented vehicle
  • Any damage incurred by the body of your rented vehicle

Exclusions of Collision Damage Waiver

Getting familiar with the exclusion of your collision damage waiver is crucial to avoid any misunderstanding while settling the car insurance claim and also for being prepared financially in case of an accident. Here are some general exclusions of the collision damage waiver: 

  • Any damages to your car's internal parts such as the engine or the battery
  • Damages incurred by your car's windshield, wheels, etc.
  • Damages caused due to breaking the traffic rules
  • Damages caused to the vehicle while drunk driving
  • Damages caused to third-party person or property

Read more - Does Your Car Insurance Cover Windshield Damage?

Benefits of Collision Damage Waiver Insurance

A collision damage waiver is a type of car insurance that can help cover the cost of repairs if your rental car is damaged in an accident. This can be a helpful coverage to have if you're renting a car for business or pleasure. Here are some of the benefits of having a collision damage waiver:

1. It can help cover the cost of repairs if your rental car is damaged in an accident.

2. It's an especially good idea if you're renting a car for business and want it to be available at all times, as opposed to paying out-of-pocket every time there's an accident.

3. You won't have to worry about being on the hook for repair costs should something happen while driving on personal time, which might otherwise affect your credit score if it exceeds a certain amount.

4. It gives you peace of mind knowing that your rental company will take care of any necessary damages - but only with this protection plan in place!

So keep this information handy next time you rent a car and make sure to ask whether they offer collision damage waivers.

In Conclusion

A collision damage waiver is something that you can opt for in the course of renting a vehicle and get to enjoy the benefits it brings. You should make sure to read all the terms and conditions before taking a step and always have the option to compare car insurance plans before making your final decision.

Read more- A-to-Z of Car Insurance Terminologies


1. Is it compulsory to purchase a collision damage waiver?

It is optional to purchase a collision damage waiver cover when renting a car. But, it is compulsory by law that your rented vehicle is covered as per the Motor Vehicles Act, 1988.

2. Can a collision damage waiver be bought for a private vehicle?

A collision damage waiver can only be purchased for rental vehicles, not private ones.

3. What should I do if I have to file a claim?

Once you have filed a claim for damages, you may need to submit photos or a report from an authorized third party detailing all of your car's damages. These can help establish how much it will cost to repair your rental. You must follow any specific guidelines set by your car insurance company or car rental provider. 

4. Does the collision damage waiver cover theft of the vehicle?

Yes, if your rented car gets stolen, it will be covered if you have brought the collision damage waiver. 

5. Can my car insurance policy for a private vehicle be converted into a collision damage waiver for a rented car?

No, the car insurance policy and collision damage waiver are two different things and hence can not be converted into one another. 

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