If you plan on renting a car, we recommend you accept the Collision Damage Waiver (“CDW”). In most cases, the rental company will look to recover the full value of that vehicle in the event of an incident. In fact, they have the authority (according to most rental agreements) to determine the value of the damaged car. Even a scratch can end up costing you. While you have coverage on your Personal Auto Policy, there are always stipulations and exclusions.
- The CDW can protect you if you are in accident against the cost of repairs, the cost of the rental company not being able to rent out the car and other liabilities. Don’t be afraid to ask the sales representative questions about what their CDW covers!
- You can be charged for the cost of towing. Most PAP policies have very limited tow coverage.
- By purchasing the CDW, you may be able to avoid YOUR auto policy having to pay any damages. Thus saving you a potential rate increase!
- Potential issue: The vehicle you are renting is damaged. Your Personal Auto Policy may have a clause that states their right to inspect the damaged property BEFORE repairs are made. The rental company will typically move to repair immediately. If the Personal Auto Policy carrier did not have a chance to inspect prior to repairs, they will have every right to deny any coverage.
- The Loss Damage Waiver (“LDW”) is similar to that of the CDW but will cover causes of loss other than collision.
For additional car rental information, check out Mackoul’s Car Rental Do’s and Don’ts – Part 1.
Personal Lines Account Manager