When you rent a car, you’ll be offered a chance to buy a collision damage waiver (CDW). Some insurance experts advise against this, but you probably should think twice before declining. Here’s why:
Reasons not to purchase CDW coverage
1. A CDW is expensive relative to the cost of the rental. Over several days the CDW charges can substantially increase the cost of the rental.
2. Your regular auto insurance policy should cover you for liability and collision fees.
3. Some credit card companies may reimburse you for the deductible and other out-of-pocket costs.
But…
1. Without a CDW, you will have to pay for damages yourself or file a claim with your insurer.
2. A claim will show up on your insurer’s records, possibly leading to higher premiums or making it more difficult to buy affordable insurance from another insurance company in the future.
3. The process for claiming reimbursement from a credit card company is long and complex.
4. If you decline the waiver, you will be liable for damages determined by the rental company and its repair or body shops. With the CDW, these costs fall on the rental company.
And finally…
1. Without a waiver, you will have to pay “loss of use” fees. You agree to reimburse the rental company for the income the car would have produced if it was not damaged. These fees can be substantial.
2. You might also be charged administrative costs and towing fees.
Do you want more information on the pros and cons of CDWs, or have questions about home or auto insurance? Mike Leonard Insurance Agency in Carrollton, TX can help. To make an appointment, contact us.