Collision Damage Waiver Cover Under Car Insurance: Explained

A car is a convenient travel option when it comes to traveling within the city and even outside. It gives you the freedom of mobility freeing you of any dependence on public transport. But for some, owning a car may not be financially wise. In such cases, renting a car is another smart alternative. While owning a car requires you to incur high upkeep costs, renting frees you from this burden. But, how do the insurance rules play out when you rent a car? This article explains the Collision Damage Waiver (CDW) cover and how it works for rented cars.

What is Collision Damage Waiver?

Collision damage waiver or CDW cover is an insurance plan that can be bought when renting a car. The coverage of a CDW plan offers a waiver to the driver in the unfortunate event of a collision. However, you need to note that the waiver under the CDW plan is subject to the terms and conditions of the plan.

How Does a Collision Damage Waiver Work?

A Collision Damage Waiver (CDW) is an optional add-on offered by car rental companies to reduce your financial liability in case of damage to the rented vehicle due to a collision. By purchasing a CDW, you are not required to pay the full repair costs; instead, you may only be responsible for a predefined deductible. However, it doesn’t cover damages due to negligence or unauthorized use.

Collision Damage Waiver Plans and Rental Cars

In India, the rental car business was always unorganized. There were mostly local players that offered vehicles for rent but things have changed in the last decade. With new domestic companies and foreign multinationals entering the scene, renting a car is now easy. Tech-based operations support this growth and a ride can be booked in just a few simple steps. But for vehicle owners in India, it is mandatory to buy car insurance online or offline. So is it the same for rented cars? Let’s look at how it differs.

1. Since it is mandatory to buy insurance for all vehicles registered in the country, they must be insured.
2. Be it commercial vehicles or private vehicles, insurance requirements under the Motor Vehicle Act of 1988 are compulsory.
3. All such cars must have at least third party car insurance. This policy compensates for third-party injuries, death, and even property damage.

*Standard T&C Apply For rented cars, the rental company might have a policy that complies with the law, but there are two outcomes based on whether you buy a CDW cover or not -

1. If you purchase a CDW cover and end up damaging the rented vehicle, you will not be required to pay for the repair costs.
2. On the other hand, not having a CDW cover for your rented car will lead to financial losses from the repairs based on the terms of the rental agreement.

*Standard T&C Apply

What is Included in the Collision Damage Cover?

The CDW cover may vary across insurance companies but generally includes the following:

1. Damages to the car’s body may result in dents, scruffs and more.
2. Theft of the rented car.
3. Any costs associated with towing the car to a garage.

*Standard T&C Apply

What is Excluded from the CDW Cover?

1. Excluded Damages: CDW does not cover damages to wheels, gearbox, and windscreen.
2. Traffic Rule Penalties: Penalties due to non-compliance with traffic rules are not included.
3. Third-Party Exclusions: Damages to third-party property and injuries are specifically excluded.
4. Policy Document Check: Always review the policy document for additional exclusions.
5. Difference from Comprehensive Policy: CDW differs from a comprehensive policy in coverage and applicability.
6. Car Insurance Calculator: Use a car insurance calculator to compare and choose the right policy.
7. Limited Availability: CDW is a nascent concept, and not all insurers offer it. Ensure you make an informed decision before purchasing.

*Standard T&C Apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read the sales brochure/policy wording carefully before concluding a sale.