Should You Buy Extra Rental Car Insurance CDW?

  • June 5, 2024
  • 6 min read

The Importance of Collision Damage Waiver (CDW)
So you’re renting a car. You’re on vacation, on a business trip, and your car might cost, you know, $30, $40, $50 a day, whatever it is, even $70 a day. And when you’re at the rental counter or when you’re placing your reservation online, it says you can get extra insurance for $20 or $25 a day. I don’t want the insurance, that’s almost as much as the car. Well, let’s take a look at that for a minute. The insurance we’re talking about is what’s called collision damage waiver or CDW. There’s other types of insurances too which are, you know, um, injury insurance or um, extra kind of medical insurance that’s not what we’re talking about, we’re talking about collision damage waiver.

Why Collision Damage Waiver is Essential
What that means is if you crash the car or the car is damaged, you’re not liable. It’s a waiver, they’re waving their rights to collect from you damages. And you might say, well, I already have car insurance and it covers rental. Well, it probably does, however, there’s a lot of exceptions to that and we’re going to talk about why it might be a good idea for most renters to get collision damage waiver. Number one, one of the biggest costs if a vehicle is damaged while you’re driving it, even if you get a crack windshield, you’re driving a rock hits the windshield and um, they have to replace the windshield, your car insurance might not cover that or might have a deductible, so you have to pay it. So if you have a deductible on your regular car insurance, that deductible applies to your rental.

Additional Costs to Consider
The second thing is the rental car company is going to charge you for what’s called loss of use, meaning that while that car is off the road getting the renal fix or the the fender fixed, whatever they would have rented it for for those days, they are going to charge you for. So if that car rents for $40 a day, it’s off the road for 10 days, that’s $400 they’re going to charge you on top of the cost of the repair. Now your insurance might not cover that. Some insurance companies that cover rental cars don’t cover loss of use, loss of rental income. Sometimes the vehicle will have also a diminished value if you crash def fender or if you have some kind of um, physical damage, collision damage.

The Risks of Driving an Unfamiliar Car
Now that vehicle has a Carfax history so when the Renta car company sells it, they’ll have to sell it for less money because people are going to look up to Carfax and see that it has collision damage and maybe the value is lower, some insurance companies don’t cover that, which means the Renta car company is going to charge you for that. So what’s the last reason? The last reason is you’re driving an unknown car to you. It’s not your everyday car. The buttons are in different places, the cruise control is in a different place, the radio buttons are in a different place, you’re still getting used to it for 4 days, 5 days, and you’re probably driving in a place other than where you normally drive, it’s not your home market where you know all the streets, the exits, the on-ramps, and you’re probably focused on something else, your vacation, your business trip.

Consider the Additional Cost for Peace of Mind
So you have three distractions, different car, different roads, different environment of life, you’re more likely to have things happen that could, you know, uh, cause you to have an impact or damage the car. So how much are we talking about? Well, even if that collision damage waiver is $25 and you’re renting it for four days, that cost you an extra $100. $100 and sure, nobody wants to throw away $100 but think of the liability risk that you’re offputting for $100 by purchasing that. Look, I’m in the insurance business, I sell insurance all day long, I know what insurance is like, every time I get a Renta car, I always buy the collision damage waiver every time, uh, fortunately it’s never, you know, had to be an issue that comes back to me, uh, but on the other hand, think about this, what if there’s some damage on the vehicle that was already there that you missed, maybe there was a scraped wheel that you didn’t see when you did your walk around, maybe there was a couple door dings, maybe there was some hail damage on the roof that you didn’t notice, maybe there was a small chip in the windi Shield that you didn’t notice, now you don’t have to worry about going back and say that was already there, this didn’t happen while I had it, you just go back, you drop off the keys, it doesn’t matter what the damage is, you’re off the hook, you don’t have to worry about it, right?

Peace of Mind Over the Long Term
Again, I’m not trying to say you should throw away $100 but think of how many times you rent a car, even if you rent a car two, three, four times a year, it’s worth a few hundred to take that liability, that risk, that peace of mind off your back so you don’t have to worry about it. Just one person’s opinion. Think about it when you’re renting a car, most of the time it’ll never come back to haunt you but even if you rent a car two or three times a year every year for five years and you have one damage that cost $3,000 out of your pocket because of the deductible, the loss of use, diminished value, it pays for itself. So do the math, think about the liability, don’t compare the collision damage waiver with the cost of the rental, that’s not a fair compar Aron, you’re comparing it to what your, your, your um, your liability is. Let me know in the comments what you think and if that’s a valid opinion or not.

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