A collision damage waiver, or CDW, is the part of a rental contract that limits what you pay if the rental car is damaged, but it does not remove the excess. The European Consumer Centre France describes the waiver as cover against physical damage to the vehicle with an excess paid by the customer, and puts the excess at between 600 and 1,500 euros once supplementary cover is added.[1] This guide explains the labels on the offer, the usual exclusions and what happens at the desk and at return.
What is a collision damage waiver?
A collision damage waiver is an optional layer of the rental contract that deals with damage to the rental car itself. It sits on top of the one thing the contract must always contain. The Irish consumer authority states that car rental agreements must include third-party cover, and that this cover does not pay for damage to the rental car.[2] Damage to the hire car is therefore a separate question, answered by the waiver or by some other cover.
The waiver is not a promise that you pay nothing. Under a basic waiver the company keeps a right to a fixed sum, the excess, and the waiver deals with the rest of the damage within its limits. Whether you have it, and how large the excess is, is printed in the rental terms of your offer, not in the headline price.
Two points are worth keeping apart. First, the word insurance on a rental offer can mean several products with different excesses. Second, an offer can include a waiver in the price and still show an excess in the small print. For the wider picture of what the price covers, see our guide to rental car insurance. If a personal policy or a card might apply, see whether your own car insurance covers a rental.
CDW vs LDW: what is the difference?
On the consumer side the two names are used for the same kind of cover. The European Consumer Centre France lists LDW, CDW and super CDW together as insurance against physical damage to the vehicle with an excess paid by the customer. Theft is listed separately, under the abbreviations TP, TW and TPC, as theft insurance with an excess.
So the practical difference is in the contract, not in the letters. LDW is commonly read as loss damage waiver, and what it includes is set in the rental terms. Do not assume that a waiver with CDW in its name includes theft. Look for a line that names theft or loss, and look at whether the excess for theft is the same as the excess for damage.
Here is a short way to read an offer:
- Find the name of the product, whether CDW, LDW or super CDW.
- Find whether theft is named in the same product or in another.
- Find the excess figure for damage and the one for theft.
- Find the list of exclusions, usually in the rental terms or a linked document.
If any of the four is missing from the offer, ask the company to send it in writing before you pay.
What is the excess and how big can it be?
The excess is the amount you pay yourself when the car is damaged or stolen, and the waiver covers the rest. The Irish consumer authority puts it plainly: rental car insurance often has a high excess, and you can buy extra cover to protect yourself from it. It gives no fixed figure.
The European Consumer Centre France gives the only range worth quoting. With supplementary insurance the excess is between 600 and 1,500 euros, and some products eliminate it or reduce it to 0 euros. It also notes that higher vehicle categories usually carry higher deposits, so the card hold can be larger for bigger cars.
Where do you find the number for your own booking? It is in the rental terms of the offer, in the section on damage and theft, and again on the rental agreement you sign at the desk. Compare the two before you sign. If the figure on the agreement differs from the figure you saw online, ask which one applies and have the answer written on the document. When you compare offers, compare the excess together with the exclusions, because a low excess with long exclusions can leave you paying for more kinds of damage.
What does CDW usually exclude?
A waiver usually does not pay for the parts of a car that suffer damage in ordinary use, and it can fall away after certain incidents. The European Consumer Centre France lists the typical exclusions: damage to tyres, glass breakage, underbody and roof damage, lost keys and damage to locks, and wrong fuel. It tells drivers to read these exclusions in the terms and conditions.
It adds two conditions on the incident itself. The European Consumer Centre France lists the obligation to notify the police after an accident among the conditions of cover. Cover can also be void after an accident involving alcohol or drugs, or after breaking local road rules. A second driver matters too: the same page warns that without insurance for the second driver, the insurer may refuse to cover damage that driver causes. Our guide to adding a second driver explains how that works at the desk.
Exclusions differ by company, so treat this list as a pattern and not as a promise. The terms of your offer decide. If you are collecting the car in Portugal, see our guide to renting a car in Portugal, and the same applies for Italy.
Excess reduction at the desk or separate excess insurance?
There are two ways to deal with the excess, and they work differently. The desk product lowers the excess inside the rental contract. A separate excess policy is bought from another insurer, and it reimburses you after you have paid. The Irish consumer authority says that you may find cheaper extra cover from another insurer, but the rental company will still deduct the excess from your credit card if you have to claim, and you then claim it back from your insurer.
| Point | Desk excess reduction | Separate excess policy |
|---|---|---|
| Who is paid first | Depends on the rental terms | Rental company, then you claim |
| Who pays you back | Depends on the rental terms | Your insurer |
| Excess in the rental terms | Lowered or zero | Stays as written |
| Card hold | Set by rental terms | Set by rental terms |
The table shows structure, not prices. Neither route is recommended here; the right choice depends on your own policy, your card and the offer. The rental terms stay the same in both cases, so the card hold depends on them. Before you buy any excess policy, read what it excludes, because the excess product has its own exclusions that can differ from the waiver.
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What happens if you damage a rental car?
If you return the car damaged, the company should explain any charges, which may include repair costs and lost rent while the car is off the road. You should both agree and sign the damage on every copy of the damage report, and the company should close off your bill in your presence. If it does not, it must send you a detailed report on the amount charged.
The European Consumer Centre France adds the rules on charges made later. The company may debit your card for damage or theft only if you explicitly agreed to it after the incident. It needs the rental agreement, a repair estimate or invoice from an approved or independent repairer, and your acceptance. You can get your own repair estimate before you return the car, so that an unusually high charge can be challenged.
If you disagree, contact the customer service of the rental company first. If that fails, send a letter with delivery tracking, set out the events and your demands, and attach the contract and photos. The same page says that residents of France can then turn to the European Consumer Centre France, whose services are free.
If you are collecting the car in Spain, see our guide to renting a car in Spain.
What should you do at pickup and return?
The best protection against a disputed damage charge is a record made at both ends of the rental. The European Consumer Centre France says to carry out an inventory again before returning the car, ideally with a company employee present. If the office is closed you stay responsible until the keys are handed over, so photograph the car if you use a key box.
At pickup:
- Walk around the car with an agent and have every existing mark written on the condition report.
- Photograph or film the wheels, glass, underbody, roof, interior and the fuel gauge.
- Read the excess and the exclusions on the agreement before signing.
At return:
- Repeat the walk-around, with an employee if you can.
- Sign the return document and keep a copy.
- Keep your photos and receipts until the deposit is released.
Tyres, glass, the underbody and the roof are on the usual exclusion list, so give them the closest look at pickup and again at return.
A second layer of cover may overlap with what the offer already includes or with a product you bought elsewhere. Compare the excess figure and the exclusions of each product before you accept another one. The terms you agreed to before the trip are your reference.
EU consumer authorities have also pressed rental companies on this point. According to the European Commission, five large companies committed to clarity on insurance and waiver policies and to more fairness when handling alleged damage to vehicles.[3]
