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Sep 26, 2022

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.

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.
  • Since it is mandatory to buy insurance for all vehicles registered in the country, they must be insured.
  • Be it commercial vehicles or private vehicles, insurance requirements under the Motor Vehicle Act of 1988 are compulsory.
  • 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 -
  • If you purchase a CDW cover and end up damaging the rented vehicle, you will not be required to pay for the repair costs.
  • 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:
  • Damages to the car’s body may result in dents, scruffs and more.
  • Theft of the rented car.
  • Any costs associated with towing the car to a garage.
*Standard T&C Apply

What is Excluded from the CDW Cover?

The CDW cover excludes the damages to the wheels, gearbox and windscreen. Further, penalties due to non-compliance with traffic rules are excluded from the insurance cover. Lastly, any third-party property damages and injuries are excluded specifically. While a policy may include other exclusions, they must be checked within the policy document. The CDW cover is different from a comprehensive policy, right from its applicability to its coverage. However, you can make use of a car insurance calculator to help you decide which policy to choose and accordingly purchase a suitable insurance policy. Also, note that this concept of CDW is still in its nascent stage and not all insurance companies might offer one. So make sure to make an informed choice when buying one.   *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.

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