How to reduce excessive collision damage waiver (CDW) charges

Hiring a car can be prime territory for confusing information if it is something you do not do often. You arrive at a new destination on holiday or business, plan to rent a car and explore a little, or simply get from A to B, but you are hit with a bunch of options at the car rental desk you are not ready for. This is prime time for upsell opportunities, one of them being collision damage waiver (CDW) charges.

CDW charges refer to the extra charges you need to pay if your car ends up in a collision with sustained damages. The collision damage can be up to three levels, and hence determine the CDW charges. Normally the CDW charges aim to bring down the insurance excess. The more CDW charge you pay the insurance excess becomes less, and vice-versa. Tempted with less promise of excess, one tends to pay more for the CDW. Hence, this becomes a good area for complete price gouging, as the CDW charges end up being more than the car rental charge.
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Some of the gouging start with the online reservation which states that the rate is fully inclusive of all charges. However, at the rental desk when you are about to get your car, you are asked to pay additional CDW insurance. This comes out of the blue to you but you decide to go ahead as you don’t want to pay excess for any damage to the car. You can end up paying more or less $15-25 per day to lower your risk.

Here comes the interesting catch. Some of the CDWs don’t cover damage to rear and front lights, bumpers and tyres. These are the very parts that have the highest probability to get damaged, even in a small collision. To eliminate this problem, you might be asked to pay an additional charge of around $10 per day on top of the normal CDW charge of $15-25 per day. Your total charge now comes up to around $35 per day on top of your rental charge. So finally, you end up paying your car rental charge, the CDW charge and the additional charge. What happens? You are price gouged !

You can generally save yourself from this trouble by having some prior knowledge. Generally, the travel insurance companies have policies that cover entire extra charges. They come as little as $7-10 per day (instead of $25) or less, and some of them even include travel insurance and medical needs too! These insurance policies generally provide an annual or daily cover. The most important benefit is that they cover damage to undercarriage, roof, tyres and windscreens. These places are most prone to damage in the event of a collision and are generally excluded by some rental companies in CDW charges.

Insurance policies also let you chose the region where you are travelling. In case when you are driving in your home country, these policies do not have the “distance from home” restrictions where the charge depends on the distance of your driving area from your home. These policies also let you chose individual or family plans for cover for additional drivers. Thus, you can protect yourself from theft and getting stung for CDW by getting a travel insurance policy from your country of origin before you commence your journey.

Simply put, you just need to do a little research on different travel insurance policies, and buy an annual or daily insurance policy for car rental excess for individual or for the family. When you are at the car rental desk, just say no to any insurance or excess waivers that they offer you. Finally, when you drop off your car at the rental desk and they charge you excess money, claim the same from your travel insurance company after coming back to home. Obtaining cheaper and more comprehensive travel insurance than the policies offered by some car hire companies will not only save you a considerable amount of money, but also provide you a complete peace of mind.

Benefits of Travel Insurance:

  • Option of choosing annual or daily insurance
  • Option of choosing the region of travel
  • Excess damage to car or theft is covered
  • Covers damage to undercarriage, roof, tyres and windscreens
  • No restrictions on “distance from home”
  • Flexible for individual or family insurance

Work Plan:

  • Do little research on different travel insurance policies
  • Buy an annual or daily insurance policy
  • Choose the policy for individual or family
  • At rental desk, say no to any insurance or excess waivers offered
  • When you drop off the car and are charged excess money, claim it from the insurance company back home

Avoid the price gouge – simply drive safely around it by taking travel insurance beforehand!