The Truth About Collision Damage Waivers (CDW) and Your Excess Insurance
Booking a rental car often feels straightforward—until you reach the desk and are hit with a confusing array of options, waivers, and additional charges. Chief among them is the infamous Collision Damage Waiver (CDW). It sounds reassuring: “Sign here and you’re covered for damage.” But is it really that simple? Not quite.
In this guide, we break down exactly what a CDW is, what it covers (and doesn’t), and why having car hire excess insurance is essential to avoid unexpected costs when things go wrong.
What is a Collision Damage Waiver (CDW)?
A Collision Damage Waiver is an agreement you can take out when you hire a car. It reduces your financial liability for damage to the rental vehicle. But here’s the key point: it’s not actually insurance. Instead, it’s a waiver of some of the rental company’s right to charge you for repairs.
In most cases, even if you purchase CDW, you’ll still face a hefty excess amount—the part of the damage cost that remains your responsibility. This can range from £500 to over £2,000, depending on the car, rental company, and country.
Does CDW cover everything?
Unfortunately, no. Many travellers are shocked to learn that even with CDW, they are still liable for certain types of damage and costs, including:
- Damage to tyres
- Windscreen chips and cracks
- Damage to the undercarriage
- Lost or damaged keys
- Interior damage
And while the rental desk agent may suggest that CDW “fully protects” you, it’s important to read the small print: most CDWs come with significant exclusions and that ever-present excess to pay before the waiver kicks in.
How high is the CDW excess?
The excess associated with a CDW can vary widely but typically ranges from £500 to £2,500. Even minor damage—like a small scratch or chipped windscreen—could see you charged the full excess amount, regardless of how inexpensive the repair might actually be.
That means if your rental car suffers damage during your trip, you could be handed a sizeable bill even after paying for the CDW.
So why do I need car hire excess insurance if I have CDW?
Here’s where car hire excess insurance comes in. This standalone policy reimburses you for the excess you’d otherwise have to pay if your rental car is damaged or stolen. In other words: CDW may cap your financial exposure, but excess insurance ensures you can claim that money back.
In addition to covering the excess, many car hire excess insurance policies from reputable providers like SimplyExcess also protect you for those items that CDW often excludes—such as tyres, windscreens, undercarriage, and keys. This means you’re much better protected overall.
What happens if I don’t take out excess insurance?
If you rely on CDW alone, you’re gambling that nothing will happen to the car during your hire period. Should you suffer any damage—even from a minor accident or vandalism—you’re on the hook for that excess charge. That’s why excess insurance is a wise, cost-effective solution for peace of mind.
Here’s a common scenario:
You rent a car for a week in Spain. You accept the CDW offered by the rental company but don’t purchase excess insurance. Midway through your trip, a stone chips your windscreen. At return, the rental company charges you €800—well within the excess threshold—so the waiver doesn’t help. Without excess insurance, you have to pay that bill yourself.
Does my credit card cover the excess?
Some premium credit cards offer rental car protection, but this often comes with restrictions. Many only provide secondary coverage (meaning you claim on your own insurance first), may exclude key risks like windscreens or tyres, and can limit coverage by country or car type. It’s risky to rely on your credit card without reading the fine print carefully.
Is excess insurance expensive?
Not at all. Standalone car hire excess insurance from SimplyExcess is surprisingly affordable, typically costing a fraction of what rental companies charge for excess waivers at the desk. In fact, rental companies may ask £15–£30 per day for their waiver product, compared to as little as £2–£5 per day for a quality standalone policy—or even less when you buy an annual policy for frequent travellers.
Key takeaways
- CDW is not insurance—it waives some of your liability but still leaves you responsible for the excess.
- Even with CDW, you’re still exposed to large rental car excess charges for minor damage.
- CDW often excludes common damage types like windscreens, tyres, and keys.
- Standalone car hire excess insurance from SimplyExcess covers your excess and many exclusions at a much lower cost.
In short: don’t assume that CDW alone fully protects you. It’s an important step, but it doesn’t cover all your potential costs. Car hire excess insurance is the affordable, reliable way to fill those gaps and protect your wallet from surprise bills.
Ready to drive with confidence? CDW won’t cover it all — protect your excess today! Get SimplyExcess before you collect your keys and enjoy the journey knowing you’re properly protected.