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Car Rental Insurance Tips And The Collision Damage Waiver (CDW)

Whenever you hire a car, you are responsible for a very high deductible, sometimes up to the whole value of the vehicle. Luckily, there is normally several options to reduce your financial risk in the event of an accident.

Basic rental car rates in Europe nearly always contain standard, mandatory liability protection — for accident-related damage to anybody or anything outside the car.

In most cases it is up to you to determine how to protect the risk of damage to or theft of the auto itself. You have three main choices, all mentioned below:

  1. purchasing a "Collision Damage Waiver" (CDW) from the car hire company (easiest but often too expensive)
  2. choosing the coverage from your Gold or Platinum credit card (cheapest but with one huge drawback)
  3. or obtaining collision insurance as part of a car rental booking through a car rental broker (recommended when an additional insurance is included which delete the deductible).

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1. Collision Damage Waiver (CDW) From The Car Rental Company 
The easiest option is to purchase a CDW coverage from the carrental company (it’s the primary extra built into the "inclusive rates" you will see in offered rate). This protection technically is not an insurance, it’s a waiver. The rental company waives its right to collect a high deductible from you in case the auto is damaged. Please note that this "waiver" doesn’t really remove the deductible, however simply lowers it. CDW includes the majority of the vehicle whenever you are in an automobile accident, but normally didn't cover the undercarriage, interior, windshield, windows,roof, tires, and side mirrors.

CDW normally costs $10–30 a day (add appr. 30 percent extra for taxes and fees). Occasionally the CDW cost alone is a little less when put together with Theft/Loss protection as part of an "inclusive hire rate" — often this will be cheaper when you book and pay this upfront than choosing this when picking up the car.

When buying the CDW, the decreased deductibles can still be significant, mostly with hovering at about $1.000–1.500 (or higher, based on the car type). The majority of the car hire companies also provide a second tier of coverage, named "Super CDW" or "Zero-Deductible coverage" to get down the deductible to zero or near zero (when you didn’t book for this upfront, the sales person from the rental station will ask this because they get commissions). This is expensive — normally about an additional $10–30 per day plus taxes and fees — nevertheless, for some renters, it’s worth the peace of mind.

Anytime you are looking at rental options on the Internet, be warned that many rental companies in Europe offer "basic rates" which include CDW/Theft protection. (In such a case, this is not an optional extra, so you cannot drop it.) If these CDW-inclusive prices seem too good to be true, they probably are: The unwaived deductible is probably specifically high (expect $2.000–3.000)...so you have to spend additional money to purchase the "Super CDW" nevertheless to get the deductible down to an affordable level.

When you see these expenses, the alternative options for paying for the rental companies CDW will certainly be worth thinking of wisely: creditcard protection or collision coverage through your car rental broker which is at the end the best solution.

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2. Credit Card Coverage
CDW fees can look very high when you think about that most Gold or Platinum credit cards probably have collision coverage included. If you are paying with the appropriate credit card, you get zero-deductible collision coverage for free (comparable to "super CDW"). This means that, if your auto is stolen or damaged, the credit card will take care of whatever costs you are responsible for. There is one disadvantage: when an accident happened, working with credit-card coverage could be much more of a trouble compared to what you’d experience with the carrental company CDW.

If you would like to use this, first double-check that the credit card does indeed provide this protection. Keep in mind that regulations apply and coverage differs between credit card providers. Acquire a full specification of the insurance coverage offered by your creditcard provider. Request in which countries it will be relevant, which parts of the vehicle (if any) are neglected, the types of automobiles which are qualified, whether it includes Theft/Loss, the maximum refund approved, and the utmost amount of hire days covered (in case your car rental time surpasses that number, your creditcard won’t protect any of the car hire). Ask them to clarify the worst-case situation to you. You should ask for a "Letter of Coverage" which you should have with you when you pick up the car. 

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After you have received the credit card’s coverage, make sure to decline the CDW shown in the rental contract. Should you take any coverage provided by the rental station, you instantly forego your credit card protection. (Quite simply, when you buy the CDW with a Euro 1.000 deductible, for example, the card is not going to cover that deductible.) This may happen also if you prepay and book for a carrental on the Internet which already includes CDW and/or Theft coverage. So don’t sign any rental agreement until you’re certain that by doing so you’re not accidentally taking the rental company’s coverage.

A credit card’s collision protection is applicable although the damage arises whilst the car is being driven by another person, as far as that additional driver, along with the cardholder, are together shown as drivers on the car hire contract. Be sure to use exactly that same card not only to book the car, but in addition also to pay for the rental itself, along with any other relevant expenses you are billed, whether when reserving on the Internet, or while collecting or dropping off the car at the rental station — flipping credit cards can invalidate the coverage.

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If you have a damage or accident, the car rental station in Ghent Belgium will charge your credit card for the value of the damage (up to the deductible amount) or, if the auto is stolen, the value of the deductible related to theft. So you have to request the refund for these expenses from your creditcard company when you will be back. You’ll have to send the police report along with the carrental company’s damage report.

Be strongly warned that by declining their CDW offer, you’re officially liable for the full cost of the car! For this reason, the carrental station may place a hold on your credit card for the FULL VALUE of the car! This really is bad news if your limit on your credit card is low — especially if you are considering on working with that card for additional buys during your vacation. (In this case you should have at least two credit cards — one for the car hire, the other for any other purchase.) In case you don’t have adequate credit on your card to cover the whole value of the car, the rental station may require you to buy their CDW.

3. Full Insurance From The Car Rental Broker
Our very best experience we have since many years now is when we book car rentals with us through a special car rental broker. The benefit in booking the car hire through a broker will be that they have included an additional insurance in the rental rate to cover this deductible.

So when something happens then the driver has to pay the damage up to the deductible which the carrental company shows in their rental agreement. This is normally the deposit which the rental station hold on your credit card, so maybe $500-2.000. Then you send the invoice for this claim to us or to the car rental broker which will refund this invoice amount quickly. Please note that this includes also damage to windscreens, tires or the underside of the car!