The pros and cons of rental car insurance

When it comes to renting out a car for your trip away, you’ll more than likely be offered the option to add extra cover to your rental policy. This is to help protect and cover you, if ever the worst or any minor inconvenience were to happen whilst driving along in your rental.

With this in mind, we’ve collated a few pros and cons attached to one of the policies offered to renters when renting a car from a rental company. It’s our hope, that this information helps you decide whether this is the best coverage for you when renting a car out for a road trip or to help you get from A to B whilst away.

Scroll to learn more about the car rental collision damage waiver offered, and its pros and cons.

Car rental collision damage waiver (CDW)

Also referred to as a loss damage waiver (LDW), a collision damage waiver is a coverage that’s designed to insure a rented vehicle and its driver, so they’re covered in the event of a car accident or if the rented car is stolen.

The coverage will cover the cost of repairs or replacement without the driver being responsible for the costs, even if the accident was your fault.

Did you know, if you were driving on a forest road, and a deer ran out in front of you, leaving you no time to stop, resulting in you serving and hitting another driver on the road – this will also be covered under this insurance type.

Of course, we hope this doesn’t happen to you, or the deer, but if it does, it’s good to know what to do: Take photos of any damage caused to the rental car. Call for emergency services if required. Call the rental car company if the rental car is no longer drivable. If the deer is injured, call the authorities to dispatch someone who can help assist the deer.

Pros and cons of car rental collision damage waivers


  • No need to worry about it affecting your own insurance policy.
  • No need to pay a deductible.
  • The car company, in most cases, provide a replacement car if the original rental car is damaged in an accident.
  • You’re covered for any damage to the rental vehicle without having to make a claim with a credit card or insurance company.


  • Some rental companies are known to charge overboard for their coverage option – some charging $30/$40 per day!
  • A collision damage waiver only covers the rental car itself, not the other property that may have been damaged in the incident. So, you could still be liable to pay this expense.
  • Some car insurance providers already offer this as part of your own personal policy, so it’s always worth checking before a trip.

We can’t tell you whether taking out a car rental collision damage waiver is right for you and your vacation, or not – this is up to you to decide.

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