Collision damage waiver (CDW), also called car rental insurance, removes a car renter’s liability for all or some damage to a rental vehicle in an accident, similarly to collision insurance. CDW also may cover instances of theft or vandalism. The renter will normally only have to pay for a deductible in an accident. Often the car rental company has insurance of its own, but CDW generally is referring to agreements and coverages limiting anything the renter has to pay. Also, CDW can cover the missed rental income from a vehicle when damages are being repaired. If the renter has no rental insurance or commits an unprotected act like driving under the influence, a renter may have to pay the car rental company for the time the car cannot be rented.
[Last updated in June of 2021 by the Wex Definitions Team]