CDW (Collision Damage Waiver) is an optional service offered by automobile rental companies that protects you in the event of an accident that damages your vehicle. Outside of the United States, the CDW has a high deductible/excess.
*Rental Car Damage Protection coverage is provided as part of a travel protection plan for US residents. The plan’s rules, limitations, and exclusions apply to insurance coverages.
What does excess reduction mean?
Excess Reduction is a plan designed to supplement the basic coverage offered in your estimate with additional coverage.
If you take out Excess Reduction with a car rental, the excess is zero* if the car is stolen or you get a bump or dent. If you rent a van with Excess Reduction, the cost of any loss or damage is decreased.
We recognize that vehicle and van rental can be perplexing, therefore we strive to make our products and services, as well as all terms and restrictions, as plain as possible. Four frequently asked questions concerning Excess Reduction are listed below.
What is excess reduction insurance in Australia?
- Excess Reduction, often known as Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW), is an insurance coverage that is not regulated. It’s a cost paid directly to the car rental business in exchange for a lower or no excess being charged to your credit card in the event of an accident.
- These products frequently exclude coverage for damage to the vehicle’s bodywork. They may refuse to pay out if anything valuable is damaged, such as:
What does excess insurance mean?
- When you file a claim on your automobile insurance, the excess is the amount you must pay. If you’re found not to be at fault, you’ll get your money back.
- In most cases, you only pay an excess when you are responsible for your own losses.
- To start a claim, you normally have to pay the excess up front, so make sure you can afford it.
- To cover the expense, you can get excess protection insurance (or get £250 free excess cover when you buy car insurance with us).
What is excess reduction waiver?
Excess insurance, also known as excess waiver insurance or car hire excess insurance, is an optional insurance coverage that protects you from any excess charges incurred if your rental car is damaged or stolen.
The ‘extra’ (also known as the ‘deductible’) is the amount you must pay the rental company if your rental car is destroyed or stolen while in your possession.
How much is the excess on a rental car?
If a rented car is damaged or stolen, the amount the renter must pay to repair or replace it is limited. The term ‘excess’ merely refers to the upper limit. The rest of the cost will be covered by the car’s damage or theft insurance.
Do I need to buy additional insurance when renting a car in Australia?
Yes. Third-party insurance is required to register a car in Australia, regardless of where you are, so check sure the rental firm has this coverage in place. Third-party liability insurance protects you if you injure someone else.
In the event of damage to the car, the rental company’s base level of coverage will automatically set your liability to a specified amount, usually around $3,000 or $4,000. This is the amount you’ll have to pay in excess, however it’s also known as a collision damage waiver, loss damage waiver, or damage responsibility cost.
You can lower the excess by purchasing insurance through the rental agency or one of the other options.
Do you need rent a car insurance?
Is it necessary to have insurance when renting a car? To hire a car, you do not need to have your own auto insurance policy. However, rental businesses often provide just basic coverage on their vehicles, so if you get into an accident, you could be held liable for a large sum of money.
How does rental car insurance work in Australia?
All rental businesses provide Standard Liability or Collision Damage Waiver (CDW) with their agreements, so you have a minimal amount of coverage when you hire a car in Australia. However, this means that you, as the driver, are still liable for the excess if something goes wrong with the vehicle.
If your rental agreement specifies an excess of $3,000, for example, you’ll be responsible for any damages to the automobile up to that amount. Any sum in excess of that will be covered by the corporation. However, single vehicle accidents (SVA) and damage to windscreens, headlights, and tyres are often not covered by this basic coverage (WHT). To cover these types of accidents/damages, you’ll need to get additional coverage.
Excess Reduction insurance can help in this situation. If you don’t want to pay the $3,000 excess, you can buy Excess Reduction to cover the difference.
This supplementary coverage is charged on a per-day basis and can cost anywhere from $20 and $65 per day, depending on who you rent from. If you choose the Excess Reduction option, you’ll be given a range of options for reducing the excess based on how much more you’re paying per day.
Let’s pretend you choose the lowest level of Excess Reduction. You will be charged an additional $25 every day, and your excess will be lowered from $3,000 to $500. Of course, this is only an example, and each company’s coverage would differ.
Unfortunately, there is no simple solution to the question of whether or not to purchase supplementary coverage when renting a car. It all comes down to your individual tastes. The best course of action is to research each level of coverage, thoroughly read the terms and circumstances, and discuss your choices with the rental company if you have any concerns. Finally, go with the insurance that you feel most at ease with.
Is it better to have high or low excess?
A bigger excess is often associated with a higher risk, but it could save you money right now. If you’re a sporadic driver who keeps your car safely stored most of the time, the danger is low and the savings could be substantial.