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What is hire car excess waiver insurance?

Carlton Boyce / 04 January 2016

All you need to know about car hire excess waiver insurance or collision damage waivers (CDW) and how to get a good deal.

Couple driving on holiday
In the same way as you have an excess on your domestic home or car insurance policy, car hire insurance policies have an excess too

Car hire excess insurance, or Collision Damage Waiver (CDW) as it’s commonly known, is possibly the most profitable element of any car hire booking. This gives you an idea of how expensive CDW is when it is bought as part of a car hire package compared to buying it as a standalone policy from a third-party.

Read our guide to hiring a car.

What is CDW?

In the same way as you have an excess on your domestic home or car insurance policy, car hire insurance policies have an excess too. This means that if you have an accident or damage the car, an insurance policy will pick up the final bill for repairs bar the initial £500 or £1,000.

This first payment, which is borne by you, is known as the excess – and for hire cars it is often, err, excessive.

Seven car hire rip-offs to avoid.

How much are we talking about?

Buying a CDW policy from the car hire company could cost you £25 a day or more depending on the car, location, and level of cover you need. However, buying a policy from a third-party company that gives you exactly the same level of cover could cost as little as 10%, or just a couple of pounds a day.

If you travel a lot you can buy a policy that gives you annual cover throughout Europe for about £50. Worldwide cover costs about £75 for the same 12 month period.

Is there an upper age limit on hiring a car?

What’s the catch?

There is a catch, but it’s a tiny one. If you don’t tick the CDW box on the car rental agreement form (and you shouldn’t!), then you will be asked to leave a deposit on your credit card.

This is perfectly OK and you shouldn’t worry about doing it: the hire company takes it to protect itself in case there is a problem or you have an accident.

Find out more about Saga's Car Hire Excess Waiver Insurance.

Avoid high pressure tactics

Remember I told you how profitable selling CDW policies is? That very same profitability can lead to the sort of high-pressure sales tactics that are more usually associated with double-glazing salesmen. 

The trick is to ignore scare stories where you are told that you’ll have to pay £500 if you scratch the car.

What are the benefits of pre-booking your hire car?

What happens if I have an accident?

If you do have a bump or scrape, then you’ll need to pay the car hire company’s excess, which is why you left a deposit on your credit card. Keep any and all paperwork and then submit a claim via your third-party CDW policy.

A cheque for the excess you’ve already paid should land on your doormat within a few weeks.

Seven secrets car rental companies would prefer you not to know.

That sounds like a lot of hassle.

It isn’t, as with most things in life CDW cover is a balance between cost and convenience, so if you’d rather pay extra to a hire company to let them deal with it then that’s perfectly understandable.

Read our tips for driving abroad.

I’m sold! What next?

Just Google “CDW policy”. Then invest 10 minutes or so online and you’ll be covered, saving you enough to splash out on a very nice meal while you’re away!

Have you ever bought CDW cover from a third-party insurer? If so, how did it go? We’d love to hear your stories!

Get your quote for Saga Travel Insurance today – and don’t forget to add your Hire Car Excess Waiver Insurance too.


The opinions expressed are those of the author and are not held by Saga unless specifically stated. The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.