Reasons Not To Buy a CDW from the Rental Agency
Below are 10 reasons we feel it’s not wise to purchase the CDW from the rental company.
- 1. It’s very expensive. usually from $10–$15 a day. Multiplying that by 365 days equals $3,650 to over $5,000 a year! This is at least 5 to 10 times the going rate for that coverage purchased individually!
- 2. Your personal auto insurance policy covers the damage, providing that you have collision and comprehensive coverage on at least one vehicle. Coverage is subject to your paying the collision or comprehensive deductible at the time you return the vehicle, however.
- 3. Your personal umbrella policy probably covers the damage, subject to your paying the SIR (i.e., deductible).
- 4. Your credit card may very well cover the damage to the rental vehicle if you charge the rental to the card.
- 5. The rental company’s CDW usually doesn’t apply if the operator has had a single drink. (See the following case study.)
- 6. The CDW usually doesn’t cover driving outside the state where the vehicle is rented, unless you have express permission to do so.
- 7. The CDW will not cover accidents when a nonlisted driver was driving—sometimes not even spouses.
- 8. The CDW generally will not cover damage caused by “careless driving” without defining that term. (Aren’t nearly all at-fault accidents caused by some sort of careless driving? This is a dangerous exclusion in my view.)
- 9. The CDW sometimes applies excess over your personal auto policy coverage, requiring you to prove that your personal auto policy (PAP) coverage will not apply before this coverage will pay for the damage. (You encounter a similar problem with most credit card coverage.)
- 10. The CDW often excludes damage occurring when driving off paved roads. (How many people who buy the CDW coverage when they sign the rental contract realize that they have no coverage when they drive on gravel or dirt country roads?)