CDW stands for "Collision Damage Waiver." It is a term commonly used in the insurance and rental car industries. CDW refers to a type of insurance coverage that protects the renter or borrower from financial responsibility in case of damage to a rented or borrowed vehicle due to a collision.
When a person rents or borrows a vehicle, CDW is often offered as an optional add-on to the rental agreement. By purchasing CDW, the renter transfers the financial liability of any damage caused by a collision from themselves to the rental company or the insurer.
If CDW coverage is declined, the renter becomes responsible for the full cost of repairing the damage to the vehicle, regardless of fault. On the other hand, if CDW is purchased, the renter is only responsible for paying a predetermined deductible, which is usually much lower than the total repair costs.
While CDW can provide peace of mind and protect the renter from substantial expenses, it may not cover all kinds of damage, such as damage to tires or the undercarriage of the vehicle. Therefore, it is essential to carefully review the terms and conditions of the CDW policy before making a decision.
Overall, CDW is designed to financially safeguard renters or borrowers by minimizing their liability for collision damage, providing them with a degree of financial protection and avoiding potentially costly out-of-pocket expenses.
