I buy the collision damage waiver when I rent a car because I don’t want my insurance company to know if I’m in an accident. What if I hit another vehicle and it’s my fault? --G.T., Albany, N.Y.
The collision damage waiver (CDW) covers damage to the rental car, but it doesn’t cover liability if you injure someone or damage another car or property. The rental car company may automatically provide a small amount of liability coverage. But if it’s not enough, your own auto insurance will generally cover you up to your policy’s liability limits if you rent a car in the U.S. or Canada (but usually not in other countries), says Bill Wilson, an insurance educator and founder of InsuranceCommentary.com, an industry blog. If you don’t want your insurer to cover an accident that’s your fault, you will have to buy supplemental liability coverage from the rental car company in addition to the CDW. For example, Enterprise charges $10 to $15.50 per day for $1 million in coverage.
Many renters turn down the CDW, which can cost $9 to $25 per day, because their own policy covers damage to the rental car and many credit cards pay the deductible. But buying the CDW eliminates the hassle of filing a claim with your insurer (which could lead to a rate hike). It also covers costs your insurer or credit card company may not pay, such as loss of use and diminished value charges.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
-
What to Expect From Bitcoin and Other Cryptocurrencies in 2025With help from Donald Trump, the cryptocurrency industry is expanding rapidly. Here's what to expect from bitcoin in 2025.
-
What's the Key to a Happy Retirement for a Couple?Retired couples spend lots of time together. Without the distractions of work and raising kids, miscommunication can cause trouble. Here's a way to avoid that.
-
Credit Report Error? They All Mattercredit & debt Don't dismiss a minor error. It could be the sign of something more serious.
-
Insurance for a Learning Driverinsurance Adding a teen driver to your plan will raise premiums, but there are things you can do to help reduce them.
-
529 Plans Aren’t Just for Kids529 Plans You don’t have to be college-age to use the money tax-free, but there are stipulations.
-
When to Transfer Ownership of a Custodial Accountsavings Before your child turns 18, you should check with your broker about the account's age of majority and termination.
-
Borrowers Get More Time to Repay 401(k) Loans
retirement If you leave your job while you have an outstanding 401(k) loan, Uncle Sam now gives you extra time to repay it -- thanks to the new tax law.
-
When It Pays to Buy Travel Insurance
Travel Investing in travel insurance can help recover some costs when your vacation gets ruined by a natural disaster, medical emergency or other catastrophe.
-
What Travel Insurance Covers When Planes Are Grounded
Travel Your travel insurance might help with some costs if your trip was delayed because of the recent grounding of Boeing 737 Max planes.
-
Ways to Spend Your Flexible Spending Account Money by March 15 Deadline
spending Many workers will be hitting the drugstore in the next few days to use up leftover flexible spending account money from 2018 so they don’t lose it.
