What is Collision Damage Waiver?

While leasing a car from any car rental service, you can get an added insurance called the Collision Damage Waiver. It provides coverage for dents, scuffs, theft, fire and towing to a leased vehicle. It is an insurance that rental customers purchase to protect themselves financially in event of any accident. So, as you rent a vehicle and acquire a Collision Damage Waiver insurance then you will not be responsible for the cost of the damage to leased car’s repair in case of an accident. Simply put, Collision Damage Waiver offers a waiver in case of damages to a rented vehicle in case of a collision.

Typically, a Collision Damage Waiver insurance is sold by the vehicle rental company itself as they may have a tie-up with an insurance company for the same. Since the exact cost of Collision Damage Waiver insurance is not stated by the Insurance Regulatory and Development Authority of India – IRDAI, it can vary from one insurance provider to the other.

Many credit card companies offer Collision Damage Waiver insurance for cardholders that use their credit card for the full rental cost of a vehicle. Some premium credit cards offer Collision Damage Waiver coverage to avoid filing of a claim against an insured’s personal policy in case of an accident. The other way generally Collision Damage Waiver insurance is bought is in addition to or supplemental to any other insurance that the insurance buyer may already have, such as a regular automobile insurance.

Importance of Car Insurance with Collision Damage Waiver

While leasing a vehicle or opting for a rental car that fits your budget, it is essential to get protected as well as get a financial backing with insurance. Coverage for expenses of fixing any damages caused by the vehicle collision is the main significance of Collision Damage Waiver. If you do not purchase this insurance, in case of any collision or accident, any damages to the rented vehicle shall be borne by you. Insurance on rented vehicles is significant as it is the law that card driven on roads in India must be insured as per the Motor Vehicle’s Act, 1988 and it also applies to the Third-party Liability policy, which is principally about compensating third parties for damage, injury or death due to accident.

Difference between Damage Waiver and Car Insurance

Collision damage waiver is insurance plan that solely covers for repairs only for rental cars. A car insurance on the other hand provides coverage for a purchased car. Also, it provides more protection than just for the vehicle repairs like against vehicle damage due to natural calamities, theft, vandalism, personal accident cover, or even third-party legal liability.Collision damage waiver insurance is purchased on rented vehicles only while a car insurance plan can be purchased for private as well as commercial vehicles. Though highly essential, a Collision Damage Waiver on a rented vehicle is not mandatory to be purchased however as per the law, Third-party Liability part of the cover for a vehicle to be driven in India is mandatory.

Inclusions of Collision Damage Waiver

Let’s look at the Inclusions of Collision Damage Waiver to understand what gets covered in such insurance.

  • Damages to the rented car such as dents, scruffs and so on
  • Burglary of the rented vehicle
  • Cost of towing the rented vehicle

Exclusions of Collision Damage Waiver

Now let’s throw some light on the Exclusions of Collision Damage Waiver insurance;

  • Damages to the rented vehicles big parts like gearbox, wheels, or windscreen
  • Damages to rented vehicle in case of not abiding by the traffic rules
  • Damages to the rented vehicle in case of drink driving or speeding
  • Damages to the third-party vehicle and their property in case of an accident of the rented vehicle

Detailed repair parts coverage under Collision Damage Waiver

Parts of vehicle



Vehicle bodywork



Windows and Mirrors



Wheels and Tyres









Car interior



Flat battery



Personal belongings



Lost keys



GPS, Child seats



Towing charges



Theft of vehicle




Benefits of Collision Damage Waiver insurance

If you wish to opt for Collision Damage Waiver insurance for your rented vehicle you can look for the benefits to get in-depth insight of its coverage;

  • It helps save money spent on damages to rented car due to accident
  • It provides a stress-free financial situation
  • It gives peace of mind even in case of theft of insured rented vehicle

Collision damage waiver is an added advantage you can avail on your rented vehicle and enjoy its benefits upon your rented vehicle. Make sure to read all the terms and norms of the policy before purchasing and there is always an option to compare insurance plans online before choosing which suits your requirement the best.

Extra tip – While opting for rented vehicle it is wise to always take pictures when your pick up a rented vehicle from the agency to check for any previous damage. This allows you to capture it and use it as proof that the vehicle you are driving is in fine condition.

FAQs – Frequently asked questions.

Let's take a look at some frequent queries on Collision Damage Waiver insurance;

Q1. Can the Collision Damage Waiver be purchased for a private vehicle as well?

No, such the Collision Damage Waiver cover can be purchased only for rented or leased vehicles.

Q2. Can private car insurance policy be converted into Collision Damage Waiver for a vehicle that I plan to rent?

No, a car insurance policy and Collision Damage Waiver are two separate plans, and they cannot be converted from one to the other through the insurance provider.

Q3. What happens if a rented vehicle gets stolen? Is there a law suit?

Yes, if a rented vehicle gets stolen, there shall be legal proceedings. However, such situation can be covered through purchasing Collision Damage Waiver insurance for the rented vehicle and compensate the rental agency for loss due to rented vehicle theft.

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