When renting a car, a collision damage waiver (CDW) is offered to limit your financial liability for damage or theft. It’s important to know what coverage you already have from your personal auto policy or credit card before deciding on a CDW.

A CDW covers damage, theft, or total loss of a rental car, shifting financial responsibility from you to the rental agency’s insurer. Without CDW, you may be liable for any damage not present at the time of rental.

If you back into a pole with CDW, you won’t personally pay for repairs. CDW typically doesn’t require a deductible.

CDW doesn’t cover risky behaviors, leaving keys in the car, allowing unauthorized drivers, criminal acts, towing, off-road driving, intentional misconduct, or liability expenses.

Credit cards like Visa or MasterCard may offer primary or secondary rental car coverage, potentially eliminating the need for a CDW from the rental agency.

Credit card coverage varies, but may include repair or replacement costs for a stolen or damaged rental car, as well as loss of use charges and towing services.

Primary credit card coverage takes precedence over other insurance, while secondary coverage kicks in after other options are exhausted.

Coverage limitations for credit card rental car insurance may exclude certain damages, losses, rental periods, and vehicle types.

Personal auto insurance with rental car coverage may eliminate the need for a CDW or credit card coverage.

Full coverage auto insurance policies generally cover rental vehicles, including collision and comprehensive coverage.

Non-owner auto insurance policies provide liability coverage for drivers who don’t own a vehicle, but don’t cover damage to rental cars.

In the event of an accident in a rental car, you’ll need to report it, file claims, and determine liability based on your coverage.

If you have CDW, report the accident to the rental company and file a claim. If you harm others, liability insurance covers their claims.

Activate your auto insurance policy for rental car coverage in case of an accident, ensuring you have comprehensive and collision coverage.

Credit card coverage can be used for rental car damage, but liability coverage from your auto policy may be necessary for other parties involved.

Having various coverage options, including personal auto insurance, CDW, or credit card rental benefits, can financially protect you in case of a rental car accident.

Read more at Yahoo Finance: What is a collision damage waiver for a rental car?