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Simple English definitions for legal terms
collision damage waiver
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A quick definition of collision damage waiver:
Collision damage waiver: When you rent a car, you can buy something called a collision damage waiver (CDW) which means you won't have to pay for any damage to the car if you get into an accident or if it gets stolen or vandalized. You might still have to pay a little bit of money, called a deductible, but the CDW will cover most of the cost. Sometimes the car rental company has its own insurance, but the CDW is an extra protection for you. It can also cover the money the rental company would have made if the car couldn't be rented while it was being fixed. But if you do something really bad, like drive drunk, you might have to pay the rental company for the time the car can't be rented.
A more thorough explanation:
Collision damage waiver (CDW) is a type of car rental insurance that protects the renter from being liable for damages to the rental vehicle in case of an accident, theft, or vandalism. The CDW coverage usually includes a deductible that the renter has to pay in case of an accident. The car rental company may have its own insurance, but CDW limits the renter's liability.
- John rented a car for a weekend trip. He purchased CDW coverage, which means that if he gets into an accident, he will only have to pay a deductible of $500 instead of the full cost of the damages.
- Sarah rented a car for a week-long vacation. She declined the CDW coverage and got into an accident. Now she has to pay the full cost of the damages, which is $5,000.
The examples illustrate how CDW works. John purchased CDW coverage, which means he is protected from being liable for the full cost of the damages in case of an accident. Sarah declined the CDW coverage, which means she is responsible for paying the full cost of the damages.