What is Car Rental Insurance?
Many times we hear reports about rental car insurance with the terms CDW, FDW, SCDW and various similar terms, which many times we do not know and do not understand. Most car rental companies use these names for their insurance, although you may find different titles for the same insurance.
You will definitely have heard the following phrases from the representative of a car rental company upon receipt of your vehicle:
(1.1) Do you want full exemption insurance? (CDW)
(1.2) Do you want full insurance with a reduced exemption? (SCDW)
(1.3) Do you want full insurance without exemption? (FDW)
So let’s see what exactly these insurances are.
1.1 Full Exemption Insurance (CDW)
Complete or basic security package with exemption. This means that when we rent a car, we will have to pay the daily rent of the car (let’s say 10 euros and we will explain later) and they will ask us for a security deposit (eg 500 euros) for this car. With CDW, the rental company has the car insured with mixed insurance with some exemption (eg 500 euros, which is the amount that will be requested from the customer as a guarantee). This means that for any damage to the car, the first 500 euros will be asked to be paid by the company and the remaining amount will be paid by the vehicle’s insurance.
Let’s look at an example:
Suppose we rent a car for 10 euros a day for 5 days. We will pay 10×5 = 50 euros and a 500 euro guarantee. In total, we will need 550 euros. When we return the car and if no damage has been caused, the rental company will refund us 500 euros. In case a mirror breaks, they will keep the value of the mirror. If the mirror has 50 euros, they will return the 450 to us.
1.2 Full insurance with reduced exemption (SCDW)
SCDW security differs from CDW in that it has a reduced exemption. In the example of the previous insurance we had a 500 euro security deposit and a 10 euro daily car price. If we choose SCDW, the agency will ask us to pay the amount of the guarantee which may be even less than half (eg 200 euros), but the rent of the car from 10 euros can be increased to 13 euros. With this insurance, however, the maximum amount we can pay in case of damage to the car will be 200 euros.
So 13×5 = 65 euros with a guarantee of 200 euros. As you understand you pay a total of 15 euros more for car rental, but with a fairly reduced liability.
1.3 Full insurance without exemption (FDW)
FDW is an insurance with 0 euro exemption as the title says but… The car rental agency will not ask for an exemption guarantee upon delivery of the car as we have agreed to take the package with FDW insurance. However, we may be asked for a small guarantee regarding the fuel of the car. This amount is usually 80 to 100 euros depending on the car and this happens as we will receive a car with a full tank and we will have to return it full. Of course, in many cases this can be paid in cash on delivery of the car.
With FDW there will be no extra charge for any damages. Somewhere here of course comes the second but… The cost of the car from 10 euros per day can reach close to 18 euros. That is, for 5 days, the total cost of the reservation will amount to 90 euros instead of 50, but with zero guarantee of exemption. This option has its pros and cons. You have no worries about anything happening in the car, but you pay almost double the money.
Usually car rental agencies offer these insurances for a minimum limit on the rental days. The minimum days can be 5 or 10 depending on the policy of each company. We recommend that you read the terms and conditions before each rental.
At Tc Rentals we offer our customers full car insurance.
And after you get here and read our article on car insurance, we give you a discount coupon for your next rental from TCRentals.
Coupon code: tcspecials10
Book now at TCRentals and start your journey!