The California collision deductible waiver (CDW) is coverage which waives your collision deductible if you're hit by a negligent uninsured motorist.

The CDW option with a personal auto insurance policy in California doesn't charge the collision deductible when an uninsured or hit-and-run motorist, who is at fault, damages your vehicle. Coverage typically applies only when:

  • There is actual physical contact
  • You can identify the uninsured driver or vehicle

California car insurance law requires that non-commercial vehicle policies that provide bodily injury liability coverage for uninsured motorists must offer coverage for damage to the insured motor vehicle. The coverage must be up to the extent that you're legally entitled to recover from the owner or operator of the uninsured motor vehicle and caused by an uninsured motor vehicle that either:

  1. Pays the collision deductible on the insured motor vehicle when you have collision coverage. (Waiver of Collision Deductible)
  2. Pays for the damage to the insured motor vehicle when you don't have collision coverage. (Uninsured Motorists Coverage - Property Damage)

Payment shall not include damage to personal property or loss of use of a motor vehicle and shall not exceed the smaller of any of the following:

  • The amount of the collision deductible.
  • The actual cash value of the insured motor vehicle.
  • $3,500.

California drivers can either reject the coverage completely or reject coverage for a situation when an insured motor vehicle is operated by a natural person or persons designated by name.

California insurers offer uninsured motorist property damage (UMPD). However, if you decide not to choose this coverage, you can be offered the collision damage waiver. Thus, if you don't carry collision coverage on your auto, UMPD will pay up to $3,500 (not to exceed the value of the vehicle) for damages stemming from a person who's at fault in the accident and is uninsured.

If you carry collision insurance coverage on your vehicle, you can purchase a collision deductible waiver in California. If you're involved in an accident with an uninsured vehicle with CDW as part of your policy, your insurer will pay your collision coverage deductible for you.

UMPD coverage normally pays for damages sustained by your covered vehicle when involved in an accident with an uninsured motorist. Usually, the following conditions must be met before uninsured motorist property damage coverage applies:

  1. The other party must be uninsured.
  2. The driver of the other vehicle must be legally responsible for your damages.
  3. Actual, direct physical contact must occur between your vehicle and the uninsured vehicle.
  4. You must be able to provide the insurance company positive identification of the uninsured party (pocket license number, license plate number of the other vehicle). If this involves a hit and run and you're not able to get the uninsured party's information, coverage won't apply.
  5. You must report the loss to the insurance company within 10 days of the accident.

The insurance company's liability to you will be limited to the following:

  • For vehicles with collision coverage, the most the insurance company will pay under this coverage (CDW) is your collision deductible.
  • For vehicles without collision coverage, the most the insurance company will pay under this coverage (UMPD) is $3,500 or the actual cash value of the vehicle (whichever is less).

There are also cases when the CDW doesn't apply. Here are a few of those instances:

  • You're at fault
  • You're partly at fault
  • The insurer finds no one is at fault
  • The accident is a hit-and-run and you can't identify the driver or vehicle

The collision deductible waiver can help you in specific cases, but it's not something that happens that often. CDW protection doesn't cost much. You have to decide whether it's worth it. One way to add CDW protection without it hitting your wallet is to raise your overall auto insurance deductible. You can save hundreds each year by increasing your deductible. If you decide to increase your deductible, make sure you have enough money set aside in case you ever need to pay the deductible after an auto insurance claim. The last thing you want is to not be able to handle the deductible if your car needs repairs after a crash.