A collision deductible waiver, or CDW, (also known as a collision waiver of deductible) is coverage you can buy as part of your car insurance policy that will pay your collision deductible if your insured vehicle is damaged in an accident. The person liable is an uninsured driver.
Typically, suppose you are in a car accident where the at-fault motorist is uninsured. In that case, you use your collision coverage to repair your car, including paying your associated collision deductible. If you purchase a collision deductible waiver as part of your policy, your collision deductible will be waived when your insurance company determines that the liable party is uninsured.
With too many drivers operating without insurance on the roadways, this coverage can keep you from paying out-of-pocket for any of your vehicle’s repairs if one hits you. It’s beneficial coverage if you have a high collision deductible.
How does a collision deductible work?
For example, if you have a $1,000 collision deductible and an uninsured motorist hits you, the CDW will cover your $1,000 deductible amount, and then your collision coverage will pay for the remaining cost of the repairs to your vehicle.
This deductible waiver is usually only available when there is actual physical contact with another vehicle and the accident is caused by an identifiable driver.
Miss-and-run and hit-and-run accidents are not normally covered unless the at-fault driver is identified as uninsured.
As you can imagine, if people could use the waiver without the other driver being known, some drivers would try to claim single-car accidents as a hit-and-run to waive their deductible when they were at fault.
Does a CDW apply in states that allow partial liability?
In states that allow a percentage of liability to be assigned to each driver involved in an accident, you cannot be found partially at fault, or this coverage won’t apply. So, if you are found 10% at fault, you can’t use your CDW and would have to pay your deductible amount.
The collision deductible waiver can be purchased only in conjunction with collision coverage and is not available in all states or by all car insurance companies.
Depending upon the state and guidelines of the insurance company, you may also have to carry uninsured motorist coverage to carry collision deductible waiver coverage.
— Penny Gusner contributed to this story.