Answer: 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 and the person liable is an uninsured driver.
Typically, if you are in a car accident where the at-fault motorist is uninsured, you have to use your own collision coverage to get your car repaired, and this includes paying your associated collision deductible. If you purchase a collision deductible waiver as part of your policy, then your collision deductible will be waived when your insurance company determines that the liable party is uninsured.
With way too many drivers operating without insurance on the roadways, this coverage can keep you from having to pay out-of-pocket for any of your vehicle’s repairs if one of them hits you. It’s especially helpful coverage if you have a high collision deductible.
For example, if you have a $1,000 collision deductible and you’re hit by an uninsured motorist, 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 found and is identifiable as being uninsured.
As you can imagine, if people could use the waiver without the other driver being known, then some drivers would try to claim single car accidents as a hit-and-run to get their deductible waived when they were really at-fault and should pay it out.
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 couldn’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.
The more you pay for collision coverage, the more you pay for a collision damage waiver. We sampled some rates and found when including on a six-month policy the cost of a CDW ranged from $1 on a Corolla to $23 on a Mercedes.
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.