INSURANCE GUIDE

There are a lot of options available with a car insurance policy depending on your state and the car insurance company that holds your policy. One of the features that you can get is a collision deductible waiver (CDW). Before jumping into this additional coverage, learn what it is, how it benefits you, and its limitations.

What is a Collision Deductible Waiver?

A collision deductible waiver is coverage that you can purchase if you have collision coverage as part of your car insurance policy. In the event that you have an accident and the responsible party is uninsured, this coverage pays your collision deductible so that you don’t have any out of pocket costs to get your car repaired or replaced. It is not available in all states or from all car insurance companies.

Conditions to Get Collision Deductible Waiver

There are some conditions that you must meet to be able to get this type of coverage. You will have to have collision coverage on your vehicle. The car insurance company must offer this coverage, which not all companies do. If you live in a state that requires uninsured motorist coverage, you must also have this coverage to get the collision deductible waiver.

Conditions to Use the Collision Deductible Waiver

car accidentHaving this coverage does not necessarily mean that you won’t have to pay your collision deductible in the case of an accident. In order to use the waiver, the other driver must be at fault and uninsured. There are several situations in which the collision deductible waiver would not apply.

First, if you are in a hit and run accident, or a miss and run accident that caused damage to your vehicle, you will not be able to use the waiver. In order to use the waiver, you must be able to prove that you were not at fault and that the other party was uninsured. If the other party is not identified, you cannot prove that they were uninsured, and the waiver will not apply.

Second, some states allow for a portion of the fault to be placed on each party to the car accident. If you live in such a state and you were deemed to play a role in the accident, you will not be able to use the collision deductible waiver. Even if you are only found to be 10 percent at fault, you will still have to pay your deductible because part of the blame rests on your shoulders.

Evaluating the Cost of Collision Deductible Waiver

Adding a collision deductible waiver to your car insurance policy is relatively inexpensive. The price of such coverage can vary widely depending on your driving history, your collision coverage amounts and premiums, and your vehicle year, make and model. The average cost of collision deductible waiver coverage is about $1 to $23 per month for a good driver. This is relatively inexpensive, so it might pay to have the peace of mind of having this coverage.

Is It Worth It?

With all of the limitations on how the collision deductible waiver can be used, you may be wondering if it is even worth it to have this coverage. It really depends on your area and your own finances. If you don’t believe that you will ever need to use the waiver and you know that you could come up with your collision deductible in a pinch, you might want to forego this coverage.

However, consider your actual risk and the low cost of the coverage before making up your mind. It is estimated that about one in eight drivers in America are uninsured. That is about 13 percent of the drivers on the road. It may not seem like a large amount, but when you are driving in heavily populated areas, it means that you are very likely to be on the road with an uninsured motorist. If a motorist is uninsured, they are likely irresponsible and more likely to cause an accident. Having collision deductible waiver coverage may be worth the peace of mind of knowing that you are not going to have to come up with a $1,000 deductible at the drop of a hat.

Bottom Line

In the end, a collision deductible waiver can pay for itself, if only in the peace of mind you will have in driving on the road with uninsured drivers. Keep in mind that not all car insurance companies offer this coverage, and there may be additional requirements to be met depending on the company and their rules. If you are interested in collision deductible waiver coverage, shop around online to find car insurance companies that offer it and compare rates. It is usually a good idea to speak with an agent, as online quotes may not offer the ability to opt into this coverage.