Renting a car overseas? One of the most costly add-ons at the rental desk can happen when agents insist that you buy "car hire excess insurance," a.k.a. the "super collision damage waiver" (SCDW).
The SCDW protects you from having to pay anything if your hire car is damaged or stolen, with no deductible.
Car Rental Definition of SCDW
When you rent a car in the U.S. or Canada, you have a choice: Buy the collision damage waiver (CDW) or don't. In Europe and some other regions, there may be a third option, known as SCDW or simply "excess insurance."
SCDW is similar to the CDW in the U.S. in that it can be thought of as "walk-away insurance." At the car rental counter, you may be told that you can either have a huge hold (the equivalent of thousands of dollars) put on your credit card, or pay a daily charge for the SCDW. This waiver typically costs between $20 and 32 per day.
Think of the SCDW as collision insurance plus coverage of the "excess," or deductible. Rental car companies in Europe and some other parts of the world protect themselves by putting a preemptive hold on your credit card to cover this excess. Opting for this type of insurance is essentially protecting yourself from paying the deductible.
In theory, the SCDW is optional, but not buying it comes with a big inconvenience and risk. First, the massive hold on your credit card may put you in a bind during your travels if you don't have enough remaining available credit to get you through your trip.
Second, if the rental car is returned with any damage whatsoever, the cost of repairing the damage will come out of that hold money. Then it would be up to you to file a claim to recoup that amount from any insurance coverage you may have through your credit card or third-party insurer.
Basically, the Super Collision Damage Waiver (sometimes called Car Hire Excess Insurance) covers any damages to the rental car if something happens to it while in your possession. It's a confusing term because the waiver is not for you, the driver. The waiver is for the car rental company. When you sign the waiver, the car rental company waives the right to hold you responsible for damages to the car. When you decline the waiver, you are giving the rental company the right to hold you responsible.
One other advantage of opting for the SCDW is that it speeds up the return process. If you buy the full insurance, you don't have to hang round for the inspection. Instead, you just hand over the keys and go.
How to Know If You're Already Covered
The SCDW is optional, and it's possible to already by covered for collision damage. Your credit card might offer car rental insurance for overseas rentals, but make sure it's comprehensive coverage that includes damage to the vehicle's windshield, tires, undercarriage, and so on. Some policies have exceptions for certain types of damage, and that makes you vulnerable.
If you opt to decline the SCDW, just know that you will have that massive hold put on your credit card. So plan to bring several cards on your trip to spread out your other travel costs.
Also note that some credit cards have recently removed this benefit, so always check before embarking on a trip.
If you have more than one credit card, it's important to know how to choose the right card to pay for your car rental.
Is the SCDW a Car Rental Scam?
While some travelers may think of SCDW as a scam, it's probably more accurately described as legalized extortion. In effect, the car rental company puts a massive hold on your credit unless you buy the "excess" insurance coverage.
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