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CDW Insurance means the car rental company waives the right to collect a high deductible from you if the car is damaged, and most importantly it covers most of. Damage waiver or, as it is often referred to, collision damage waiver (CDW) or loss damage waiver (LDW), is optional damage insurance coverage that is. Collision damage waiver (CDW) is additional insurance coverage offered to an individual renting an automobile. This amount is payable to the rental company and may be called "excess", " liability" or (in the US) a "deductible". What is CDW Insurance? The amount payable to the rental company in the event of accidental damage to the rental car. Most non-CDW car rental insurance will cover those extras.