Collision Damage Waiver (CDW) is a type of cover for hire cars. It limits the driver’s liability if the rental car is damaged. This means that the car hire company will not charge you the whole cost of the car if it gets damaged while you have it.
There is almost always an excess, which means you will pay the first part of any repair costs.
The specifics of what Collision Damage Waiver includes depends on the car hire company and where you hire the car.
But it does not usually include windscreens, tyres, undercarriage, replacement locks, replacement keys and towing charges. This means that if these parts of the car are damaged, or if you are towed, you will be liable for the whole cost, not just an excess.
Also, Collision Damage Waiver only works if you stick to the terms of the rental agreement (which you’ll sign when you collect the car). This means that if (for example) you drive drunk or park somewhere risky and the car is damaged, you will be liable for the whole cost of the repair, not just an excess.