In many countries, car rental insurance policies include CDW and SLI as standard. However, if you are renting in certain countries, such as those in North, South or Central America, you may need to purchase CDW and SLI separately.
In countries that don't cover CDW and SLI as standard cover within their car rental insurance policy, you’ll need four types of cover to ensure you are fully protected:
- Collision Damage Waiver (CDW), to cover you should you collide with another car.
- Loss Damage Waiver (LDW), to cover you in the event of theft.
- Supplemental Liability Insurance (SLI), to cover the cost of any damage caused by your car, to another.
- Car Hire Excess Insurance
Within this guide, we’ll look at what CDW, LDW and SLI mean for your car hire insurance, and how to avoid receiving an expensive bill if your rental car is damaged, stolen or involved in an accident while you are driving.
What is a Collision Damage Waiver (CDW) for rental cars?
A Collision Damage Waiver, often referred to as ‘CDW insurance,’ is not insurance as such. It’s an agreement from your car hire company to waive the costs of any damage incurred to the car in the event of a collision. The driver remains responsible for the excess, but the rest of the cost is waived.
What does CDW cover?
Should you be involved in an applicable incident, the CDW will cover the cost of damage to the main body and mechanics of your hire vehicle. It does, however, exclude impairment to some parts of the automobile.
Losses above the excess charge will be waivered when caused by accidental collisions with other objects or vehicles. If you’re a victim of theft or malicious behaviour, the CDW typically covers the damage due to forcible removal or destruction. Examples of this are; broken door handles, scratched paintwork and mechanisms that have been tampered with. Just be mindful of certain exceptions (as outlined below).
What’s not included by CDW?
A Collision Damage Waiver does not cover liability expenses, like damage to other vehicles, property or bodily injury. It also excludes accidents and incidents caused by risky behaviour. Examples of this are; speeding, reckless or off-road driving, negligence and driving under the influence. It’s worth noting that several parts of the hire car are not covered by CDW. These include the;
However, a Worldwide Car Hire Excess Insurance Plus CDW & SLI policy from insurance4carhire does cover this.
How much does Collision Damage Waiver (CDW) insurance cost?
Charges for CDW will vary across rental companies. Some will include CDW as standard. In some countries there is an additional cost for CDW. In the case that CDW is not provided, we can offer both CDW and SLI when you buy a Worldwide Plus policy.
If you rent a car in a country that does not typically cover CDW automatically (such as the US), through a UK-based company or website, CDW/LDW/SLI will usually – but not always – be included as part of the hire cost, as the company will assume it is required for travellers from Europe.
What is a Loss Damage Waiver (LDW)?
A Loss Damage Waiver (LDW) is the collective name for CDW and Theft Protection (TP), which also covers the costs of replacing the car if it is stolen. Usually, the excess on Theft Protection agreements are the same or higher than for CDW alone.
If you hire a car in Europe, Australia, New Zealand, Africa or many parts of Asia, basic LDW cover will normally come as standard with a rental car or van. However, you will likely have to pay a large excess in the event of theft or damage - so please check your documentation carefully. If the car hire does not include LDW, you can get cover on our Worldwide Plus policy.
What is Supplemental Liability Insurance (SLI)?
If you are involved in a car accident with a third party, supplemental liability insurance (SLI) insures you against any claims made by the third party to cover the cost of any damage to their car or injuries that they sustain.
SLI is also sometimes known as Additional Liability Insurance or ALI for short. In Europe, Australia, New Zealand, Africa and many Asian countries, SLI cover is normally included as standard when you hire a car.
Most car rental agreements in the USA, Canada, Caribbean, South and Central America offer no more than limited liability insurance, which can leave a car hirer exposed to high excess costs if they are involved in a serious accident and face litigation.
Rather than buying expensive SLI from your car rental company when you arrive in America, you can get our Worldwide Plus policy, which will either top up the cover provided by your rental company or act as primary cover where no SLI is provided with the rental agreement.
Top tips for renting a car in America
- Book before you go. If you can’t contain your excitement and would like to plan early, you can purchase an insurance4carhire policy up to 364 days in advance. It's almost always best to reserve your rental prior to arriving at the desk, this can save you money and time and ensure you avoid unwelcome charges.
- Never assume. Check what’s included in the package before you buy. Your car hire cover may already include CDW, third party cover (SLI) or both.
- Prepare yourself for the sales pitch. The hire company will have their own policies and procedures in place, but it’s not necessary to purchase their insurance if you are already covered by insurance4carhire.
- Read up on how the driving rules and customs differ between countries. We have in-depth guides on driving in the USA as well as driving in Canada.
Why choose a policy from insurance4carhire?
Excess cover is often offered when you pick up your rental car, but at a high cost - between £9 and £20 per day. A policy from insurance4carhire will cost you from £12.79 per trip or from £46.99 per year* and will cover your excess - up to £6,500 per claim.
About the author
This is a marketing article from insurance4carhire by our car hire excess insurance business unit director, Adam Summersby. Adam is a respected leader with 11 years’ varied experience in niche personal and commercial lines insurance, including caravan, site operators and excess reimbursement, with proficiency in leadership, sales and account management.