Protect Your Excess

Loss Damage Waiver (LDW) is a type of insurance cover for rental cars. It can also be known as Collision Damage Waiver (CDW). It typically covers the loss of, and damage to, your hire car and generally includes theft.

While it isn’t really insurance, it works in pretty much the same way. You could look at it from the point of view that since the hire car doesn’t belong to you, you can’t insure it but you are responsible for any damage that happens to it during the period of your rental.

The owners (the car rental company) may typically try to sell you a release from this responsibility known as loss damage waiver. With this they ‘waive’ their right to charge you for repairs.

Cover of this nature is very like insurance in that it typically carries an excess, which is the amount of money that you agree to pay to the car hire company in the event that the hire car is damaged while on rental to you.

In addition to the excess you may find that loss damage waiver excludes the windscreen, the tyres, the roof and the undercarriage from its cover. This means that if you damage any of these parts during your rental then you would still be responsible to pay for their repair. These costs would be separate to any excess charges due for damage to other parts of the car.

If, like many, you feel that the potential expense in these circumstances is unacceptable, then you may choose to buy some excess insurance to top-up the loss damage waiver cover. If you then damaged the car, you would claim on this policy for the excess that you would be responsible for paying.

You may find that the excess insurance offered by the car hire companies is more expensive than that available from other sources. Happily there can be cheaper cover out there which often has the added benefit of covering those excluded parts as well and at no extra cost.

You can find it on the web site of some of the Internet based car hire insurance providers. These specialists can also supply policies specifically tailored for rentals in the UK, Europe, USA or other destinations worldwide.

They also offer longer-term annual cover that may be of special interest if you rent cars frequently. An annual policy would provide you with excess cover for all of your rentals in the course of a year (one at a time of course).

These specialist providers tend not to cover the more exotic makes of car such as sports or vintage models or very high value vehicles.

They can also offer LDW (Loss Damage Waiver) cover for USA rentals (and some other destinations worldwide) that again may be very much cheaper than the cover you could buy at the car rental desk.

You simply buy your policy from the specialists in advance of your rental and take the policy details with you, as your car hire company may need them to contact your insurer if you have an accident.

So, whether you’re looking for loss damage waiver cover, excess cover or both, why not have a look at what these specialist providers have on offer?

Loss damage waiver is a term used to describe a form of insurance that applies to rental cars. It may sometimes also be referred to as CDW (Collision Damage Waiver).

At the time a car is rented, the renter will usually want to be sure that he or she will be covered by insurance against the two main categories of risk. These two categories are damage or injury caused to other people and damage caused to the rented car itself. Insurance to cover the first of these is usually called third-party liability while the second is called loss damage waiver.

The latter may be included in the rental price or the car rental company may offer it for sale separately. In either situation, the car rental insurance sold by rental companies is usually very significantly more expensive that similar insurance purchased elsewhere. Not only that, it is often also the case that this type of insurance is, when provided by the car rental company, limited in terms of its cover.

The loss damage waiver insurance sold by rental companies will probably contain a number of exclusions relating to damage incurred to specific areas of the rented car. These usually include the undercarriage, wheels, tyres, roof and windows. These are all areas easily damaged and if not covered by the loss damage waiver, the renters could find themselves needing to pay out some hefty sums.

It’s also the case that the car rental company’s policy will also carry excess. Excess is an insurance term used to describe an amount of money that the renter may have to pay towards the cost of an insurance claim. It’s often set between 500 and 1500 pounds. In the case of a claim for 1500 pounds and a policy that has 1000 pounds excess, it is the renter that would have to pay the first 1000 pounds of the 1500 pounds claim.

When viewed together the risks constituted by the rental company’s exclusions and excess on their standard loss damage waiver policies can make renters uneasy. If that’s the case, they can do one of two things.

It may be possible to pay the car rental company extra for what is sometimes called ‘top-up’ insurance – this can though prove to be very expensive compared to the second route.

It is also possible to purchase this type of cover from direct insurance providers over the Internet. Their policies will cover things such as excess payments or damage to ‘excluded’ areas of the car. The renter may still have to pay these to the rental company but their direct insurance would reimburse them.

The loss damage waiver insurance purchased from a direct provider has another major advantage apart from lower cost. It can be purchased on a daily or annual basis meaning that it would cover any rented vehicle during the lifetime of the policy, although this may exclude certain specialist vehicle types as outlined in the terms and conditions. So, if you don’t enjoy paying more than is necessary, this could be an option well worth investigating further.

Loss damage waiver is an insurance term used to describe a type of cover that relates to rental cars. In some companies and countries it may be called collision damage waiver or CDW for short.

If you’re renting a car, the insurance position will vary considerably depending upon the country you are renting in and the car hire company you are planning to use. In some cases, as in he USA, you may find that the rental car price includes virtually no insurance cover and all forms of insurance need to be purchased as ‘optional extras’. In other countries the rented car may come with combinations of insurance included in the basic price.

It is the renter’s responsibility to check what the insurance position is and whether the insurance they have is adequate or not for their needs. To do this though one needs to understand the three basic forms of rental car insurance.

a) Third Party or Third Party liability.

This type of insurance will offer you cover against damage that you may do to a third party or their property. It is usually worth checking this carefully. That’s because although in the UK the amount of cover in this category is unlimited by law, in other countries it may be limited to an unrealistically low level given the size of the awards a court could make following an accident.

b) Theft cover.

As the name suggests, this would cover you should the rental car be stolen whilst in your charge.

c) Loss damage waiver (LDW or CDW)

This form of insurance protects you against the costs of any damage to the rental car while you’re responsible for it. Once again, you may need to check this carefully because the basic forms of loss damage waiver from the car rental companies may be limited. You may find that several areas of the vehicle are excluded (e.g. the wheels) and this could be very expensive for you following a minor accident.

Finally, the car rental company’s insurance is very likely to carry significant excess. The excess is a financial amount that you’d be expected to pay towards the cost of any claim and it is typically in the range 500-1500 pounds.

If you’re uncomfortable with any aspects of your basic car rental insurance, you will have the option of purchasing additional insurance that will do things such as increase the amount of personal liability cover available, cover areas of the car normally excluded by standard loss damage waiver and reduce or eliminate the excess.

You can purchase these additional insurances from the car rental company but this is often a very expensive option. A more economic route is usually that offered by the direct insurance companies who offer car rental insurance online – usually much cheaper than the rental companies. So whether you’re looking for additional loss damage waiver or third party liability insurance, it may be worth while checking out the direct insurers rather than just taking the rental company’s insurance by default. It could save you some serious amounts of money.

Loss Damage Waiver (LDW) is also perhaps more commonly known as Collision Damage Waiver (CDW). Within the context of car rental insurance, it refers to a type of policy that will cover the renter for damage to the rented vehicle. In the UK it is normally sold with theft cover that will protect the renter against the theft of the vehicle (but not theft of the contents).

With loss damage waiver policies of this type, the rental company is in effect ‘waiving’ or giving up their right to charge the renter for the cost of loss of or damage to their vehicle.

In the UK and many European countries, many car rental companies will quote a rental price to the customer that already includes CDW for the duration of the rental. If the customer is arranging the rental online then the whole thing can be done with one click. Few will give even a passing thought to how much that insurance on its own is actually costing them, whether it is good value for money, whether or not they could have bought the same level of cover elsewhere or even whether or not it is giving them the level of cover they expect.

It may be dangerous to assume that all loss damage waiver policies of this type will cover all of the costs relating to any damage to the vehicle – in fact few if any of the basic ‘in the price’ CDW policies will do so. Many will have exclusions on the most commonly damaged parts of a car such as the windscreen, tyres, roof and undercarriage. This means that in the event of damage to any of these areas it is still the renter who has to pay.

In addition to this most CDW policies will carry what’s called ‘excess’, something that obliges the renter of the vehicle to meet the first part of the costs relating to a claim. Some companies set excesses anywhere between 500 and 1500 pounds, something that means in the event of a claim the renter would have to pay up to this amount before the insurer would contribute to the costs. Most car hire companies will offer for a price, additional insurance sometimes called ‘excess waiver insurance’ that can be used to reduce or remove the excess. It is worth noting that even with such additional cover, the costs of any damage to those items commonly excluded from policies may still have to be met by the renter.

Contrary to what many may believe, the purchase of these types of insurance from the car rental company is not obligatory. It is in fact possible to purchase collision damage waiver or loss damage waiver from direct specialist insurance companies or brokers rather than the car rental company. Many of these companies will offer LDW or CDW policies that include those all-important areas of the windscreen, roof, tyres and undercarriage.

Loss damage waiver policies bought from specialist insurance companies can be purchased on a daily or an annual basis. With this type of insurance it is the policyholder who is insured rather than the rental. The policyholder can therefore use the same policy for any number of rentals within the duration of the insurance. This kind of arrangement can be especially useful if the policyholder plans to rent vehicles on a number of occasions over a specified time period and there could be significant savings when compared to the daily rates charged by car rental companies.