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.
Tags: Loss Damage Waiver