What is loss damage waiver?

Loss damage waiver (LDW) is also sometimes called collision damage waiver (CDW) and is a form of car insurance that applies to rented vehicles.

When you rent a car you may need to pay attention to the rental company’s insurance conditions as they can vary significantly from one company to another and between countries. Some rental companies provide ‘included in the price’ insurance that is the statutory minimum for the country concerned. In some cases this could be only Third-Party insurance meaning that any damage you cause to another person or another vehicle would be covered, but damage to the rented car would not be and you as the renter ill be expected to pay for it. This could be very expensive and this minimal insurance is therefore quite a risk.

In most cases where the included insurance only offers very basic cover, it is usually possible to pay the rental company an extra amount and secure LDW/CDW - meaning essentially that you will also be covered for damage to the rented car and yourself.

In many countries and with many of the larger rental companies, loss damage waiver insurance will be included in the rental price. Whether it is included or you have purchased it as an added-cost item, it lay be worth checking two additional aspects.

Firstly, it is a good idea to watch out for the excess. That’s the amount of any claim payable (sometimes called ‘the first part’) by the renter in the event of an accident even if they have loss damage waiver insurance. Typically the excess can range between 500 and 1500pounds sterling.

Secondly, it is worth checking the exclusions that are listed in the LDW insurance provided by the car rental company. That’s because many types of damage such as wheels, tyres, roofs and windows, are all excluded from loss damage waiver cover. These are all areas of a motor vehicle that are easily damaged and the costs of repair could be high.

It is also possible to purchase LDW insurance online from general insurance companies. These policies typically have the advantage that they are sold to a policyholder and NOT just a given rental car. This means that all cars driven by the policy holder in the period are covered and as these policies can be purchased for a fixed period of time rather than for a single vehicle hire, it is often the case that they are significantly cheaper than similar offerings taken through a car hire company.

It is also fairly common to find that LDW insurance purchased from a specialist insurance company is broader based in its coverage than LDW taken through a car hire company. Quite often areas of the vehicle such as wheels and tyres are in fact covered and this can reduce the chances of getting hit with heavy repair costs from the car hire company.

Loss damage waiver insurance may well make the difference between a relaxed and worry-free car hire, and sitting there clutching the steering wheel in terror in case an even minor accident happens! Accidents do happen even to the best of drivers so it lay be worthwhile checking this insurance out further.