Collision Damage Waivers and Supplementary Liability Insurance Explained (CDW & SLI)

In many countries around the world, car rental insurance includes CDW and SLI as standard. However, often car rentals in other countries, and particularly America (including the USA, Canada, South and Central America), may require CDW and SLI on top.

Customer at car hire desk talking to car rental adviser

What is a Collision Damage Waiver (CDW)?

A Collision Damage Waiver, often referred to as 'CDW insurance', is not insurance as such. It’s actually the rental company agreeing to waive the costs of damage to the rental vehicle in the event of a collision.

The renter remains responsible for the first part of the claim in the form of the excess but the rest of the cost is waived. It’s also worth noting that there are a number of parts of the car which are not covered by CDW, such as: the tyres, wheels, undercarriage, roof and windscreen.

What does Collision Damage Waiver (CDW) insurance cost?

Charges for CDW will vary across rental companies. Some will include CDW as standard. In the US, it doesn't always come as standard. In the case that CDW is not provided, we can offer it to you as part of the USA & Canada policy, which covers countries in The Americas and includes CDW and SLI. 

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. Normally the excess on Theft Protection agreements are the same or higher than for CDW alone.

If you hire in Europe, Australia, New Zealand, Africa or most parts of the Middle and Far East, basic CDW/LDW cover will normally come as standard with a rental car or van. However, this will more than likely have a large excess which you’ll be liable to pay in the event of an incident (that’s where our excess cover comes in). If the car hire comes with no CDW/LDW you can cover it on our Annual CDW Worldwide plus Excess policy

What is Supplementary Liability Insurance (SLI)?

SLI insurance covers car hire for claims made by third parties for either physical damage to their property (say their car) or injuries they sustain caused by the rental vehicle, even if it’s not your fault.

In Europe, Australia, New Zealand, Africa and most parts of the Middle and Far East this cover is normally included within the minimum insurance that has to be taken from your hire company.

Most car rental agreements in the USA, Canada, The Caribbean, South and Central America only offer limited or no third party liability insurance, which can leave a car hirer exposed if they were involved in a serious accident and faced litigation. Rather than buying SLI from your US rental company you can buy our USA & Canada CDW/SLI plus Excess Worldwide cover which will either top up the cover provided or act as primary cover where no SLI is provided with the rental agreement.

Note: If you rent a car in America through a UK based company or website, normally (but not always), CDW/LDW/SLI comes within the package as the company will assume it is required for travellers from Europe.