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Collision Damage Waiver in North America

For campervan and motorhome rentals, try our motorhome and campervan excess coverage overview or for 4x4s and 4x4 campers, try our 4x4 excess coverage page.

When you rent a car in the US and Canada your default excess (also called your "liability") is usually equal to the entire value of your rental car. Some states in the US and Canada do not require that the vehicle owner has mandatory third party liability, meaning the driver of the car is potentially liable for injuries to other people and their property.

The following explanation seeks to answer the question frequently raised when hiring a vehicle: How can a renter decrease their potential excess for the car they have rented?

These are the main options:

  1. Purchase "Supplementary Liability Insurance (SLI)" from the rental company. This will be offered generally in states where third party liability is not required to be held by the vehicle owner. The SLI coverage is usually between $1,000,000 and $2,000,000. However we always recommend that you ask the rental company as there are differences from state to state.
  2. Purchase "Collision Damage Waiver (CDW)" or "Loss Damage Waiver (LDW)"from the rental company. Most car rentals in North America has this option included by default. This waives most of the excess for damage to the car. While CDW/LDW (it also has many other names which all serve the same purpose) decreases your excess from the full value of the car towards $0, there is often $500-$2,000 excess remaining. As always, discuss with your rental company
  3. Purchase "Excess Reduction" (or equivalent) from the rental company. This decreases the above amount to $0-500.
  4. Take out "rental cover" from RentalCover.com as an alternative to the rental companies' Excess Reduction, to provide coverage for the leftover from CDW. This reduces your liability to $0 for policies sold on RentalCover.com (unless otherwise stated in your quote). RentalCover.com policies also include coverage for many types of damage that are excluded from CDW/LDW policies such as windscreen, tyre, headlight, underbody and roof damage. It is not unusual to need several thousand dollars of coverage even if your CDW-reduced liability might be $1,000 so all policies sold by RentalCover.com include Free Gap Coverage and have a high default amount of coverage.

 

To summarise, your main options and our recommendations are below:

  1. Supplementary Liability Insurance (SLI). Our recommendation: International travellers should take this if available as it removes any third party liability.
  2. Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW). Our recommendation: Purchase from the rental company. Your excess will be reduced from the full value of the car to a lower amount. However if the lower amount is significant (it usually is) we recommend also taking out #4B.
  3. A. "Excess Reduction" from the Rental Company. Our recommendation: Do not take this as independent rental cover is a lot cheaper and has none of the common policy exclusions.
  4. B. Independent Rental Cover from RentalCover.com. Our recommendation: This is a great alternative to the rental company's Excess Reduction as it is much cheaper and includes types of accidents/damage that they exclude such as windscreen, tyre, headlight, roof and underbody damage. In the event of an accident you pay the rental company for damages and then make a claim to RentalCover.com. Claims are typically processed and reimbursed within 7 working days.
     
Supplier (1) Collision Damage Waiver (CDW) (i.e. max. excess payable)


(2) Excess Reduction (cost per day)
 

(3) Excess Redution (max. amount payable if you "reduce excess")
RentalCover.com N/A (RentalCover.com provides coverage for the below amounts) $5 to $15 per day $0
Suppliers in the US $2200 to $7500 $8.99 to $89.99 per day $0 to $2000
Suppliers in Canada $2200 to $7500 $9.99 to $36.99 per day $0 to $2000

 

 

 

 

 

 

 

 

 

*Some of the above amounts are very high due to the wide range of vehicle types on offer by the rental companies, such as luxury sports cars.

 

If you take a RentalCover.com policy instead, you would be much better off:

1. Your RentalCover.com claim fee would be $0.
2. The RentalCover.com price policy guarantees that you will pay minimum 50% less compared to the rental company's excess reduction.
3. Your RentalCover.com policy includes many common types of damage, including windscreen, tyre, underbody, roof and overhead damages and damages caused by driving at night, hitting animals, in single vehicle accidents, demurrage, and more.