Loss Damage Waiver (LDW) meaning: what it is and what it covers

A Loss Damage Waiver (LDW) limits what you owe the rental company if your rental car is damaged or stolen. It isn't insurance. It's an agreement that shifts the cost from you to the rental company, except for your excess.

At a glance

• What it is: an add-on from the rental company that reduces your liability for damage to, or theft of, the car.
• What it costs: Price depends on the vehicle and rental length.
• What's the catch: you usually still pay a high excess, and many items are excluded.
• The alternative: buy RentalCover before you travel and decline the LDW at the desk. You pay up to 50% less† and $0 excess if you claim.

A Loss Damage Waiver is an agreement that reduces your liability for a rental car. It combines a Collision Damage Waiver (CDW) with theft coverage, which a CDW often lacks. Some rental companies use the two terms interchangeably.

An LDW isn't technically an insurance policy. It transfers liability for damage to, or theft of, the car to the rental company. If you have a covered incident, you only pay your excess (called the deductible in the US).

An LDW can cover:

• Single-vehicle accidents
• Damage to the main body of the car
• Some fire and vandalism
• Theft
• Optional extras like towing, windscreens, headlights and keys

Rental companies usually offer LDW at the pick-up desk. It can be useful, but it has gaps. Underbody damage and lockouts may not be covered, and you may still pay fees for towing or loss of use. LDWs from rental companies also often come with a large excess.

If that's not the cover you want, buy RentalCover protection before you pick up the car. You can then say no to the LDW at the rental desk. RentalCover costs up to 50% less than rental companies†, and you pay $0 excess. We also cover things many rental companies don't, like tyres, underbody damage and headlights.

The main difference is theft. A CDW usually covers damage to the car. An LDW typically covers everything a CDW does, plus theft.

Depending on the rental company, the terms may be used interchangeably, so always check what your agreement includes.

An LDW doesn't cover damage to another vehicle or injuries from an accident. Those fall under liability coverage instead.

It also commonly excludes:

• Damage to the undercarriage, roof, interior, windows and side mirrors.
• Towing, lockouts, keys, windscreens and headlights, unless you buy them as optional extras.
• Multi-vehicle accidents.
• Tyres and underbody damage.

RentalCover protection can cover a wider range of incidents than a rental company LDW, and costs up to 50% less†.

Super Collision Damage Waiver (SCDW) and Super Loss Damage Waiver (SLDW) are premium versions of CDW and LDW. As with the standard versions, an SLDW includes theft cover and an SCDW may not.

They cost more, but they cover most of what a basic CDW or LDW excludes. They usually reduce your excess to $0, though fees like towing can still apply.

Higher cost doesn't always mean better value. RentalCover is a more affordable option, with $0 excess if you claim.

For many renters, the LDW at the desk isn't the best value. It can leave gaps and a big excess if you claim.

RentalCover offers cheaper and more comprehensive cover. It's up to 50% cheaper than rental companies†, and it fills gaps like multi-vehicle accidents and underbody damage. If you claim, your excess is $0.

Get a quote before you travel, so you can say no to the LDW at the desk and yes to RentalCover.

"The LDW your rental company offers you might not be the right option for you. With RentalCover, you can get more comprehensive cover at a more affordable price. When an incident occurs, there's nothing for you to pay out-of-pocket.

For a secure journey with true financial protection, RentalCover's policies are well worth consideration."