Hiring a car is one of the most popular ways to explore the United States, whether you’re planning a Florida road trip, driving California’s Pacific Coast Highway, or visiting multiple cities during your holiday.
However, car hire insurance in the USA can feel very different compared to hiring a car in the UK or Europe.
Many UK travellers are surprised by:
- Different insurance terminology
- State-by-state variations
- Large security deposits
- Multiple optional cover upgrades
- High excess charges
- Pressure to buy additional protection at the rental desk
In this guide, we’ll explain how car hire insurance in the USA works, what UK drivers should look out for, and the difference between Collision Damage Waiver and standalone car hire excess insurance.
Quick Summary
- Car hire insurance in the USA often works differently to Europe.
- Basic cover levels vary between rental companies and states.
- UK travellers should check what is included before travelling.
- CDW usually reduces your liability for damage or theft, but an excess may still apply.
- Standalone car hire excess insurance may help reimburse eligible excess charges and certain other rental-related costs.
- Always read both the rental agreement and insurance policy wording carefully.
Why Is Car Hire Insurance in the USA Different?
In Europe, many rental agreements include basic Collision Damage Waiver (CDW) and third-party liability cover as standard.
In the USA, however, rental pricing and insurance structures can vary significantly depending on:
- The rental company
- The booking platform
- The state you are visiting
- The vehicle type
- Whether you booked from the UK or locally in the USA
This can make comparisons difficult if you are unfamiliar with American rental terminology.
Common USA Car Hire Insurance Terms Explained
When hiring a car in America, you may encounter several unfamiliar terms.
CDW (Collision Damage Waiver)
Helps reduce your liability if the rental vehicle is damaged or stolen.
LDW (Loss Damage Waiver)
Similar to CDW and often used interchangeably in the USA.
SLI (Supplemental Liability Insurance)
Additional third-party liability protection.
Excess
The amount you may still need to pay towards a claim.
Zero Excess Cover
Additional protection designed to reduce or remove your excess liability.
Standalone Excess Insurance
Separate insurance purchased independently from the rental company to help reimburse eligible excess charges.
Does Car Hire in the USA Include Insurance?
Sometimes — but not always in the way UK travellers expect.
Many USA rental packages booked from the UK already include:
- Basic CDW or LDW
- Third-party liability cover
However, the level of protection can vary significantly.
Always check:
- Your booking confirmation
- Rental agreement
- Insurance inclusions
- Excess amounts
- Exclusions
Some bookings may include only minimal protection, while others may include more comprehensive cover.
What Is CDW in the USA?
Collision Damage Waiver (CDW) is designed to reduce your financial responsibility if the rental car is damaged or stolen.
However, standard CDW often:
- Includes an excess
- Excludes tyres and wheels
- Excludes windscreens or glass
- Excludes roof or underbody damage
- Does not cover key replacement
- May not include administration charges
Why Do UK Drivers Buy Standalone Excess Insurance for the USA?
Many travellers choose standalone excess insurance because it can sometimes:
- Cost less than rental desk upgrades
- Include tyres, wheels and glass
- Offer annual multi-trip cover
- Be arranged before travelling
- Provide additional benefits such as key cover or misfuelling protection
Policies vary between providers, so it’s important to compare cover carefully rather than focusing solely on price.
What Can Car Hire Excess Insurance Cover?
Depending on the policy wording, cover may include:
- Excess reimbursement
- Tyres and wheel damage
- Windscreen and glass damage
- Towing charges
- Loss of use charges
- Administration fees
- Key replacement
- Lockout cover
- Misfuelling cover
For example, Leisure Guard’s Car Hire Excess & Damage Insurance includes:
- Up to £10,000 excess reimbursement
- Up to £5,000 for glass damage
- Up to £5,000 for tyres and wheels
- Misfuelling cover
- Towing and administration
- Cutting Short your rental
- Personal Possessions
- Lockout and key cover
All cover is subject to policy terms, conditions, exclusions and eligibility criteria. Please ensure you read your policy documents before purchasing any policy.
What Is Usually Not Covered?
Like all insurance products, exclusions apply.
Common exclusions may include:
- Driving under the influence
- Reckless or dangerous driving
- Off-road driving
- Racetrack use
- Unauthorised drivers
- Mechanical failure
- Breaching the rental agreement
- Wear and tear damage
Leisure Guard’s policy also excludes:
- Vans and campervans
- Vehicles over £65,000 in value when new
- Cars with more than 9 seats
- Where the rental agreement doesn’t include the rental company’s basic CDW Driving on racetracks or derestricted toll roads
This is not a full list of all exclusions, please read the policy documents carefully before purchasing a policy.
What About Security Deposits?
Even if insurance is included, rental companies in the USA often place a security deposit hold on your credit card.
This can range from a few hundred dollars to significantly more depending on:
- Vehicle type
- Rental company
- Location
- Whether you purchased additional cover
Some rental desk upgrades may reduce the deposit amount, but this varies between providers.
Before travelling, check:
- Credit card requirements
- Deposit amounts
- Whether debit cards are accepted
- Fuel policies
- Additional driver charges
Should You Buy Rental Desk Cover in the USA?
Rental desk upgrades may suit travellers who:
- Prefer a simpler claims process
- Want lower excess amounts immediately
- Do not want to reclaim costs later
- Prefer convenience
Standalone excess insurance may suit travellers who:
- Want to compare policies before travelling
- Hire vehicles regularly
- Want annual cover
- Prefer potentially lower upfront costs
Neither option is automatically better for every traveller.
Tips for Hiring a Car in America
Before collecting your vehicle:
- Check what cover is included
- Understand the excess amount
- Read the rental agreement carefully
- Photograph existing damage
- Check tyres and windscreens
- Keep all receipts and documents, avoid paying by cash
- Confirm authorised drivers
While driving in the USA:
- Familiarise yourself with local driving laws
- Check toll road requirements
- Understand fuel policies
- Be aware that rules vary between states
If an incident occurs:
- Notify the rental company immediately
- Gather photographs and evidence
- Obtain police reports where required
- Keep your rental agreement, their damage report, invoices and payment confirmations
Get a Quote for Car Hire Excess Insurance from Leisure Guard
If you’re hiring a car in the USA, Leisure Guard Car Hire Excess & Damage Insurance could help provide protection against eligible excess charges and certain other rental-related costs following accidental damage or theft.
Cover can include:
- Excess reimbursement
- Tyres, wheels and glass
- Lockout and key cover
- Misfuelling
- Towing and administration costs
- Cutting Short your rental
- Personal Possessions
- Annual and single trip policies
All cover is subject to policy terms, conditions, exclusions and eligibility criteria.
Before purchasing any policy, always read the policy wording carefully to ensure the cover is suitable for your needs.
Get a quote online with Leisure Guard today.
Final Thoughts
Car hire insurance in the USA can be more complex than many UK travellers expect, especially when faced with unfamiliar terminology and optional upgrades at the rental desk.
Understanding the difference between CDW, rental desk cover and standalone car hire excess insurance can help you make a more informed decision before travelling.
As with any insurance product, always read the rental agreement and policy wording carefully to understand what is included, what exclusions apply, and what level of protection may suit your trip.
Not all car hire situations, territories will be covered by Leisure Guard Car Hire Excess and Damage insurance policy. Be sure to read the policy details carefully to see what is and is not covered.
The thoughts and opinions expressed in the page are those of the authors, intended to be informative, and do not necessarily reflect the official policy or position of Leisure Guard Car Hire Excess and Damage Insurance. This content is for general information purposes only and is not intended to provide advice or amend the terms of any policy.
