If you’ve ever hired a car abroad or in the UK, you’ve probably come across terms like Collision Damage Waiver, excess waiver, super CDW, and car hire excess insurance.
For many travellers, the terminology can feel confusing — especially when standing at the rental desk after a long flight being asked whether you want to “upgrade your cover”.
So, what’s the difference between CDW and car hire excess insurance?
In simple terms:
- CDW usually reduces your liability if the rental car is damaged or stolen
- Car hire excess insurance may help reimburse the excess amount you are still responsible for paying and any damage not covered by the CDW.
Understanding how the two work together can help you make a more informed decision before collecting your rental vehicle.
Quick Summary
| Feature | CDW | Car Hire Excess Insurance |
|---|---|---|
| Usually included with rental | Often yes | Usually seperate |
| Covers damage/theft liability | Usually partially | May reimburse excess costs |
| Excess still applies | Usually yes | Designed to cover eligible excess charges |
| Includes tyres/wheels/glass | Often excluded | May be included |
| Purchased from rental desk | Often yes | Usually purchased separately |
| Works as reimbursement | No | Usually yes |
Cover varies between providers and policies, and all claims are subject to terms, conditions and exclusions.
What Is CDW?
CDW stands for Collision Damage Waiver.
It is commonly included as part of a car rental agreement and is designed to reduce your financial responsibility if the hire car is damaged or stolen.
However, CDW is not always a full insurance policy in the traditional sense. Instead, it is typically a contractual waiver between you and the rental company.
In practice, this means the rental company agrees not to hold you fully responsible for the total cost of damage, provided you comply with the rental agreement terms.
What Does CDW Usually Cover?
Basic CDW often covers:
- Bodywork damage
- Collision damage
- Theft of the vehicle
- Accidental damage during normal use
However, the level of cover varies significantly between rental companies and countries.
What Does CDW Usually Not Cover?
This is where many travellers get caught out.
Standard CDW may exclude:
- Tyres
- Wheels
- Windscreens
- Roof damage
- Undercarriage damage
- Interior damage
- Lost keys
- Administration charges
- Loss of use charges
You may also still be liable for a substantial excess payment even if CDW applies.
For example, you might still need to pay:
- £800
- £1,500
- Or even more depending on the vehicle and country
This is one reason standalone excess insurance has become increasingly popular.
What Is Car Hire Excess Insurance?
Car hire excess insurance is designed to help reimburse certain costs you may be charged by the rental company following accidental damage or theft of the rental vehicle.
Unlike CDW, standalone excess insurance is usually purchased separately from the rental company.
Most policies operate on a reimbursement basis:
- The rental company charges you
- You pay the amount owed
- You submit a claim to your insurer
- Eligible costs may then be reimbursed
Policies vary, but they can sometimes include protection for:
- Excess charges
- Tyres and wheels
- Windscreens and glass
- Key replacement
- Lockouts
- Towing charges
- Misfuelling
- Loss of use charges
How Do CDW and Excess Insurance Work Together?
Think of CDW and excess insurance as two separate layers.
Layer 1: CDW
The rental company’s CDW reduces your overall liability for damage or theft.
Layer 2: Excess Insurance
Excess insurance may help reimburse the portion you still have to pay yourself.
For example:
| Scenario | Amount |
|---|---|
| Damage repair cost | £2,000 |
| Rental company CDW applies | Yes |
| Excess payable by driver | £1,000 |
| Potential reimbursment from excess insurance | Up to policy limits |
This is why many standalone Car Hire Excess policies require the rental agreement to include basic CDW cover in the first place.
What Is Super CDW?
You may also hear terms like:
- Super CDW
- Super Collision Damage Waiver
- Zero Excess Cover
These are usually optional upgrades sold directly by the rental company.
They are designed to reduce or remove the excess entirely.
Advantages can include:
- Simpler claims handling
- No reimbursement process
- Reduced deposit requirements
However, rental desk upgrades can sometimes be more expensive than standalone excess insurance purchased in advance.
The right option will depend on:
- Your destination
- The rental company
- The level of protection you want
- Your budget
- How comfortable you are with reimbursement-based cover
Is Standalone Car Hire Excess Insurance Cheaper?
In some cases, standalone excess insurance can cost less than buying additional cover directly from the rental desk.
Rental desk upgrades are often charged per day, while standalone policies may offer:
- Single trip cover
- Annual multi-trip cover
- Worldwide policies
- Europe-only policies
Frequent travellers sometimes choose annual policies to cover multiple rentals throughout the year.
However, pricing and cover levels vary between providers.
What Can Car Hire Excess Insurance Cover?
Depending on the provider and the policies’ terms, conditions and exclusions, cover may include:
- Excess reimbursement
- Tyres and wheel damage
- Windscreen and glass damage
- Towing costs
- 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
- Lockout and key cover
- Misfuelling cover
All cover is subject to terms, conditions, exclusions and eligibility criteria. It is important that you read the policy documents before purchasing any policy, so you know what is and is not covered.
What Is Usually Excluded?
As with all insurance products, exclusions apply.
Common exclusions may include:
- Driving under the influence
- Dangerous or reckless driving
- Driving off-road
- Track days or racing
- Damage caused deliberately
- Unauthorised drivers
- Mechanical failure
- Breaching the rental agreement
Leisure Guard’s policy also excludes:
- Vans and campervans
- Cars over £65,000 in value when new
- Vehicles 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 exclusions. It is important that you always read the policy wording for any policy so you understand what is not covered.
Do You Need Both CDW and Excess Insurance?
This depends on your needs.
Standalone car hire excess insurance usually works alongside the rental company’s basic CDW cover rather than replacing it entirely.
In fact, many excess insurance policies require the rental agreement to include basic CDW before a claim can be made.
Without CDW in place, you could potentially be liable for the full cost of the vehicle.
Tips Before Hiring a Car
Before collecting your rental car:
- Check what cover is already included
- Understand the excess amount
- Read the rental agreement carefully
- Inspect the vehicle thoroughly
- Photograph any existing damage
- Keep all paperwork and receipts, avoid paying by cash
- Check country-specific driving rules
If an accident or theft occurs:
- Notify the rental company immediately
- Report incidents to the police where required
- Gather evidence and photographs
- Keep copies of 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 abroad or in the UK, 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
CDW and car hire excess insurance are related, but they are not the same thing.
CDW is typically included with your rental and helps reduce your liability if the vehicle is damaged or stolen. However, it often still leaves you responsible for paying a potentially significant excess.
Car hire excess insurance is designed to help reimburse eligible excess charges and certain other costs, depending on the policy wording.
Understanding the difference before you travel can help you avoid confusion at the rental desk and make a more informed decision about the level of protection you may want when hiring a car.
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.
