Hiring a car abroad or in the UK can sometimes feel confusing, especially when you’re faced with unfamiliar insurance terms at the rental desk.
From CDW and LDW to excess protection and SLI, understanding what these terms actually mean can help you make a more informed decision before driving away.
Many travellers only discover how car hire insurance works after they’ve been asked whether they want to “upgrade their protection” or reduce their excess.
In this guide, we explain some of the most common car hire insurance terms in plain English, helping UK travellers better understand what they may already have — and what additional cover options may be available.
Quick Summary
Some of the most common car hire insurance terms include:
- CDW (Collision Damage Waiver)
- LDW (Loss Damage Waiver)
- Excess
- Excess Reimbursement Insurance
- SLI (Supplemental Liability Insurance)
- Super CDW
- Zero Excess Cover
- Loss of Use
- Misfuelling Cover
Insurance terms and cover levels vary between rental companies, countries and insurers, so always read the rental agreement and policy wording carefully.
What Is CDW (Collision Damage Waiver)?
Collision Damage Waiver, usually shortened to CDW, is one of the most common terms in car hire.
CDW is typically included within the rental agreement and is designed to reduce your financial responsibility if the vehicle is damaged or stolen.
However, CDW usually:
- Comes with an excess
- Does not always cover every type of damage
- May exclude tyres, wheels or glass
- May not include key cover or administrative fees
According to the Leisure Guard policy wording, rental companies commonly include basic CDW but still charge an excess if the rental vehicle is damaged or stolen.
What Is LDW (Loss Damage Waiver)?
LDW stands for Loss Damage Waiver.
In many countries — particularly the USA — LDW is used instead of CDW.
The two terms are often very similar and are sometimes used interchangeably by rental companies.
LDW generally combines:
- Collision damage protection
- Theft protection
However, cover levels and exclusions vary between providers.
What Is Car Hire Excess?
The excess is the amount you may still need to pay if the rental vehicle is damaged or stolen.
For example:
| Scenario | Amount |
|---|---|
| Damage Repair Cost | £2,000 |
| Rental company excess | £1,000 |
| Amount you may have to pay | £1,000 |
Excess amounts can vary significantly depending on:
- Destination
- Vehicle type
- Rental company
- Driver age
- Level of cover purchased
Some excesses can run into thousands of pounds.
What Is Car Hire Excess Insurance?
Car hire excess insurance is designed to help reimburse certain charges you may become liable for following accidental damage or theft of a rental vehicle.
Standalone excess insurance is usually purchased separately from the rental company before travelling.
Most policies work on a reimbursement basis:
- The rental company charges you
- You pay the charge directly
- You submit a claim to your insurer
- Eligible costs may then be reimbursed subject to policy limits and conditions
What Is Super CDW?
Super CDW is an optional upgrade sold by many rental companies.
It is designed to reduce or remove the excess amount you would otherwise need to pay following damage or theft.
You may also see this referred to as:
- Super Collision Damage Waiver
- Premium Protection
- Full Protection
- Zero Excess Cover
Rental desk upgrades vary significantly between providers and destinations.
What Is Zero Excess Cover?
Zero excess cover is designed to reduce your excess liability to £0.
This means that if the rental car is damaged or stolen, you may not need to pay an excess amount yourself, provided the claim falls within the terms of the agreement.
Zero excess protection is often sold directly by rental companies, though some standalone policies may also offer low or zero excess options.
What Is SLI (Supplemental Liability Insurance)?
SLI stands for Supplemental Liability Insurance.
This type of cover is more commonly discussed in the USA and provides additional third-party liability protection.
Third-party liability insurance helps cover damage or injury caused to other people or their property while driving the rental vehicle.
Liability requirements vary between countries and states, particularly in America.
What Is Theft Protection?
Theft protection is designed to limit your financial responsibility if the rental car is stolen.
However:
- Conditions apply
- Excesses may still apply
- Theft protection may be invalidated if rental agreement terms are breached
Always check:
- What theft protection is included
- Whether an excess applies
- Any security requirements in the rental agreement
What Is Loss of Use?
Loss of use is a charge some rental companies apply when a damaged vehicle cannot be rented out while repairs are being completed.
This means the rental company may seek compensation for lost income during the repair period.
Some standalone excess insurance policies may include cover for loss of use charges.
For example, Leisure Guard’s policy includes up to £1,000 for loss of use charges related to eligible claims.
What Are Administration Charges?
Following an accident or damage claim, rental companies sometimes apply administration fees.
These can include:
- Processing fees
- Damage handling charges
- Claims administration costs
Some standalone excess insurance policies may reimburse certain administration charges.
Leisure Guard’s policy includes up to £200 for administration charges connected to eligible incidents.
What Is Misfuelling Cover?
Misfuelling cover is designed to help if the wrong type of fuel is accidentally put into the rental vehicle.
Depending on the policy wording, this may help cover:
- Draining incorrect fuel
- Towing charges
- Replacement fuel
Leisure Guard’s policy includes misfuelling cover up to specified limits.
What Is Key Cover or Lockout Cover?
Some policies include protection if:
- Keys are lost or stolen
- You are locked out of the rental vehicle
This may help with:
- Replacement keys
- Locksmith charges
- Lock replacement costs
However, exclusions and claim limits apply.
What Is an Annual Car Hire Excess Insurance Policy?
An annual policy provides cover for multiple rentals during a 12-month period.
This may suit:
- Frequent travellers
- Business travellers
- Multiple holidays per year
With Leisure Guard Hire Excess & Damage Insurance, annual policies can cover multiple rentals during the 12-month cover period with rentals of up to 31 days per trip.
What Is a Single Trip Policy?
A single trip policy covers one rental agreement for a specific period.
This may suit:
- One-off holidays
- Short breaks
- Occasional travellers
With Leisure Guard Hire Excess & Damage Insurance, single trip policies can cover one rental for up to 180 consecutive days.
What Is Usually Not Covered?
Like all insurance products, exclusions apply.
Common exclusions may include:
- Driving under the influence
- Reckless driving
- Off-road driving
- Racing or track use
- Mechanical failure
- Unauthorised drivers
- Breaching the rental agreement
- Wear and tear damage
Leisure Guard’s policy also excludes:
- Vans and campervans
- Cars 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.
Tips Before Hiring a Car
- Check what cover is included
- Understand the excess amount
- Read the rental agreement carefully
- Photograph existing damage
- Keep all receipts and paperwork, avoid paying by cash
- Confirm who is authorised to drive
- Notify the rental company immediately
- Take photographs
- Obtain police reports where required
- Keep your rental agreement, their damage report, payment confirmations and invoices
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
Car hire insurance terminology can feel complicated at first, especially when different rental companies use different phrases for similar types of protection.
Understanding terms like CDW, excess, LDW and standalone excess insurance can help you feel more confident before collecting your rental vehicle and reduce confusion at the rental desk.
As with any insurance product, always check the rental agreement and policy wording carefully to understand what protection is included and what exclusions may apply.
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.
