Car hire excess versus collision damage waiver: what’s the difference?

Hiring a car can come with a lot of unexpected jargon. You book a car, then you’re asked about collision damage waiver (CDW), excess, super CDW and something called an excess waiver. It’s easy to feel unsure about what and what isn’t worth paying for.

When looking at car hire excess versus collision damage waivers, the most important thing to know is car hire excess and collision damage waiver are not the same thing.

This guide explains how each one works, what they cover, and what to check before agreeing to any extras at the rental desk.

Collision damage waiver (CDW) is often included in your rental agreement with the car hire company.

It’s not actually an insurance policy, it’s a waiver. That means the rental company agrees to limit what they’ll charge you if the car gets damaged, as long as you stick to the terms of your contract.

In the UK and many parts of Europe, CDW is bundled into the price you’re quoted. But coverage and wording vary. You might also see:

• LDW (loss damage waiver): sometimes includes theft cover

• Super CDW: an extra you can pay for to reduce or remove the excess

• Excess waiver: a term used in different ways by different providers

 Always check what your rental agreement actually says, rather than relying on the label.

Car hire excess insurance is something you buy separately from a dedicated insurer rather than the rental company.

 In car hire, the excess is the amount the hire company might charge you if there’s damage, even if CDW is in place. Excess insurance helps you claim that money back. Here’s how it tends to work:

1.  The hire company charges you up to the excess amount

2. You submit a claim to your excess insurer with supporting documents

3. If your claim is accepted, the policy may reimburse what you paid

 It won’t stop the charge from being taken, but it could help you recover the cost. Each policy is different, so always read the small print.

Here’s a quick side-by-side comparison:

• Who provides it

○ CDW: The rental company as part of the rental contract

○ Excess insurance: An insurer as a separate policy

• What it is

○ CDW: Caps what the rental company can charge you

○ Excess insurance: Pays you back if you’re charged that excess

• When it applies

○ CDW: When damage occurs, it limits what you owe

○ Excess insurance: After you’ve paid the excess, it helps you recover the cost

• Do you still pay upfront?

○ CDW: Often, yes, and you might still pay the excess

○ Excess insurance: Yes, then claim it back

• Common limitations

○ CDW: Things like tyres, windscreens, undercarriage

○ Excess insurance: Contract breaches or non-covered incidents

Coverage and exclusions vary by provider, so treat this as a general guide.

 CDW usually covers damage to the car’s bodywork, but commonly comes with exclusions. You’ll often see exclusions for things like: 

• Tyres and wheels

• Glass / windscreen

• Undercarriage

• Roof

• Interior damage

 CDW can also be affected by how the incident happened and whether you followed the hire company’s terms.

 Excess insurance is there to reimburse you for the excess you’ve been charged. Some policies go further and include extra cover, but you should check the policy wording carefully.

 Possibly. CDW might be included in your rental, but it won’t necessarily cover everything. Here are a few things to consider:

• How much is the excess? Could you afford to pay it?

• What does the CDW exclude?

• Where are you hiring? Terms and charges vary a lot

• Do you already have cover through a bank, credit card or travel policy?

 It’s worth checking all this before you travel, so you don’t end up paying twice or missing a gap in cover.

Before agreeing to extras like super CDW or an excess waiver, make sure you know: 

• The excess amount in the rental agreement

• What types of damage are excluded

• Whether theft is covered and on what terms

• What the add-on actually changes

• Whether it overlaps with cover you already have

• Whether a deposit/pre-authorisation will still be taken on your card

 If you feel rushed, ask to see the terms in writing. It’s reasonable to take a moment to read what you’re agreeing to.

CDW and car hire excess insurance do different jobs. CDW is usually part of your rental agreement and might limit what the hire company can charge, but it often leaves an excess. Excess insurance is separate, and could help you claim that money back later.

A few minutes of checking your rental agreement and any existing cover can help you avoid surprises later. And if you are looking for an insurance quote, simply get in touch with us at Everywhen.

The car hire excess insurance policy is provided and administered by our partner insurance4carhire. Everywhen act as an introducer for Insurance4carhire. 

 You can find out more about the insurance4carhire car excess insurance policy, or get a quote for car hire excess insurance on the insurance4carhire website. 

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought. 

 insurance4carhire is a trading name of Atlanta Insurance Intermediaries Limited. Authorised and Regulated by the Financial Conduct Authority under firm reference number 309599.