Making sense of car hire insurance jargon

Car hire insurance is important and can save you from having your holiday ruined by expensive repair or recovery costs. You can usually acquire sufficient cover from your car hire provider and there may be some level of insurance that is already included as part of the insurance policy.


Companies often use complicated jargon and abbreviations that make it even harder to decide which car hire insurance policy is best for you. In this article we hope to clear up some of the confusion surrounding these terms and make it easier for you to make your decisions when it comes to picking car hire insurance.

Loss Damage Waiver

This is a term that you might come across when you are researching or looking into car hire insurance. It can often be abbreviated to LDW and is usually only applicable in the USA.

LDW is good because it allows you to gain a complete refund on any excesses you have paid as a result of physical damage to your car. This may include damage you car sustained because of vandalism, fire or theft.

Excess Reimbursement Insurance (ERI)

Another form of reimbursement which is almost the same as LDW, ERI applies to rentals in the UK and Europe. The same rules apply with this sort of insurance excess. If any damage is caused to the car whilst you have hired it then your insurance company will pay back the money that the car rental charged you.

Supplementary liability insurance (SLI)

This type of car hire excess insurance is particularly useful if you are involved in an accident with somebody else and their car becomes damaged. It will make sure that you are covered if you cause damage to someone else or their property.

Collision Damage Waiver (CDW)

This can sometimes be confused with, or referred to as LDW. CDW is often included as a standard when you buy insurance cover but it is important to check this before you decide which policy to go with.

This type of cover does not provide the same level of cover that you get with LDW. CDW covers you in the event that some damage is caused to the car but may not always cover your car if it is subject to theft or fire.

Damage to particular aspects of the car, for example the tyres, may not be covered under this policy.