CDW, excess and super cover: what does rental car insurance actually cover?

Rental insurance comes with a soup of letters: CDW, LDW, TP, SCDW, PAI. At the desk you have a minute to decide, often in a language that is not your own. The one number you need to understand is the excess: the amount you still pay if the car is damaged or stolen. Everything else is about making that number smaller, or getting it back.

This guide explains each layer, what is often excluded, and which questions to ask before you sign.

Layer 1: third-party liability, always included

Third-party liability covers damage and injury you cause to other people and their property. In the EU it is compulsory. ECC-Net states that all rental cars must carry third-party liability insurance valid across the EU, and that this insurance should be included in the rental price.

The minimum cover differs per country. The Austrian ECC advised in June 2026 to look for liability cover of at least 1 million euros, and noted that very cheap offers may come with low cover. Higher limits often cost only a few euros more per day.

Layer 2: damage and theft waivers, with an excess

Damage to the rental car itself is not covered by third-party liability. For that, companies use waivers. ECC France lists the common abbreviations:

A basic CDW does not mean you pay nothing. It means you pay up to the excess. ECC France warns that excess charges can be high, even for a scratch. With theft protection, your responsibility is usually limited to the theft excess.

What is the excess?

The excess, also called deductible or franchise, is the maximum you pay for damage under the waiver. If the excess is 1,200 euros and the repair costs 400 euros, you pay 400. If the repair costs 3,000 euros, you pay 1,200. Many companies block an amount equal to the excess on your credit card as a deposit, which ECC France describes as usual practice.

Use the excess calculator to see what different excess levels mean for your trip.

Layer 3: lowering the excess at the desk or online

There are two main ways to protect yourself against the excess.

Super cover from the rental company. You pay extra per day and the excess drops, often to zero. The advantage: if damage happens, the company usually does not charge you, and the deposit on your card is smaller. ECC Malta notes that buying the company's own insurance usually means a much smaller hold on your card.

Standalone excess insurance. You buy a policy from an insurer or broker before you travel. If damage happens, the rental company charges you the excess, and you claim it back from your insurer. Which? found in 2024 that the average cost for a week in Malaga was 177 pounds for a desk waiver, 38 pounds for an excess policy from a broker and 23 pounds directly from an insurer. The catch: you still pay first, and the company still blocks the full deposit. Read how to claim the excess back.

What is often excluded

Waivers are not all the same. Which? scored waivers and excess policies on 17 elements, including tyres, windscreen and underbody, and found that some desk waivers left out underbody damage, misfuelling or keys. The Austrian ECC recommends comprehensive cover without excess that includes glass, tyres and rims.

Common exclusions to look for in the terms:

• tyres, wheels and rims;
• windscreen and other glass;
• underbody and roof;
• keys, lost or damaged;
• wrong fuel;
• damage while driving on unpaved roads or in a country you did not declare;
• damage caused by a driver who is not on the contract.

Our article on windscreen, tyre and underbody damage explains why these parts cause so many disputes. The terms check helps you find these clauses in your own contract.

Questions to ask before you sign

1. What is the excess for damage, and what for theft?
2. Which parts are excluded from the waiver?
3. How much will you block on my card, and when is it released?
4. Is the additional driver covered?
5. Can I have this in writing, or on the contract copy?

The EU's consumer centres advise getting a clear description of what any waiver or extra insurance covers before you sign. ECC France adds that if you are in doubt, fully comprehensive cover is the safer choice.

When a claim comes anyway

Even with full cover, a company may charge for items it says are excluded, or add fees. Check the claim against your contract. Read what a damage claim should contain, and if you disagree, follow our guide on how to dispute a damage claim.