What is CDW and SLI insurance?



The US has been one of the world’s most popular holiday destinations for many years, and Brits continue to flock to America in their droves, whether they’re heading for family fun in Orlando, a shopping break in New York or a beach getaway in California.

Many tourists and travellers visiting the US will hire a car to get around with freedom and flexibility – but the car insurance rules for the United States are very different to those in Europe, and Brits could be leaving themselves exposed to enormous bills by not taking out the proper policies.

The difference between hire cars in Europe and the US

In Europe, all cars that are hired through rental firms come with third-party liability insurance included in the price. This is standard legislation, and it ensures that those hiring a car are protected if their rental vehicle is damaged through no fault of their own.

In the US, however, there is no legal obligation for firms to provide insurance to someone renting a vehicle. That’s where CDW and SLI come in. CDW (Collision Damage Waiver) and SLI (Supplemental Liability Insurance) must be purchased separately on all car rentals in the US – or the unfortunate holidaymakers renting the vehicle could end up being held responsible for the full cost of the vehicle, or even a compensation claim in the event of an injury or death.

Collision Damage Waivers

CDW is basic insurance which ensures that the policyholder is protected if they’re involved in any kind of collision while driving the rental vehicle. It can also offer extra protection against theft, loss or further damage, depending on the particular state and the insurance provider.

In some cases, CDW excess insurance is actually included in the initial car rental agreement – but it’s always worth reading the fine print. Some contracts state that the person hiring the car might still be liable for certain excess costs if they were to make a claim. Some CDW policies also don’t cover certain parts of the vehicle, such as the roof, the undercarriage or the windows (often the most vulnerable areas of cars).

Supplemental Liability Insurance

This type of insurance is basically liability insurance for third parties. It protects the driver of the vehicle and the policyholder against damage to property or injuries to a person. Should the driver of the rental car injure someone with the vehicle, their SLI will ensure they’re protected against damages and compensation.

As the name might suggest, SLI is a great supplement to the insurance policy that is provided with your car rental insurance – it essentially ‘tops up’ your liability, which is ideal if you’re going to be travelling between states.

CDW, SLI and excess insurance

If you’re heading to the States and thinking about renting a car, the most sensible approach to insurance may be to search for a standalone car hire excess insurance policy which covers CDW and SLI too. Typically, this can offer far better value, and gives you total peace of mind, knowing that you are protected against any damage to the car or injuries to third parties.

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