LDW stands for “loss damage waiver”, and it is some kind of vehicle insurance that is applicable to rented cars. In a typical Loss Damage Waiver, the car rental company basically assumes the liability or so-called insurance damages when the renter is involved in an accident using the rented vehicle. Through this insurance-like waiver, the renter is asked for a fee to free him/herself from any liabilities involved in a vehicular accident that results to some damage. All these will of course depend on the specific terms and conditions of the waiver. Some LDW contracts provide full coverage for damages that resulted after an accident. There are also LDW contracts that specify the actual or maximum amount of coverage when a rented vehicle figures in an accident.

Most experts do not refer to LDW or Loss Damage Waiver as an insurance because the car rental company is in itself not an insurance provider. These same people simply refer to LDW contracts as a waiver between the two parties involve guaranteeing the assumption of liability by the rental company in case some damage to the rented vehicle results from an unfortunate accident. For most people, LDW works like some kind of insurance because it frees them from the liability of paying for car damages in an event of an accident. This is the reason why there are also many people who refer to LDW contracts as LDW insurance.

Under normal circumstances, car rental companies are usually required to implement LDWs or Loss Damage Waivers between them and their customers or car renters. This is especially beneficial to the renters because they wouldn’t have to pay for damages in case they cause damage to the vehicle during an accident. The coverage for LDW will be honored in cases wherein there is no violation of the supposed car rental contract. In some instances wherein there are violations to this contract, the renter may be held liable for vehicle damage even if he/she purchased a LDW insurance for his/her chosen vehicle.