Why A Loss Damage Waiver Is Important When Hiring a Car for Business Trips

When factoring the cost of car hire into a business travel budget, you’ll not only need to think about the vehicle cost itself, but also about add-on products like loss damage waivers. These optional extras remove some financial liability in the event of car loss or damage, but are they worth the extra fees? 

Though it may increase a business traveller’s daily expenditure, when the unexpected happens – whether it’s car theft or a sudden hailstorm – a loss damage waiver provides peace of mind for a worry-free road trip. Paying a little more for a car hire loss damage waiver also takes away some of your business’s financial and administrative burden. 

In this article, we’ll explain more about what a loss damage waiver is and what’s included at this level of coverage, to help you manage your company’s travel budget more effectively.

What is a loss damage waiver (LDW)?

A loss damage waiver is an optional product that waives the driver’s financial responsibility for damage, loss or theft of a hired car. Rather than paying the full cost of the damages, you’ll pay a deductible, which is a fixed value less than the total car cost.

An LDW can be purchased as an opt-in feature for anyone hiring a car, providing coverage throughout the car hire period. That means business travellers are protected 24/7, whether physically in the vehicle or not. 

Is LDW the same as full coverage?

No. A car hire loss damage waiver isn’t the same as full coverage insurance, and shouldn’t be used as a stand-in. It won’t include liability coverage for damage caused to other vehicles in the event of an accident, and it comes with certain exclusions. For example, damage to windows, tyres, and interiors are often excluded. 

While full coverage describes traditional car insurance, LDW for hired cars offers a specific added layer of protection.

What does a car hire loss damage waiver cover?

While it’s always important to read the fine print when hiring a car for business trips, generally a loss damage waiver covers any loss or damage to a vehicle that’s outside of the driver’s control. Theft, vandalism, and acts of nature that directly impact the vehicle will typically be covered under an LDW.

What is not covered with an LDW?

A loss damage waiver won’t cover all types of vehicular damage. If the vehicle’s damaged due to a violation of the car hire agreement, this expense won’t be covered under an LDW. It also won’t cover the cost of damage to another vehicle or injuries.   

Examples of violations could include things like:

• Car is towed due to parking in an illegal zone
• Damage resulting from speeding
• Car is stolen due to keys left in the ignition

If you’re planning on hiring a car during an upcoming business trip, make sure you carefully review the insurance policy before driving so that you know which situations might nullify your LDW coverage. 

What is a Super Loss Damage Waiver (SLDW)?

If you’re worried about paying for repairs not covered by a standard LDW, you might opt for an enhanced add-on policy that provides a higher level of coverage. 

A Super Collision Damage Waiver (SCDW) and Super Loss Damage Waiver (SLDW) free the driver from any liability for loss, damage, and theft, reducing the excess down to zero and paying for repairs to car interiors, windshields, and other areas that are excluded from the base policy.

LDW vs CDW: What’s the difference?

Short for collision damage waiver, a CDW is another type of add-in product that can help protect your company from paying costly expenses should something go wrong with a hired car during travel. 

Depending on the car hire company you choose, the terms LDW and CDW are often used interchangeably. But when they’re sold separately, there are some subtle differences to be aware of to help you compare LDW vs CDW. 

• CDW: Provides coverage for damage to the car when there’s an accident
• LDW: Provides coverage in the event of theft and vandalism, as well as damage caused by acts beyond the driver’s control

In addition, a collision damage waiver policy usually only covers the cost of fixing damaged bodywork, excluding the cost of repairs to the interior, windscreens, tyres, and side mirrors. If those are damaged during a collision, the driver may be liable for the full cost of repairs even with CDW. 

What’s important to note is that each car hire provider has its own, slightly different, definition of these terms so it’s always important to verify what’s covered before purchasing any add-ons to your business car hire agreement. 

LDW and CDW are often combined and sold together, blending the collision coverage of CDW with the added theft and vandalism protection of an LDW. For example, Avis makes no distinction between CDW and LDW, selling them as a single product, while Hertz sells CDW and Theft Protection as separate, optional extras.

How much does an LDW cost?

The cost of a loss damage waiver will depend on the location you’re hiring a car from as well as the type of vehicle you choose for your business trip. You’ll see the cost listed when you make a reservation request, usually listed as an added daily fee between £10 to £30 per day, on top of the standard car hire charges. 

Within Europe, car hire packages often include an LDW, CDW, and third-party liability insurance as standard. But for the most up-to-date inclusions you’ll need to verify this with your car hire company of choice. 

Is LDW worth it for car hire on business trips?

Applied as a daily add-on fee, the cost of a loss damage waiver can potentially add up, particularly on longer business trips. So, is LDW worth it? In most cases, yes. 

This is because a loss damage waiver saves both time and money if anything happens. Even if you’re a safe, cautious driver, accidents can still happen, and you’re not in control of what happens to the car when it’s out of sight. 

Though specific laws will vary by country, usually without an LDW the driver carries full responsibility for any loss or damage. When something happens, even if it’s not the business traveller’s fault, your company will have to pay costs that could include:

• Full value of car 
• Towing
• Storage
• Impound expenses 
• Loss of use fees

Standard business travel insurance won’t always cover these costs, either. That means rather than paying a small daily fee for LDW plus the agreed-upon excess, your company could be paying a much higher bill up to the full value of the damaged hired car. You’ll also need to engage in a lengthy administrative back-and-forth with legal teams and insurance providers. For these reasons, it’s highly recommended to take out a basic CDW or LDW if it’s not already included in the standard car hire contract. 

How to compare insurance policies when hiring a car for business travel

There’s no universal standard for loss damage waivers, which will vary in terms of day rates, deductibles, and exclusions. This makes it important to compare all options carefully as part of your car hire contract.

But in addition to looking at waivers like LDWs, you’ll also need standard car hire insurance.

When purchasing an insurance policy, you’ll have two options: 

• Purchasing coverage from the car hire company: One of the easiest ways to make sure business travellers are insured on the road is with coverage provided as part of the car hire package. In addition to CDWs and LDWs, car hire companies also offer liability cover to pay for the cost of damage to other vehicles and injury. However, usage and age restrictions apply, and costs can vary widely.
• Purchasing coverage from a third-party provider: Most car hire companies allow businesses to purchase their own insurance. For example, with Enterprise, business accounts can add their own insurance details provided it’s agreed to in the contract terms. The benefit of comparing options from third-party insurance providers is that you’ll have a wider selection, allowing you to shop around to find the best rates. 

It's worth checking to see if you already have coverage through an existing company credit card or travel insurance account. Many corporate travel insurance policies include supplements for hired vehicles and liability insurance, covering the cost of accidents, theft, and injury.     

What are other types of car hire insurance?

We’ve already covered the various types of add-on products you can choose to pay for damage sustained to a car. For full, comprehensive protection during a business trip, you may also want to consider the following add-ons:

• Personal accident insurance (PAI): Covers expenses in the event of an accident that creates the need for medical assistance, like ambulance transportation
• Personal effects coverage (PEC): Covers loss or damage to any personal belongings inside of the hired car 
• Supplemental liability insurance (SLI): Helps pay the costs of any third-party injury or damages from a collision
• Roadside assistance: Pays for callouts when business travellers experience breakdowns or flat tyres on the road

Finding the right hired car for your company trip with Booking.com for Business

There’s a lot to consider when hiring a car for business travel. And when it comes to add-on costs like a loss damage waiver, the type of car you choose will directly impact your company’s expenditure. It therefore pays to have access to the widest selection of corporate car hire options. At Booking.com for Business, you’ll be able to browse available vehicles from over 200 leading car hire brands in a single platform, available in 140+ destinations worldwide. 

In addition to viewing available rates, makes and models, you’ll also see insurance coverage options so that you can make a more informed decision that matches the needs and budget of each type of business trip. 

Consider a loss damage waiver for stress-free business travel

The finer details of business car hire contracts can be confusing, with their varying levels of coverage and costs. But with average damage costs of over £8000 without coverage, it’s worth adding LDW to your business travel checklist. Paying a small daily fee upfront takes away the responsibility, and accompanying stress, of paying the full cost of vehicular damage and theft. Just be sure to shop around using car hire solutions like Booking.com for Business to find the best deals on policies, both in terms of cost and coverage.