Car Hire Excess Jargon Buster

With so many terms being used in the car rental industry,  it can be hard to understand what any of them mean. Here we break down all the common terms used, so you can be sure you are in the know next time you go to rent a car and avoid being charged for add-ons you don’t require.


ALI, LIS, LI, SLI: provides third-party cover for property damage and bodily injury.

ALI – Additional Liability Insurance
Car hire agreements in Europe typically include ALI, which stands for Additional Liability Insurance. It is the same as SLI or Supplemental Liability Insurance, terms by which it is also known. ALI provides third-party cover for property damage and bodily injury. This means claims made by other people are covered if the rental vehicle is involved in an accident. Outside of Europe, ALI may have to be purchased separately.

LIS – Liability Insurance Supplement
In countries including the US, LIS and Liability Insurance Supplement are terms used instead of ALI (Additional Liability Insurance) and SLI (Supplemental Liability Insurance). They all provide the same type of cover, which is third party liability. In countries where compulsory liability insurance is included with a car hire agreement, the prescribed limit can be very low. Although LIS can be stand-alone, it can also be purchased to top up low-level mandatory insurance. In areas where LIS is not available, UMP will likely be offered as an alternative product.

SLI – Supplemental Liability Insurance
SLI is the abbreviation of Supplemental Liability Insurance. This type of insurance policy covers third party claims for bodily harm and property damage in the event of an accident. In Europe, the majority of car rental agreements include SLI. Sometimes referred to as ALI or Additional Liability Insurance, it might have to be bought separately in other countries.

LI – Liability Insurance
LI, or Liability Insurance, may be used to describe Additional Liability Insurance (ALI), Liability Insurance Supplement (LIS) or Supplemental Liability Insurance (SLI). The terms are not commonly used so any reference to LI or Liability Insurance should be clarified with the car hire company.

UMP – Uninsured Motorist Protection
In certain places, including some states in the US, car hire agreements do not cover accidents involving the rental car and uninsured or underinsured drivers. Uninsured Motorist Protection, or UMP, is insurance that covers such claims. This type of cover is typically included in European car hire agreements. In areas where it is not, Liability Insurance Supplement, or LIS, may be offered as an alternative to UMP.


CDW, LDW, TP, STP, DEW= Cover the cost of repairs as a result of damage to the rented vehicle

CDW – Collision Damage Waiver
Collision Damage Waiver, or CDW, is not technically insurance, but it does cover costs for repairs if the rental vehicle is involved in a collision. It can also cover damage caused by vandalism and extreme weather such as hail. There may be an excess for damage to more vulnerable parts of a car like tyres, windscreen and undercarriage. SCDW is sometimes purchased instead of CDW as SCDW covers the excess as well. Often bundled with Loss Damage Waiver, or LDW, CDW is generally included with car hire agreements in Europe, Australasia and Africa but may need to be purchased separately elsewhere. CDW is sometimes referred to as LDW.

LDW – Loss Damage Waiver
Loss Damage Waiver, commonly abbreviated to LDW, is frequently sold together with Collision Damage Waiver, or CDW. LDW provides cover in case of theft or loss of use of the rental vehicle. In Europe, Australasia and Africa, LDW is likely to be included as part of the car hire agreement. It is worth noting that CDW is sometimes called LDW and vice-versa. In some countries, TP or STP are offered instead of LDW.

DEW – Damage Excess Waiver
Damage Excess Waiver, or DEW, is the same thing as Collision Damage Waiver, or CDW. Although DEW is not insurance, like CDW, it provides partial cover for excesses of the main car rental agreement. The excesses covered relate to claims for damage caused by collision, vandalism and other factors. In places like Europe and Australasia, DEW will likely be included in the hire agreement.

SCDW – Super Collision Damage Waiver
SCDW, or Super Collision Damage Waiver in full, is becoming increasingly common throughout Europe. SCDW is essentially the same as Collision Damage Waiver or CDW. As such, it covers repairs for damage to the hire-car. CDW may only cover part of the excess of the main rental agreement, whereas SCDW covers the whole excess so that the driver does not need to pay anything out in the event of an accident.


TP, STP, THW= Ensures against theft of the rented vehicle.

TP / THP – Theft Protection
Theft Protection, abbreviated to TP or THP, is an insurance product that covers theft of the rental vehicle or its parts. It can also cover damage arising from theft. Often purchased together with CDW, TP is sometimes offered instead of LDW. In Europe, Australasia and Africa, TP or LDW is likely to be included as part of the rental agreement.

STP / STHP – Super Theft Protection
While TP insures against theft of the rental vehicle, it only reduces the excess of the main rental agreement. STP, STHP, or Super Theft Protection, covers the full excess, thereby ensuring there is nothing to be paid in the event of a claim. STP or TP will usually be included when hiring a car in Europe, Africa or Australasia.

THW – Theft Waiver
THW and the full term, Theft Waiver, are occasionally used to describe TP or LDW. THW covers theft of the hire-car. CDW can sometimes be bought together with THW, TP or LDW. THW is normally included in European, Australian and African car hire agreements.


CWP, IDP= Covers the excess fee incurred upon making a claim (The same as excess insurance)

CWP – Cancellation Waiver Protection
Some car hire firms charge a fee if a rental booking is cancelled. By taking out Cancellation Waiver Protection, or CWP, the fee is not payable should a cancellation be necessary. Some travel insurance policies and credit cards include car hire cancellation cover, so these should be checked in advance.

IDP – International Driving Permit
The International Driving Permit, or IDP for short, is necessary for driving a car in over 140 countries. The IDP is usually a mandatory requirement when hiring a car abroad. An IDP needs to be obtained prior to travel and requires a full driving license or provisional with test pass certificate, a signed passport photo and proof of ID. Once issued, the IDP will be usable for one year. It needs to be carried along with the driving licence in order to be valid.


PEP, PEC= Protects against the loss, damage or theft of the personal belongings of the driver and other occupants of the rented vehicle.

PEP – Personal Effects Protection
PEP, or Personal Effects Protection, is commonly recommended as a separate insurance policy with car rentals in countries like the US. PEP is a form of insurance that protects against loss or damage to the baggage and personal effects of the driver and other occupants of the hire-car. PEP can be purchased as a stand-alone policy or as a supplement to PAI. PEP is also known as PEC or Personal Effects Coverage. It may already be provided with travel insurance or credit card policies, so these should be checked prior to acquiring separate PEP.

PEC – Personal Effects Coverage
Also called PEP, Personal Effects Coverage, or PEC, is insurance that can be bought by itself or together with PAI. It provides cover in the event of theft, other loss or damage to the personal belongings of the rental vehicle’s driver and occupants. PEC is sometimes part of travel insurance and credit card cover, so these policies should be checked in advance.