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Car hire insurance in North America works differently to Europe.
For a start, it's possible to drive away from the rental office without any basic vehicle insurance, meaning you’d be liable for the entire cost of the vehicle in the event of an accident, or if the car was stolen. This should never happen in Europe.
Yet at the same time, you often won’t need to buy any additional insurance at all – particularly if you’ve booked via a car hire provider’s UK website.
We’ve untangled when you do need insurance in the USA and Canada, and the kind of insurance you need.
We’ve also analysed the USA/Canada policies of the major specialist insurance providers to tell you which car hire insurance policy is best.
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Not always. But it depends how you book your car rental.
The rental agreement will usually (but not always) include cover for damage or theft. This is known as a collision damage waiver (CDW) or sometimes a loss damage waiver (LDW).
And unlike in Europe, this CDW often comes without an excess. That means you don’t pay anything in the event of accidental damage or theft.
So if your USA/Canada car rental includes a zero-excess CDW, you don’t need to buy anything else.
You may still want to buy a standalone policy to plug any gaps in the cover offered by the rental company (tyres, windscreen, admin charges, etc), but the car rental policy alone means you won’t be liable for any big bills if the car is damaged or stolen.
You often have the option to hire a car with insurance included or excluded.
Car hire without any vehicle insurance is available because US/Canadian residents can often hire a car under their own car insurance, or with insurance provided by their bank or credit card.
But, as someone visiting the country, you must ensure you have CDW to avoid being liable for the entire value of the car.
You can buy this at the car rental office, but it’s expensive and may be subject to an excess. And even if there’s no excess, you may be charged an administration fee in the event of damage to your vehicle. Admin fees can vary from around $20-$300 USD.
That’s why it’s better to buy it from a specialist insurer before you go; it’s a fraction of the cost and the best policies will be more comprehensive. Third-party insurance includes cover for window, tyre, roof and undercarriage damage, as well as towing and cover for lost or stolen keys.
UK residents must ensure that their US or Canadian car rental includes CDW (or LDW). This can be bought at the rental desk, but it’s cheaper to buy it in advance from a specialist insurer as part of an excess reimbursement policy (ERI).
All of the Best Buys in our table include CDW cover.
best buy | 81% | £72 | £47 (a) | £10,000 | £75,000 | £70,000 | Yes | £2,000 | £1,000 | £1,000 | £500 | £300 | £300 |
| 78% | £102 | £102 | £10,000 | £75,000 | £100,000 | Yes | £1,000 | £750 | £750 | £500 | £500 | £300 | |
| 76% | £120 | £49 | £10,000 | £100,000 | £100,000 | Yes | £1,000 | £2,000 | £1,000 | £500 | £500 (optional) | £300 | |
best buy | 74% | £35 | £49 | £10,000 | £50,000 | £65,000 | Yes | £1,000 | £500 | £1,000 | £500 | £300 | £300 |
best buy | 73% | £120 | £60 | £7,500 | £100,000 | £100,000 | Partially | £1,000 | £750 | £1,000 | £500 | Yes | £300 |
best buy | 72% | NA(b) | £90 | £10,000 | $50,000 | £65,000 | Yes | £500 | £1000 (optional) | £1,000 | £300 | £300 | £300 |
| 72% | £58 | £90 | £10,000 | NA (c) | £60,000 | Partially | £1,000 | Optional extra | £1,000 | £500 | £300 | £300 | |
| 69% | £12 | £66 | £22,500 | $100,000 | £50,000 | Partially | £1,500 | £500 | Full value | No | £300 | £300 | |
| 68% | £52 | £93 | £50,000 | NA | £50,000 | Partially | £500 | £1,500 | £500 | £300 | £300 | £300 | |
| 66% | £59 | NA | £10,000 | £50,000 | £50,000 | Yes | £500 | £500 | £500 | £300 | £300 | £300 | |
| 65% | £63 | £81 | £7,000 | $50,000 | £65,000 | Partially | £500 | £500 | £1,000 | £300 | £300 | £300 | |
| 65% | £59 | £41 | £6,500 | No | £120,000 | Partially | £500 | £500 | Full value | £300 | No | £300 | |
| 62% | NA | £125 | £50,000 | $100,000 | £70,000 | Partially | £500 | £500 | Full value | £500 | No | No | |
| 53% | NA | £53 | £10,000 | £50,000 | £65,000 | Yes | £500 | £500 | £500 | No | No | £300 | |
| 52% | £101 | £96 | Varies | $35,000 | Not stated | Yes | No | £500 | Varies | No | No | Yes | |
| 46% | £30 | NA | £10,000 | No | £65,000 | Yes | £500 | Full value | £500 | £250 | No | No | |
| 39% | £45 | £42 | £50,000 | No | £50,000 | Partially | No | £500 | £500 | No | No | No |
Using the table: In March 2025 we calculated the policy scores by rating the 19 most important elements of the policy, including Collision Damage Waiver, tyres, windscreen and underbody cover, towing charges, maximum value of car, personal accident cover and more, to create an overall score. Scores are based on the provider’s standard worldwide policy including USA and Canada. Two-week prices are based on a 50-year-old male driver hiring in the USA/Canada. Prices are correct as of March 2025. Quote does not include in-country cover or any voluntary excesses which can be applied. Prices based on a policy with 31-day trip max. (a) Annual trip has optional excess reimbursement between £6,000/£8,000/£10,000. Single-trip cover offers only £6,000 and a maximum of £35,000 collision damage waiver (b) Only annual trip cover is available (c) CHEW Insurance does not include a Collision Damage Waiver in its worldwide policy.
There isn’t one.
In theory, collision damage waiver (CDW) provides cover if the hire car is damaged by accident, and loss damage waiver (LDW) is cover for the theft of the vehicle.
But in reality, these two things are usually packaged together, and the terms are used interchangeably to mean cover for loss or damage to your rental car.
In both the USA and Canada, all hire cars must include a minimum level of third-party liability insurance to cover injury to another person or damage to someone else’s property in the event of an accident.
This minimum cover can vary a lot from state to state. For example, California’s minimum level of third-party cover is $15,000, which may not be sufficient in the event of a serious accident. SLI is a top-up policy that usually increases your level of cover to $1m.
While most specialist car hire providers sell CDW, only a few will also offer SLI. However, you can search for a policy that includes excess cover, CDW and SLI using Money Maxim.
