2025 International Car Rental Insurance Guide: CDW, SLI, Excess Rules for U.S. Travelers

2025 International Car Rental Insurance Guide: CDW, SLI, Excess, and What U.S. Drivers Must Carry Abroad

Meta Description: 2025 guide to international car rental insurance for U.S. travelers. CDW, LDW, SLI, Excess rules, country requirements, and credit card coverage explained.

TL;DR Summary

• CDW/LDW covers the rental vehicle; SLI covers liability to others; Excess determines your out-of-pocket cost.
• Europe, Japan, Australia, and Thailand all have different mandatory insurance rules U.S. drivers must follow.
• Premium travel credit cards often provide CDW but rarely offer SLI or zero-excess protection.
• U.S. drivers abroad must confirm: liability minimums, excess waiver options, and credit-card CDW eligibility.
• Average overseas rental insurance can range from $10–$45/day depending on country and coverage level.

Understanding the Core Insurance Terms

Collision Damage Waiver (CDW)

CDW is not technically insurance but a waiver that reduces your financial responsibility if the rental vehicle is damaged.

Loss Damage Waiver (LDW)

LDW often includes CDW + theft protection and is the most common protection from U.S. credit cards.

Supplemental Liability Insurance (SLI)

SLI provides third-party liability coverage. Essential because credit cards almost never cover liability.

Excess (Deductible)

The excess is the amount you must pay even if CDW is applied. This can range from $500–$3,500 depending on country.

Country-by-Country Requirements (2025)

European Union

• Mandatory: TPL included in base rental.
• Recommended: CDW + zero-excess upgrade.
• Excess can reach $1,000–$2,500.

Japan

• Liability + CDW bundled.
• NOC waiver recommended.
• Excess $300–$800 typical.

Australia

• Basic liability included by law.
• Excess reduction strongly recommended (excess often >$3,000).
• Windshield/roof/tire damage often excluded.

Thailand

• Basic liability included but low coverage limits.
• SCDW or zero-excess strongly recommended.
• SLI extremely important for U.S. drivers.

Credit Card Coverage vs Rental Desk Coverage

Credit Card CDW

• Premium cards offer strong CDW but exclude liability.
• Excludes luxury cars, exotic vehicles, and long rentals.

Rental Desk Insurance

• SLI usually purchased locally.
• Zero-excess easiest through rental agency.

Third-Party Options

• Allianz / RentalCover useful for excess reduction.

What U.S. Drivers Must Carry Abroad (2025)

• CDW/LDW (card or rental counter)
• SLI
• Zero-Excess
• Proof of booking + insurance

Price Comparison Table (2025)

Country	CDW/LDW	SLI	Zero-Excess	Total/Day
EU	$10–$20	Included	$10–$25	$25–$45
Japan	$8–$15	Included	$4–$10	$15–$30
Australia	Included	Included	$18–$30	$20–$45
Thailand	$6–$12	$5–$15	$10–$20	$20–$35

Final Recommendation

Best setup for U.S. travelers: premium credit card CDW + local SLI + zero-excess upgrade.

Sources

• NHTSA – International Driving Guidelines