Quick Summary:
- Excess reimbursement repays your deductible after a claim, not all damage.
- LDW/CDW reduces liability at the desk, reimbursement works later.
- Check exclusions like tyres, glass, underbody, and administrative fees.
- Worth considering when excess is high or credit card cover is limited.
Excess reimbursement insurance is designed to protect you against one specific pain point of car hire: paying a large excess, also called a deductible, if the rental vehicle is damaged or stolen. In the United Estates, this can be particularly relevant because the amount you could be held responsible for can be substantial, and the way cover is presented at the counter varies by supplier, location, and vehicle class.
This article explains what excess reimbursement is, how it differs from LDW/CDW, what it typically repays, and the common gaps you should spot before you collect your keys. For general context on comparing suppliers and inclusions for car hire in the United States, it helps to know the vocabulary that appears on your voucher and on the rental agreement.
What “excess” means in US car hire
The “excess” is the portion of a claim that you pay before the included cover, usually LDW or CDW, applies. If your agreement says you have an excess of $1,000 and there is covered damage, you may be charged up to $1,000, with the remainder handled under the rental company’s damage waiver terms. Some rentals have a $0 excess, others have a deductible that changes with vehicle category, location, and whether you take extra cover at the desk.
It is also common for the rental company to take a security deposit or authorisation on your card. This is not the same as excess, but it is related because the deposit can reflect the potential excess plus other contingencies such as fuel, tolls, or traffic fines. The important point is that excess is the amount you could ultimately be out of pocket after an incident, even if you have LDW/CDW.
Excess reimbursement vs LDW/CDW, the key difference
LDW (Loss Damage Waiver) and CDW (Collision Damage Waiver) are usually the primary mechanism in US car hire that reduces your liability for damage or theft of the rental vehicle. These are often included in tourist-facing rates, but not always, and the exact terms matter. They typically work at the point of claim, meaning they can limit what the rental company charges you in the first place.
Excess reimbursement insurance is different. It is usually a separate policy, arranged through a third party, that pays you back after you have been charged for an excess or deductible under the rental company’s own terms. In other words, LDW/CDW aims to reduce what you owe to the rental company, while excess reimbursement aims to refund what you already paid, subject to policy conditions.
This timing difference is why reimbursement cover can feel less reassuring at the counter. You may still see a charge and then need to submit paperwork to the insurer. If you prefer fewer post-trip admin steps, you might prioritise a rate where the excess is already low or waived, rather than relying on reimbursement.
If you are comparing inclusions across providers for car rental in the United States, focus on whether LDW/CDW is included, what deductible applies, and whether you are considering an additional reimbursement policy on top.
What excess reimbursement insurance typically repays
Policies vary, but excess reimbursement commonly covers reimbursement of the deductible you were charged for damage or theft, up to a stated limit per claim or per rental. It may also repay certain related charges that the rental company adds, depending on the policy wording.
Typical reimbursable items may include:
Your charged excess/deductible, for damage or theft covered under the rental company’s waiver terms.
Damage-related fees, sometimes including loss-of-use charges (the rental company’s claim that the car could not be rented while being repaired), administrative fees, towing, or storage, but only if the policy explicitly lists them.
Single-vehicle incidents may be covered, but only if they are not excluded, and only if you complied with the rental agreement, such as reporting the incident promptly and obtaining a police report where required.
What matters most is that reimbursement policies do not turn an excluded event into a covered one. If the rental company declines LDW/CDW coverage because you breached the agreement, drove off-road, used the wrong fuel, or did not report damage properly, the reimbursement insurer can also refuse the claim. Reimbursement sits behind compliance.
Common gaps and exclusions to check before pick-up
Many travellers assume “insurance is insurance” and that all damage is handled the same way. In reality, the most common disappointments come from exclusions and from parts of the vehicle that are treated differently.
Tyres and wheels are frequently excluded or capped. Kerb damage, punctures, and alloy wheel scuffs can be expensive. If you will be doing city parking or long highway miles, tyre and wheel cover is worth checking.
Glass, mirrors, and windscreen chips are another frequent gap. Some rental agreements treat glass separately, and some reimbursement policies exclude it unless added as an optional extension.
Underbody and roof damage is often excluded, especially if it results from low clearance, poor road conditions, or hitting an overhead barrier. If you are hiring an SUV or larger vehicle, clearance-related incidents are surprisingly common.
Keys, key fobs, and lockouts may be excluded. Replacing modern key fobs can be costly, and locksmith call-outs add up.
Admin and “loss of use” charges can be included or excluded depending on the policy. Many drivers only discover these fees after the claim, so look for explicit wording, not assumptions.
Claim documentation requirements can be strict. Some policies require a police report for any incident, even minor damage, or they require you to submit photos, a damage report, and a final invoice. In some US locations, getting a police report for a small scrape is not straightforward, so check what is realistically achievable.
Who is allowed to drive is also critical. If an unlisted driver was behind the wheel, both the rental cover and the reimbursement policy can become invalid. This is particularly relevant for family trips where drivers swap.
When excess reimbursement can be worth buying
Excess reimbursement is most useful when the rental’s deductible is high and you do not want to carry that potential cost. It is also appealing when you want to avoid expensive add-ons at the counter but still reduce your financial exposure.
It can be worth considering if:
The excess is high for your vehicle class. Larger vehicles, especially people carriers, can come with higher deductibles. If you are planning a family trip and considering minivan rental in the United States, compare the deductible carefully because the cost of repairs and parts can translate into higher liability terms.
You are relying on a credit card policy with limitations. Many card policies have eligibility rules, country restrictions, vehicle exclusions, and strict claims processes. Reimbursement can be a back-up if your card cover is uncertain, but do not duplicate cover blindly.
You want flexibility across multiple rentals. Some reimbursement products are annual, which can make sense for frequent travellers taking several trips, multiple cities, or one-way itineraries.
You prefer to control costs before travel. A third-party policy can reduce the likelihood of being persuaded into higher-priced counter products, as long as you are comfortable with the reimbursement process.
It is less likely to be worth it if your rental already has a genuinely low or zero excess, or if the reimbursement policy excludes the risks you are most concerned about, such as tyres and glass.
How to compare desk cover, package rates, and reimbursement
At US rental desks, you may see different terms for additional cover, including supplemental products that reduce the deductible to zero, or that extend protection to parts excluded by standard waiver terms. These can be convenient because they reduce the chance you pay anything up front, but they can be expensive.
A useful comparison approach is:
Step 1: Confirm what is included in your base rate. Read your voucher carefully, particularly sections on LDW/CDW, deductible, and exclusions.
Step 2: Identify your worst-case out-of-pocket amount. Consider the deductible plus likely admin fees, and how much of a hold could be placed on your card.
Step 3: Decide whether you want “pay less now” or “pay nothing later”. Desk products can minimise post-incident admin. Reimbursement can be cheaper but requires you to claim back.
Step 4: Match the cover to your itinerary. City driving increases risk of minor scrapes and wheel damage, while long road trips raise the odds of windscreen chips or tyre issues.
Supplier terms can differ, so it helps to compare like-for-like across brands. If you are browsing options such as Dollar car hire in the United States or Alamo car rental in the United States, focus on the written inclusions rather than the headline price alone.
Practical checks before you pick up the car
Excess reimbursement only helps if you can document the incident and show what you were charged. These simple checks reduce disputes and make any later claim smoother.
Inspect the car thoroughly and take time-stamped photos. Photograph all sides, wheels, windscreen, interior, and fuel level. If you can, record a slow walkaround video. Make sure any existing damage is written on the check-out report.
Ask for the deductible figure in writing. If the agent quotes a different amount than you expect, clarify which cover is included and what is optional.
Understand the fuel and toll policy. Unexpected charges are common. While they are not “excess”, they can create confusion when reviewing final invoices.
Keep every document. Save your rental agreement, condition report, photos, and final receipt. If anything happens, report it promptly and follow the rental company’s instructions.
Confirm permitted driving areas. Some agreements restrict travel on certain roads, to certain states, or into neighbouring countries. Driving outside permitted areas can void both the waiver and reimbursement cover.
Situations where reimbursement may not help much
It is important to set expectations. Excess reimbursement is not a general travel insurance replacement, and it is not designed to cover injury or third-party liability. In the US, third-party liability is a separate, crucial topic.
Reimbursement may offer limited value if you are mainly worried about:
Liability claims. Excess reimbursement usually addresses damage to the rental vehicle, not damage you cause to others or medical costs.
Very small damages. If the deductible is already low, reimbursement does not change much.
Excluded parts. If your biggest risks are tyres, glass, or underbody, and the policy excludes them, you could still pay out of pocket.
Cashflow constraints. You might need to pay first and claim later. If a large excess charge would be difficult to carry temporarily, you may prefer a product that prevents the charge rather than reimbursing it.
FAQ
What is excess reimbursement insurance in US car hire? It is a policy that refunds the excess or deductible you were charged by the rental company after a damage or theft claim, subject to terms and exclusions.
Does excess reimbursement replace LDW/CDW? No. LDW/CDW is the rental company’s damage waiver that reduces what they charge you. Excess reimbursement usually pays you back after you have paid an excess under that waiver.
What do I need to make a successful reimbursement claim? Typically you need the rental agreement, incident report, photos if available, proof of the amount charged, and sometimes a police report. Requirements vary by policy.
Are tyres, wheels, and glass covered by excess reimbursement? Sometimes, but often they are excluded or limited. Check the policy wording for tyres, wheels, windscreen, mirrors, and underbody before relying on it.
When is it worth buying excess reimbursement for a US trip? It can be worth it when the deductible is high, you want to avoid pricey counter add-ons, and you are comfortable paying first and claiming back later.
