Legal Definitions - loss damage waiver (LDW)

A Loss Damage Waiver (LDW) is a contract between a consumer and a merchant when renting a car or heavy equipment. The merchant agrees not to hold the consumer liable for any loss that results from damage to the rented item. LDW is also known as Collision Damage Waiver (CDW) or Physical Damage Waiver (PDW).

For example, when renting a car, a consumer may enter into an LDW contract with the rental company. If the car is damaged during the rental period, the rental company will not hold the consumer responsible for the cost of repairs, as long as the damage is covered by the LDW. However, the LDW may not cover damage caused intentionally by the consumer or damage resulting from the consumer's willful or wanton misconduct.

Similarly, when renting heavy equipment, a customer may enter into a Heavy Equipment Loss Damage Waiver contract with the merchant. The Heavy Equipment Loss Damage Waiver is not insurance, but it protects the customer from being held liable for any loss resulting from damage to the rented equipment.