Category: Embedded insurance · Reviewed by Simon Temme, Account Executive · Last reviewed 2026-06-10
Embedded car rental insurance is insurance and waiver cover offered at the rental car counter or online booking checkout — including collision damage waiver, supplementary liability insurance, theft protection and excess waiver — and was a particular focus of the FCA’s General Insurance Add-Ons Market Study (TR15/1, 2015).
Category: Embedded insurance Aliases: CDW, collision damage waiver, rental car insurance at counter, SLI, supplementary excess insurance Established: Long-standing global rental practice; UK regulatory attention from FCA TR15/1 (2015) onwards Related: Embedded insurance at point of sale, ICOBS 6A, Consumer Duty
Car rental embedded products fall into three categories:
Insurance contracts sold at the UK rental counter are within the FCA perimeter. The rental provider (or its agent) must hold permission or operate as an appointed representative. Waivers as contractual liability limitations have historically sat outside the FCA perimeter — a position that has produced consumer-protection concerns and was specifically considered in FCA work on add-ons.
In 2014 the FCA published its General Insurance Add-Ons Market Study Interim Report; the final findings appeared in 2015 as TR15/1 and PS15/22. The study found particular detriment in motor add-ons including those sold at the rental counter, and consumer confusion between waivers and insurance. ICOBS 6A (in force 1 April 2016) prohibited opt-out selling and imposed disclosure rules.
In response to high counter prices for excess waiver, the UK market developed a stand-alone excess product, marketed pre-trip by independent brokers. The British Insurance Brokers’ Association (BIBA) has commented on its growth, and the FCA referenced the stand-alone alternative in TR15/1. The Consumer Duty price and value outcome now requires the counter product to be assessed against the stand-alone alternative as part of fair value testing.
PS22/9 (July 2022) and PROD 4 apply: the insurance and (where the manufacturer treats them within scope) waiver products require target-market and fair-value testing.
A traveller arrives at the rental counter having reserved a vehicle online. The counter agent offers a “complete protection” or “premium package” combining CDW deductible reduction, SLI extension, glass and tyre waiver and personal accident insurance, typically at £15–£35 per day. The customer is given a product summary; ICOBS 6A requires the opt-in step for insurance components.
The stand-alone excess insurance alternative — typically £3–£6 per day, purchased before travel — is offered by independent UK insurance distributors. Many UK travellers purchase the stand-alone product, accept the rental provider’s deductible exposure on the contract, and rely on the stand-alone insurer to meet any deductible charge.
Variations include credit-card-bundled rental cover (where premium card products include rental waiver as a benefit), corporate fleet-rental cover, and integrated peer-to-peer car-sharing cover (Hiyacar, Karshare). The interaction between waivers and stand-alone excess insurance remains a consumer-understanding flashpoint and is addressed in the FCA Consumer Duty.
A traveller books a hire car in Spain via an online travel agent. The OTA offers Spanish-domestic excess insurance for €4/day; the customer accepts. On arrival, the counter agent offers complete protection at €28/day. The customer declines, presents a credit-card pre-authorisation for the rental provider’s full deductible, and relies on the OTA excess insurance to refund any deduction. Pre-trip documentation lists the customer’s contractual liability and the stand-alone product’s IPID.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-10. Next review: 2026-12-10.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
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