loss damage waiver (LDW)

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Loss damage waivers (LDW), collision damage waivers (CDW), and physical damage waivers (PDW) are all synonymous (Car Rental Practices Guidelines section of The Law of Advertising). Generally, a loss damage waiver is a contract that a consumer may enter with a merchant when renting a car; the merchant agrees not to hold the consumer liable for loss that results from damage to the car (Tex. Bus. & Com. Code Ann. § 92.001(5)). However, the loss damage waiver may exclude: “loss or damage to the merchandise that is caused by an unexplained disappearance or abandonment of the merchandise,” “damage that is intentionally caused by the consumer,” or “damage that results from the consumer’s willful or wanton misconduct” (Texas Jurisprudence, Third Edition).

Similarly, a loss damage waiver may also be used for heavy equipment rentals. When renting heavy equipment, the customer may enter a contract with the merchant for a heavy equipment loss damage waiver (Tex. Bus. & Com. Code § 93.002). A heavy equipment loss damage waiver is not insurance (Tex. Bus. & Com. Code § 93.007).

[Last updated in July of 2020 by the Wex Definitions Team]