An agreement with an auto rental company in which the renter is released from
liability for physical damage to the vehicle in exchange for a fee, subject to
the terms of the rental agreement or a state statute if one exists. It is not
insurance but a contractual obligation subject to many restrictions. In some
contracts, the renter may be able to choose either a full damage waiver or one
that holds the renter responsible for damage only over a certain specified
amount, sort of an inverse deductible. The rental agreement typically
stipulates that purchasing the damage waiver is not mandatory.