Rental Vehicle Coverage
New York State Law used to prohibit a rental vehicle company from selling Collision Damage Waivers (CDWs) in New York on motor vehicle rentals of 30 days or less. A rental vehicle company was not, in most circumstances, able to hold renters liable for more than $100 in the event the rental vehicle was stolen or damaged. But changes in the law gave renters the option of purchasing a Collision Damage Waivers (CDW), also known as Optional Vehicle Protection (OVP), from the rental company, and also permits the rental vehicle company to hold the renter liable for the full amount of damage to the rented vehicle.
NOTE: The following information applies to New York residents only.
When You Rent A Car
Car rental agreements vary from one car rental company to another. However, all car rental companies must provide the minimum coverages required by law.
Car rental companies may sell a Collision Damage Waiver (CDW), also known as "Optional Vehicle Protection" (OVP). For rentals of 30 consecutive days or less, car rental companies in New York State can sell CDW, or, if not purchased, charge a renter for the total value of a stolen (lost) or damaged rental vehicle. The daily cost of the CDW may be as high as $12, depending on the value of the vehicle.
If you are currently insured under a New York auto insurance policy and you rent a car for 30 days or less anywhere in the United States, its territories and possessions, or Canada, you do not need to buy a CDW/OVP from the car rental company regardless of whether you have collision or comprehensive coverage on your own car. At present such coverage is currently provided without any extra charge.
Many credit card companies also provide some form of "collision damage coverage" to their cardholders for vehicles they rent with that card. This is separate from any other coverage and usually covers losses only in excess of amounts collectible under other existing coverages. It should be noted that credit card companies do not extend this coverage to all vehicles. You may wish to check with your credit card company to verify exactly what protection it provides and what types of vehicles are covered. Coverage under these agreements is regulated under the New York State Insurance Law and must be underwritten by a licensed New York State insurer.
In addition, some car rental companies offer higher liability limits than the required 25/50/10 at an additional cost. You may want to purchase this additional coverage if you do not own a car. If you already have a policy with higher liability limits, it will provide the coverage while renting a car.
Some rental car companies are also licensed to sell additional accident and health coverage (beyond required No-Fault benefits) and coverage for personal items stolen from the vehicle. These coverages are also regulated under the New York State Insurance Law and must be underwritten by a licensed New York State insurer.
The rental vehicle company must tell renters about both credit card insurance and motor vehicle insurance policies under which the renter may already have rental vehicle coverage.
Your Motor Vehicle Liability Policy
In New York, rental vehicle coverage is included in any motor vehicle liability insurance policy that:
- insures fewer than five vehicles; and
- is issued to an individual or a husband and wife.
Note: Policies insuring certain types of vehicles, including most types of trucks, are not required to include rental vehicle coverage.
Your insurer is required to provide you with information about rental vehicle coverage with your policy materials. This coverage is normally included automatically in your policy, but if an additional premium is charged separately you have the right to reject this coverage.
Rental vehicle coverage is required to be included only in motor vehicle liability policies that insure fewer than five motor vehicles.
Rental vehicle coverage is not subject to the limit of the property damage liability of your motor vehicle insurance policy. You would be covered for the full amount of damages to the rental vehicle if they are higher.
Rental Reimbursement is not the same as Rental Vehicle Coverage
The "Rental Vehicle Coverage" under your motor vehicle liability policy should not be confused with "Rental Reimbursement," which is also known as "Transportation Reimbursement" or "Extended Transportation" coverage, which many insurers offer as an optional coverage in combination with the purchase of physical damage coverages. This optional coverage is for the cost of renting a vehicle used as substitute transportation if your own vehicle is damaged and is temporarily out of use due to a covered loss, until it is repaired or is declared a total loss. This type of coverage is automatically provided in the case of a theft loss under comprehensive coverage.