Automobile Owners Resource Center

Collision Damage Waivers (or Optional Vehicle Protection) and Rental Vehicle Coverage FAQs

New York State Law formerly prohibited 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. However, changes in the law give renters the option of purchasing a CDW, also known as Optional Vehicle Protection (OVP) from the rental vehicle company, and also permits the rental vehicle company to hold the renter liable for the full amount of damage to the rented vehicle.

However, insurance is available to cover against the full amount of damage to vehicles rented by the insured for a period of 30 days or less. In addition to the general information provided here, consumers are encouraged to read their policies and/or check with their company representative, agent or broker regarding any specific questions.

NOTE: The following questions and answers apply to New York residents only.

I don't have physical damage (collision or comprehensive) coverage on my motor vehicle liability policy. Am I still covered for damages to rental vehicles?

Yes. In New York, rental vehicle coverage is included in motor vehicle liability insurance policies that:

  • insure fewer than five vehicles; and
  • are issued to an individual or a husband and wife. However, policies insuring certain types of vehicles, such as 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 a premium is separately charged you have the right to reject this coverage.

I have one motor vehicle policy that insures my five automobiles. Do I have rental vehicle coverage on my policy?

No, rental vehicle coverage is required to be included only in motor vehicle liability policies that insure fewer than five motor vehicles.

I have only $10,000 in property damage liability coverage. What if the rental vehicle is damaged in excess of that amount?

Your rental vehicle coverage is not subject to the limit of property damage liability of your motor vehicle insurance policy. You would be covered for the full amount of damages to the rental vehicle.

What if I don't have a motor vehicle insurance policy?

If you do not have a New York State motor vehicle liability policy (or if your policy is not required to provide the coverage), rental vehicle coverage may be included as a benefit with your credit card on a group insurance basis, if you use the credit card to rent the vehicle. Check the summary of benefits for the credit card to see if the coverage is available and any applicable limitations.

In addition, a rental vehicle company may now offer "optional vehicle protection" (also called "collision damage waiver") to its renters, at maximum daily rates of up to $9 to $12 (depending on the type of vehicle). The rental vehicle company must also advise renters about credit card insurance and motor vehicle insurance policies under which the renter may have rental vehicle coverage.

I have "Rental Reimbursement" coverage on my policy. Does this cover me for damage to the rental vehicle as well?

No. 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.