Substance over image since 1926

Rental Car Insurance:

A very good friend and trusted advisor was good enough to "proof" this site prior to renting a car in Florida.  His observation was "you tell me only what I am NOT covered for.  What coverage DO I have?"  Good point.  You DO have the same coverage for a temporary vehicle that you have for the cars on your policy, your legal liability to others, no fault, uninsured motorist, and comprehensive and collision coverage if you opted for those, subject to deductibles.  What you DO NOT have is coverage for everythint he rental contract MAKES your responsible for beyond your LEGAL liability.  So now.....

Whether or not to take the Rental Car Collision Damage Waiver or not is a question we get from almost every client we have who rents a car.  While it IS true that nearly all auto insurance written today in New York has coverage for temporary (less than 30 days) rental vehicles, the problem is that rental car companies have dreamed up new ways to punish you for damaging their vehicles beyond the actual damage to the vehicle, and those are NOT covered by your auto policy.

 "Diminished Value" and "Loss of Use" are just a couple of those. 

Some tips to help you:

1.  Take proof of your insurance with you even if you plan to buy coverage from them

2. Be sure to carefully examine the vehicle inside and out before you leave the lot

3. Take a camera to document existing damage or damage that occurs while you have the vehicle

4. Get a copy of the contract in advance of rental by going online to the website of the car rental company 

Here are the resons to take the collision damage coverage from rental car companies, even though it grieves us to suggest it. 

Diminished Value occurs if a vehicle can be repaired but, because of the extent of the damage, it may be worth less than it would be absent that damage (even though the vehicle is repaired).  Your rental contract probably makes you liable for that estimate of "diminished value".  Further, that contract may well make you liable for the FULL value of the vehicle, at THEIR discretion, if the damage is significant. You MUST read the contract you sign. 

Loss Settlement terms of your auto insurance in NY give the company the right to "inspect and appraise" damage before it is repaired.  But the Ali Baba Rental Company has no obligation to wait for anyone, which jeopardizes the contract between you and the company, and potential payment under the policy. In any case, rental company insurance usually lets you off the hook for any of those costs and delays and charges to your credit card block. 

Indirect Costs, such as "loss of rental income" that a damaged car pulled off the lot for repairs would cause, are benefits to the rental car company that are surely not insured by your policy.  YOU may have that coverage for YOUR replacement vehicle, but a rental company is not insured under your policy.

Payment of Damages, etc. is also dealt with in your contract.  The car rental company wants to be paid immediately and has already blocked off your credit card.  This can max out your card and leave you unable to charge any more without clearing the charge with a payment, bringing your vacation to a halt.

Administrative Expenses are another area that you can be billed for when returning a damaged vehicle.  Towing, storage while awaiting repair, appraisal fees, claim adjustment expense and other real or imagined expenses are your responsibility if charged.  Be sure to read your contract. 

Additional and/or Future Costs would include the deductible on your policy if you rely on that for your rental coverage. Further, the incident would be then a matter of record on your policy and perhaps impact your renewal premium. 

Other Insurance clauses in auto policies say that their coverage is excess over any other available coverage (such as the rental car company policy for damage to it's vehicles, travel policies, credit card coverage). Controvery over WHO is going to pay is avoided when you take the coverage when you rent. 

Maybe this will help from the NYS Insurance Department:

When you rent a car:

Car rental companies 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 damamged 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 State auto insurance policy and you rent a car for 30 days or less anywhere in the United States, it's territories and possessions, or Canada, you do not need to buy 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.  Furthermore, many credit card companies also provide some form of "collision damage coverage" to their cardholders for vehicles that they rent with that card.  This is seperate from any other coverage and usually covers losses onlt in excess of amounts collectible under other existing coverages.  It should be noted that credit card companies do not extend this coverage to all types if 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 are regulated under the New York State Insurance law and must be underwritten by 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.  


Insurance SERVICE since 1926!!

653 Main Street, East Aurora, NY 652-1420

We do not write insurance contracts.  Nothing we say or write here can be deemed to change any insurance contract.  Our responsibility is to give insurance advice and to suggest a match for a risk with an insurance contract from a company who will accept that risk for a premium.  We are not attorneys who can give legal interpretation to the contract between insured and their insurers.  Information here is general in nature, for the widest audience